I have the answer to one of life’s modern mysteries. When you give a salesclerk your ATM card and they ask you “debit or credit” – how should you answer? And does it matter? Here’s the low down from money expert Beth Kobliner, author of “Get A Financial Life”. She says, yes, it does matter and you should say “credit”. Here’s why:
It’s not actually credit that you’re using, because you’re not borrowing money. Whatever you’re buying will still come out of your checking account – but if you say “credit” the cash is traveling across a so-called credit card network. That means you’re covered by the credit card network’s “zero liability” policy. That comes in handy if you have to dispute a charge – like if the store charged you twice by mistake, or used your card illegally.
If you say “debit” and you’re overcharged or there’s a mistake, even if you report the problem within 48 hours, you’re liable for up to $50 bucks in bad charges. If you wait longer than 48 hours, your liability climbs to $500 dollars or more!
Another reason to say “credit” when the clerk asks you “debit or credit” About one in seven banks will charge you 75 cents when you use the debit network. 75 cents may not seem like a lot, but it adds up fast. Say “credit” and they’ll charge the store, instead of you, for the service cost.