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Tuesday, February 27, 2024

Can I Use My Debit Card as a Credit Card? 3 Things to Know (Feb. 2024)

Can I Use My Debit Card As A Credit Card
Shannon McNay

Written by: Shannon McNay

Shannon McNay
Shannon McNay

Edited by: Lillian Guevara-Castro

Lillian Guevara-Castro
Lillian Guevara-Castro

Lillian Guevara-Castro brings more than 30 years of editing and journalism experience to the CardRates team. She has written and edited for major news organizations, including The Atlanta Journal-Constitution and the New York Times, and she previously served as an adjunct journalism instructor at the University of Florida. Today, Lillian edits all CardRates content for clarity, accuracy, and reader engagement.

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For the longest time, when I was making a purchase and the “credit” or “debit” option appeared on the terminal screen, I quietly wondered, “Can I use my debit card as a credit card?” I would never ask the sales clerk though. I assumed it was common knowledge I had somehow missed out on learning. But that wasn’t exactly the case.

Leave it to banks to overcomplicate the issue. Giving consumers a debit card and then providing the option to choose “credit” or “debit” without explaining why is definitely unnecessarily confusing.

There are distinct differences between these two types of transactions — and they are important to know. Below are a few things you should understand about these transactions so you can make the right choice. We’ll dive into exactly what the word “credit” means as it relates to debit cards and how using the debit option could lead to more fees.

1. “Credit” Doesn’t Mean Pay Later

First of all, let’s discuss the misleading nature of the word “credit” in relation to your debit card. Selecting this option at the time of purchase does not suddenly turn your debit card into a line of credit you can borrow from.

So, although you can choose “credit” when purchasing something with your debit card, you cannot use your debit card the same way you would a credit card.

When you select credit, rather than the transaction going through in real time as it does with a debit card, the transaction happens offline. Once the merchant batches their receipts and reconciles them with the credit card company, then your charge goes through. This can take roughly two to three days.

So the charge may not necessarily be removed from your account that day, but it will be removed in a few days. Whereas with a credit card, you get a bill each month and you decide how much to pay. When you swipe a debit card and choose “credit,” the full amount of the purchase will eventually be pulled from your bank account.

2. “Debit” is Like Using an ATM and May Include Fees

Since the money is leaving your account either way (rather than when you pay a credit card bill), it may seem easier to just use the “debit” option. However, there could be a fee to do this. The fee isn’t a lot (less than a quarter per transaction), but if you swipe your card on a day-to-day basis, those fees can start adding up.

When you swipe your card and choose debit, you’ll be asked to enter your PIN. Most banks do not charge a fee for inputting your PIN, but it’s important to check with your financial institution beforehand. This is just like withdrawing money from an ATM. Make sure you have the funds available for your purchase amount at the time of purchase, or else you could end up overdrawing your bank account.

If you want a no-fee way to make purchases — along with payment flexibility and added security — a credit card with no annual fee or a 0% introductory APR may be the way to go.

Top 3 No Annual Fee Cards

The following three cards have no annual fee and are excellent options for those with good credit (generally a credit score above 700).

1. Chase Freedom Flex℠

This card is currently not available.

Chase® Rating

★★★★★
N/A

OVERALL RATING

N/A
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
N/A
N/A
N/A

Additional Disclosure: The information related to Chase Freedom Flex℠ credit card has been collected by CardRates.com and has not been reviewed or provided by the issuer of this card.

Discover it® Cash Back Review

at Discover Card'ssecure website

CASH BACK RATING

★★★★★
4.9

OVERALL RATING

  • INTRO OFFER: Unlimited Cashback Match for all new cardmembers – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
  • Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases—automatically.
  • Redeem your rewards for cash at any time.
  • Discover could help you reduce exposure of your personal information online by helping you remove it from select people-search sites that could sell your data. It’s free, activate with the mobile app.
  • Get a 0% intro APR for 15 months on purchases. Then 17.24% to 28.24% Standard Variable Purchase APR applies, based on credit worthiness.
  • No annual fee.
  • Terms and conditions apply.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR for 15 months
0% Intro APR for 15 months
17.24% - 28.24% Variable APR
$0
Excellent/Good

