Each time I pull out my debit card to make a purchase, I’m hit with a minor – but not inconsequential – question. A cashier or the point of sale machine at the counter where I’ve swiped or inserted my card asks that all-too-familiar inquiry: Debit or credit?

Typically, my default choice is debit, but not for any good or informed reason. I’m paying with a debit card, so the obvious choice is debit, right? But then, why am I given an option in the first place? Does it really matter which button I hit or what option I choose? To help answer these questions, I talked to BBVA Compass Director of Merchant Acquiring Adam Spencer.

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With more than 20 years of experience in consumer and business banking, Adam is a whiz when it comes to all things related to merchants, payments and acquiring. This situation proved no different, as it took Adam no time to help me understand the implications of choosing debit or credit when paying with my debit card.

According to Adam, it ultimately comes down to just one thing – how your transaction is processed. Debit cards have their own networks for processing, some of which include Interlink, STAR or NYCE. When making a purchase using your debit card and pin number – known as an online transaction – these networks provide authorization of funds and debit your checking account close to real-time.

When you choose to use your debit card as a credit card – an offline transaction – the transaction is processed through the Visa or MasterCard credit card systems. These networks process debit transactions one to two days after it is made, meaning the funds are not automatically debited from the account.

Spencer: For consumers generally, when you’re making a purchase using your debit card, and you’re asked credit or debit, there’s little difference which you choose.

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Adam said, “For consumers generally, when you’re making a purchase using your debit card, and you’re asked credit or debit, there’s little difference which you choose. Choosing to use your debit card as debit may be helpful for budgeting, given the near real-time debiting of funds.”

With that, and with my questions answered, I now go confidently to the checkout line with my purchases knowing my answer to the all important question:

Debit or credit?

For more on the advantages of debit cards, and credit cards, be sure to check out this story on BBVA Compass’ MoneyFit blog.

Contact: Communications