CC vs. Debit vs. Check Card

[littleroc02us]

Pretty much. It gets processed through a different network and the fee for that is different. It doesn't matter to the user - only to the card issuer. That's why we keep saying that a debit card and a check card are essentially the same thing.

Funny stuff. Why even have the debit option then?

[disneysteve]

Is the only difference then besides entering the PIN number some kind of profit that someone is making when you have to sign the bill?

Pretty much. It gets processed through a different network and the fee for that is different. It doesn't matter to the user - only to the card issuer. That's why we keep saying that a debit card and a check card are essentially the same thing.

[littleroc02us]

I realize this totally up for debate, but if I were someone that relied on a CC to survive (travel or not), given my living circumstances, I'd have to re-evaluate why I have to depend on them in the first place.

Imagine this scenario speaking from experience about 10 years ago. If you think about it a credit card allows a consumer to basically use it as a payday loan type system where you borrow the money and only pay the minimum on it for a while and maybe sometimes you pay more, but it gives the user the ability to overextend themselves for a longer period of time, kind of like giving themselves more money to use sooner and then pay back at a slower pace. I did this when I was young and dumb. I could push the payments of the cc bill further out which allowed me to use more of my disposable income. Now I know how dumb that was.

[littleroc02us]

Hey guys maybe this will help. When I pull out my bank card out of my wallet it has a Visa log on it, it says debit card at the upper left and check card on the right. When I go to the store to buy something, they say credit or debit. I choose credit and I don't enter a PIN number and I sign and it is deducted directly from my checking account. If I choose debit then I have to enter a PIN number and it is deducted also from my checking account. Is the only difference then besides entering the PIN number some kind of profit that someone is making when you have to sign the bill?

[littleroc02us]

AMEN!

I agree with that also...

[minnie1928]

You don't have to enter a PIN when using a debit card. It's your choice as a consumer, but most people don't realize that. In fact, if you choose to enter a PIN, then you should understand that the banks get paid less by the retailer than if you were to sign. That's why your bank wants you to use your check/debit card and always sign. There's a winner and loser in every transaction, which is why interchange fees are such BIG business!

As a former banker of 20 years, this is totally correct! Interchange income is HUGE for the banks!! That's why they push cards over checks. Checks cost more to process and the income stream from selling checks is pathetic. However, the income stream on cards is HUGE and growing every day as more people walk away from checks and go towards plastic.

[JoshuaHeckathorn]

It always annoys me when people equate using a credit card with going into debt or over-spending.

AMEN!

[disneysteve]

With a check card, I like the fact that if you have the money you buy it, if you don't have the money you don't buy it. The old fashioned way.

We are perfectly capable of using a credit card in the exact same way. If we don't have the money, we don't buy something. It doesn't matter if we are paying cash, check, debit or credit. Living within your means and using credit cards are not mutually exclusive. It always annoys me when people equate using a credit card with going into debt or over-spending.

[JoshuaHeckathorn]

That's not true, because with a debit card you have to put in a pin number and with a check card you swipe it and choose credit but it deducts it from your account. I use one every day.

You don't have to enter a PIN when using a debit card. It's your choice as a consumer, but most people don't realize that. In fact, if you choose to enter a PIN, then you should understand that the banks get paid less by the retailer than if you were to sign. That's why your bank wants you to use your check/debit card and always sign. There's a winner and loser in every transaction, which is why interchange fees are such BIG business!

[Joan.of.the.Arch]

You always hear about the first two (CC's and Debit Cards) but no one ever talks about Check Cards. Why is that? I use a Check card for everything except Groceries and Gas because that is the way my wife likes it. Don't argue with the wife if you know what I mean. Personally I don't understand why people would use a debit card because you have to use a pin each time, but that is fine if you do. I use my Check Card because it only allows me to spend what is in my account. There isn't a chance of an overdraft because my Credit Union links my savings to it and doesn't charge me anything if it's over the limit, they just transfer the money. Also, they have set a limit of $500 so that if it was stolen that is all the crook could get. You can set that lower or higher but have to call the bank first. We just bought furniture for $1900 and we called before we went and they raised it temporarily. As for Fraud issues, because it is a Visa card it is protected by Zero Liability protection which means if someone were to steal it and use it I would need to call the bank within 24 hours and they would credit my account within 5 days. I've had great success with this system, but does anyone know why the media doesn't talk about Check Cards?

I thought a debit card was the same thing as a check card. I have two cards called debit cards from two different banks. On both I have the choice to use it without entering a pin number. In those cases, I don't think I even have had to sign, but that may be because the store has a policy not to ask for a signature on a credit purchase for small amounts. I think at Walgreens drugstore, for example, they do not ask for a signature on anything under $20.01.

Littleroc, when you hand your card to a clerk, and they ask, "debit or credit," how do you answer? Do you not have a choice? With my debit card, I do have a choice. I can forgo having to use the PIN if I choose. Both my debit cards are Visa cards, too. They are run through the Visa system.

