Woman using debit card

The Dos and Don’ts of Using Debit Cards and Credit Cards


“Debit or credit?”

Hans Abendschoen
Hans Abendschoen, Retail Sales Manager

Is one option better than the other? Even when using your debit card, you have the choice of a debit or credit transaction, which can be confusing.
To give you some insight, we reached out to our Retail Sales Manager, Hans Abendschoen.

“The biggest difference between debit cards and credit cards is how you access funds,” Abendschoen said. “With a debit card, you’re accessing your bank account directly. However, a credit card functions through a credit company, which means you’re borrowing their funds.”

When choosing whether to access your funds directly or borrow from a credit card company, it’s crucial to consider these financial factors:

DO: Choose Credit When Using Your Debit Card

You insert your debit card in the terminal at the store’s register to checkout, and the screen asks you to choose: Credit or Debit. Regardless of your choice, you’ll directly access your own personal funds. The difference is in the next step.

When you select debit, you’re then asked to verify your Personal Identification Number (PIN). Simply entering those four numbers could put your personal information and bank accounts at risk of fraudulent activity. Even if you trust the business where you’re making your purchases, there could be something fishy occurring behind the scenes. Fraud can occur at even the most seemingly secure retailers including use of skimming devices are used, and internal security breaches.

On the other hand, selecting the credit option sends your transaction through your bank’s merchant service provider instead of accessing your account directly. The transaction goes to the provider and then to your bank, adding an extra layer of protection between your bank account and the store’s terminal. Because of this step, it may take longer for these transactions to appear in your online banking dashboard.

DON’T: Use Your Debit Card for Online Purchases

Online purchases present an even more significant threat to your personal information. Hackers and phishing scams are more rampant than ever.

Features such as one-click purchases, same-day delivery, and two-day shipping provide shopping convenience, but according to Abendschoen, these opportunities are most secure when using a credit card.

“If there happens to be a fraudulent activity with an online transaction, using a credit card keeps the money in your bank account and your personal information safe,” he said. “By using a credit card company’s funds, you have protection from fraud, and you keep your cash until you make payment to your credit card company.”

DO: Contact the Bank if There is a Problem

Reviewing the transactions on your account regularly is a good way to make sure that everything is as it should be. However, if you see questionable transactions, contact the bank immediately. The bank can provide you some protection from your loss under the rules of Regulation E. Regulation E was enacted by the Federal Reserve as a means of protecting consumers engaged in electronic funds transfers, including those associated with debit card usage. You must be proactive and notify the bank as soon as you realize there are transactions on your account that you did not make. Even with that protection, those reimbursements don’t happen overnight. If a fraudulent activity results in access to a large portion of your account funds, you may be at a significant deficit for up to 10 business days.

Contact Traditions Bank Today

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