Wow, I’ve totally misunderstood/misinterpreted a lot of random threads over the years!
As for your last paragraph, I’m not sure I understand… how is a credit card directly linked to your account without interest? How is that “credit” if it takes the money right away? Or am I misunderstanding even more?
The “dedicated” credit cards you mentioned are what I’m used to when I think of credit; give card, sign name, pay a bill later. In case it’s not clear, to me debit is Interac; swipe card, punch in code, money diappears from my account and ends up in the merchant’s account. No additional involvement from me.
I’m just not seeing what’s different about the credit part of your debit/credit cards.
I also suck at money/banking stuff, so be aware that it probably is just me being an idiot, and not any lack of communication skills on your part
I think that what people are calling debit/credit cards are debit cards with a Mastercard or Visa logo. They can be used with a PIN at ATM’s and some stores or can be processed with a signature through the credit card system at pretty much any place that accepts Mastercard/Visa. But it’s only the processing that’s like a credit card- the money is still deducted from your account (not instantly, but within a day or so)
Nope, they are still around. Typically these days a bank will give you a check card to go with your bank account. You can you this as a debit card (entering a PIN) or as a credit card (providing a signature, although sometimes this optional if the amount is small).
Some people, like my wife and I, are paranoid about having a check card out there that can be used without a PIN number, so we demand an ATM card instead, which can only be used with a PIN. Typically we use this at ATMs to get cash, but most of our purchases are done with a third party credit card account. I know, I know, your money is “guaranteed” to be returned to you, etc, but there is something more comforting about “hey credit card company, someone stole some of your money” over “hey bank, someone stole some of my money, can I have it back”.
This is mostly correct. If your bank’s system is completely online a debit card transaction can post immediately. Typically all that posts immediately with a credit transaction is the authorization, which will probably affect your available, but not ledger, balance. Only when the completion is sent later in a batch will the transaction actually properly post against your account. Add in the fact that merchants and networks can do stand-in authorization if they are unable to contact your bank and are willing to take the risk, and you may not notice the transaction against your account for some time.
Yes this was the way at the last business I worked for. If a customer used a credit card we were charged a 2-3% fee. Using the card as a debit was the same as accepting a check, no fee was charged to the business. That’s why we asked if we could run it as a debit.
My debit card can be ran either way. It doesn’t matter to me because I am not charged a fee for purchases, but it can matter to the business where I use the card.
If I withdraw money from my own banks ATM I am not charged a fee, but I can get money out of any ATM. If I use a ATM not owned by my bank usually both the ATM system owner and the business where the ATM is located charge me a fee.
Some banks or credit unions are starting to reimburse ATM fees for non-system withdrawls.
Also, debit card transactions show up in the merchant’s bank account almost instantaneously, whereas credit card transactions can take 2-3 business days to settle. Cash flow is cash flow.
Then there are the consumer protections. It’s almost impossible to chargeback a debit transaction, except for fraud (meaning theft of card and PIN fraud). You can quite easily dispute a credit card transaction. You have a boatload of consumer protections for credit transactions, almost none at all for debit. I’d say this is most important difference of all from a consumer’s perspective.
(Eta: These consumer protections still exist when using your bank debit card’s “credit” feature, if it has one, lack of consumer protection applies only to PIN-based transactions)
I can’t find a cite, but I recall reading that the credit card number itself indicates whether it’s a debit/credit, or credit only. Presumably the machines could be smart enough to know whether what you have is a credit-only card.
I’m like Driver8 & Mrs. Driver8 for much the same reasons. All I had to do to get/keep one is to insist that I didn’t want the check card (“No, I don’t want that.” “I want debit only.” “I realize the advantages, but I want debit only.”), and they did it. It isn’t the automatic choice, but it’s available
Yeah, I have an “ATM card” from HSBC which is debit only. It doesn’t have a VISA or Mastercard logo on the front, but it does have the Cirrus and Maestro logos on the back.
Not without contacting the bank. The bank generally sets aside blocks of numbers (sharing the first 6 digits) as a debit range, or a credit range. But the store’s POS hardware has no way of knowing that.
And in case it wasn’t made clear above, choosing credit vs debit when using a debit card has no impact on where the money comes from. It’s coming straight from your checking account. The distinction only effects whether or not a PIN is required, or a signature; and makes slight differences in how the transaction gets routed.
That’s certainly not a universal in the US market.
Some banks let you set it on a per-card basis, but even then only certain of their ATMs are smart enough to follow the preference you set.
Chase Bank lets me choose English or Spanish (as well as default menu settings), and the fancy ATMs at their branches respect the setting but the little Chase ATMs in gas stations ignore the settings.
But the POS software can tell. Not all POS applications do this, but certainly some can (e.g. the one that my company has written). It is perfectly possible to program the POS so that it recognizes which cards are eligible for debit as well as credit. It requires the retailer to maintain tables based on the Bank Identification Number (BIN), i.e. the first 6 digits as mentioned by jsc1953.
I am referring to POS applications where the PIN pad is integrated with the POS, such as you will find in any major supermarket. Clearly, if credit is handled through a separate, stand-beside, credit terminal, then the POS software cannot influence events.
What I want to know is why Visa gave me two cards for the same account: one that’s credit only, and one that’s debit and credit. Why does the latter do both? Why not just make it debit-only? If I want credit, I’ll use the other card…
Add an Interac logo and you have the Canadian debit card, which evolved from banks’ ATM/client cards.
Mine is actually labeled “Client Card”; it lets me make withdrawls at any Interac or Plus System ATM, pay for things at any Interac or NYCE* point-of-sale terminal, or identify myself at a bank branch. Canadian debit cards have no Mastercard or Visa logos, which is why it took me some time to understand references to “debit or credit” in US members’ postings.
The Interac debit system is immediate and “online” as well; funds are withdrawn immediately as you make the transaction. I can log into my bank’s web interface from my iPhone immediately after buying something and see the withdrawl from my account. If the merchant’s terminal is offline, there will be no Interac debit transactions.
There is some consideration to letting banks issue Visa and MasterCard debit cards in Canada these days. I can see how they would advertise them: “All the convenience of debit, without needing to be at the store!”. They would advertise the possibility of using them for online shopping, something which Interac has only started to roll out.
However, it seems to me that it would bring in the possibility of overdrawing a bank account by making multiple debit transactions before the first one posts, something which is very difficult with the Interac system. Is this actually possible with US debit cards?
[sub]*The NYCE point-of-sale terminal system apparently has an agreement wioth Interac to allow “cross-border” debit transactions. I have not actually used this.[/sub]
I am not sure what the “it” you mention refers to, but most US banks will allow you to go overdrawn when a debit transaction exceeds your balance - and then charge a hefty feefor the privilege. There is pending legislationto prohibit this. The legislation also seeks to prohibit another devious practice - when a consumer issues multiple checks/debits on the same day that take him overdrawn, the bank clears the biggest first. This maximizes the number of times the customer may have submitted a check/debit with insufficient funds. The bank then charges a fee for each.
“It” is “Visa/MC-branded debit transactions that don’t post immediately”. I can see how that would be a problem. The linked article suggests that they are trying to graft a more “online”-like character onto the system, but if they’re using the full Visa/MC system, they’ll never be able to guarantee that transactions will clear immediately. Perhaps they need to issue “electronic-only” Visa/MC debit cards, similar to the prepaid MasterCard I have, which can’t be used in those “zik-zak” machines because it is not embossed.
Are there Amex debit cards? Debit cards using other credit-card-network brands?