But mostly, I use credit card for the rewards. I use the debit cards just enough times per month to qualify for the better interest rates on the cash in the accounts. Using the debit card at all is just a little hoop I jump through.

[littleroc02us]

Other than having to enter a pin, is there any functional difference for the user? Either way, the money is taken straight out of your account. I'm not really understanding what is different in the way that they work.

Bottom line is I'd rather not have every purchase taken out of my account right away. I don't want to have to constantly track how much is in my account, what payments are pending, what deposits haven't cleared yet, etc. I don't want to have to record a zillion separate transactions. It is incredibly easier to use my CC for everything, make one payment once a month and get a nice annual summary of all of my spending broken down by category. Plus, I earn hundreds in rewards for spending that I'd be doing anyway.

Yes your right, the only difference is that you have to use a PIN number with a debit card. IMO I find it better for my wife and I to balance our check book and to have the money deducted from my checking account and deposited. It allows me to keep a zero allocated budget that is accurate, instead of living on credit and then paying it off each month. I suppose the rewards can be fun to get as extra spending cash, but that isn't our plan. I'm kind of like a geeky accountant who tries very hard to be proactive with our budget and to make it better every year. I know it sounds crazy, but I like the incoming and outgoing aspect of finances and the balancing of my budget with the checkbook. To me it feels more real to know that I cannot rely on credit for everything or to get rewards. Although again as I stated before my wife is the one who wants to use Discover for Gas and Groceries. Even though it bothers me we do it to keep the peace. I'm not thinking I'm beating Discover by getting their rewards or becoming rich because of it, we use just see it as some extra cash.

As you probably already know, I'm not big on credit for anything except mortgages and that comes from my past where I abused it and almost became bankrupt. It really scares the heck out of you to be in that position if you've ever been there. That is why I prefer cash transactions.

[Kris Jarczyk]

With a check card, I like the fact that if you have the money you buy it, if you don't have the money you don't buy it. The old fashioned way. Definitely becoming a smart trend to live within your means. Sounds like check cards do offer protection in case they are fraudulently used but would still like to here more pros and cons on the liabilities.

[cypher1]

Gotta love google and wikipedia

Debit card - Wikipedia, the free encyclopedia

"A debit card (also known as a bank card or check card) is a plastic card that provides an alternative payment method to cash when making purchases. Functionally, it can be called an electronic check, as the funds are withdrawn directly from either the bank account, or from the remaining balance on the card. In some cases, the cards are designed exclusively for use on the Internet, and so there is no physical card."

[cypher1]

Now imagine if you were someone who relied on them to survive or travel. For me it was great not to have one for a while, because you feel like you didn't owe anyone even for a little bit.

I realize this totally up for debate, but if I were someone that relied on a CC to survive (travel or not), given my living circumstances, I'd have to re-evaluate why I have to depend on them in the first place.

I understand where your coming from, but it could still happen to your personal account I won't have the problem with depleting my cash because they can't touch my savings and there is a limit on my checking that I would get back in 5 days anyway. We don't keep much in our personal checking unless we plan on buying something large. Plus I can transfer money in about 2 seconds from a web connection, so the most they would get is a couple hundred.

Agree with same outcome on savings, and being able to transfer funds quickly. But I don't care if I have $1 or $100000 at risk in my savings, I prefer to limit risking or exposing access to that account, whenever I can.

I prefer the purchase protection that credit cards provide, the piece of mind that comes with knowing it's not directly linked to my bank account, and of course- all the rewards!

That statement nicely sums up my view. Although I get rewards, thats not the main reason I use CC.

I don't think CCs are evil or a need, but with the right discpline they can be utilized to one's advantage. In the past I used to always use my Check Card by default, hardly ever the CC. After the identity theft, I switched everything around, realizing how convenient it was to make one monthly payment in full, while still managing my charges daily, like my checking account. Is that for everyone? No, just my way of peace of mind, which still has flaws. Clearly this is a preference of usage between checking/debit vs CC. Whichever systems works best for the user is the right way.

[disneysteve]

Check cards and debit cards are the same thing

That's not true, because with a debit card you have to put in a pin number and with a check card you swipe it and choose credit but it deducts it from your account.

Other than having to enter a pin, is there any functional difference for the user? Either way, the money is taken straight out of your account. I'm not really understanding what is different in the way that they work.

Bottom line is I'd rather not have every purchase taken out of my account right away. I don't want to have to constantly track how much is in my account, what payments are pending, what deposits haven't cleared yet, etc. I don't want to have to record a zillion separate transactions. It is incredibly easier to use my CC for everything, make one payment once a month and get a nice annual summary of all of my spending broken down by category. Plus, I earn hundreds in rewards for spending that I'd be doing anyway.