You can enjoy the convenience of using a debit card or credit card when you checkout at a merchant, but there are some important differences between using debit vs. credit at checkout.
Using Debit at Checkout:
- Merchant requests funds from your checking account
- Credit Union verifies the funds are there
- The payment gets transferred to the merchant
- The merchant pays for processing – less than 1% of the transaction
Using Credit at Checkout:
- Merchant requests funds from the card issuer
- Card issuer verifies the availability of credit
- Payment is transferred to the merchant within a few days
- You pay back (in part or in full) the credit card issuer when your minimum payment is due
- The issuer charges the merchant for processing – about 2% of the transaction amount
Why Choose Debit?
- Only spend money you have
- Get cashback more easily
- No interest to pay
- Can get cash with your purchase or at an ATM (and not pay a cash advance fee)
Why Choose Credit?
- It may be possible to earn cashback or reward points
- No hold on some purchases – like hotel rooms or gas
- Some insurance for travel or rentals
- Avoid overdraft fees
Contact us if you have questions or need more information about the difference between debit and credit.
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