EXPERT'S RATING

★★★★★
4.9

OVERALL RATING

  • $0 annual fee and no foreign transaction fees
  • Earn a bonus of 20,000 miles once you spend $500 on purchases within 3 months from account opening, equal to $200 in travel
  • Earn unlimited 1.25X miles on every purchase, every day
  • Miles won't expire for the life of the account and there's no limit to how many you can earn
  • Earn 5X miles on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options
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Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 15 months
0% for 15 months
19.99% - 29.99% (Variable)
$0
Excellent, Good

Another nice feature of these cards is the associated rewards programs. You can earn cash back, air miles, or points toward merchandise and travel you wouldn’t otherwise receive by using a debit card. A few financial institutions offer debit card rewards, but they’ve been harder to come across since the 2008 financial crisis.

Top 3 Introductory 0% APR Cards

The following cards charge no interest on purchases for the duration of the introductory period, providing cardholders a very forgiving repayment plan — just be sure to pay your balance before the intro period ends.

Bank of America® Customized Cash Rewards credit card Review

at Bank Of America'ssecure website

0% INTRO APR RATING

★★★★★
4.8

OVERALL RATING

  • $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.
  • Earn 3% cash back in the category of your choice, automatic 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases) and unlimited 1% on all other purchases.
  • Choose 3% cash back on gas and EV charging station, online shopping/cable/internet/phone plan/streaming, dining, travel, drug store/pharmacy or home improvement/furnishing purchases.
  • If you're a Bank of America Preferred Rewards® member, you can earn 25%-75% more cash back on every purchase. That means you could earn 3.75%-5.25% cash back on purchases in your choice category.
  • No annual fee and cash rewards don’t expire as long as your account remains open.
  • 0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 18.24% - 28.24% will apply. A 3% Intro balance transfer fee will apply for the first 60 days your account is open. After the Intro balance transfer fee offer ends, the fee for future balance transfers is 4%.
  • Contactless Cards - The security of a chip card, with the convenience of a tap.
  • This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR for 15 billing cycles for purchases
0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days
18.24% - 28.24% Variable APR on purchases and balance transfers
$0
Excellent/Good

Additional Disclosure: Bank of America is a CardRates advertiser.

Bank of America® Unlimited Cash Rewards credit card Review

at Bank Of America'ssecure website

0% INTRO APR RATING

★★★★★
4.8

OVERALL RATING

  • $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.
  • Earn unlimited 1.5% cash back on all purchases.
  • If you're a Bank of America Preferred Rewards® member, you can earn 25%-75% more cash back on every purchase. That means you could earn 1.87%-2.62% cash back on every purchase with Preferred Rewards.
  • No annual fee.
  • No limit to the amount of cash back you can earn and cash rewards don’t expire as long as your account remains open.
  • 0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 18.24% - 28.24% will apply. A 3% Intro balance transfer fee will apply for the first 60 days your account is open. After the Intro balance transfer fee offer ends, the fee for future balance transfers is 4%.
  • Contactless Cards - The security of a chip card, with the convenience of a tap.
  • This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR for 15 billing cycles for purchases
0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days
18.24% - 28.24% Variable APR on purchases and balance transfers
$0
Excellent/Good

Additional Disclosure: Bank of America is a CardRates advertiser.

Bank of America® Travel Rewards credit card Review

at Bank Of America'ssecure website

0% INTRO APR RATING

★★★★★
4.8

OVERALL RATING

  • Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don't expire as long as your account remains open.
  • 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases.
  • Use your card to book your trip how and where you want - you're not limited to specific websites with blackout dates or restrictions.
  • Redeem points for a statement credit to pay for travel or dining purchases, such as flights, hotel stays, car and vacation rentals, baggage fees, and also at restaurants including takeout.
  • 0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 18.24% - 28.24% will apply. A 3% Intro balance transfer fee will apply for the first 60 days your account is open. After the Intro balance transfer fee offer ends, the fee for future balance transfers is 4%.
  • If you're a Bank of America Preferred Rewards® member, you can earn 25%-75% more points on every purchase. That means instead of earning an unlimited 1.5 points for every $1, you could earn 1.87-2.62 points for every $1 you spend on purchases.
  • Contactless Cards - The security of a chip card, with the convenience of a tap.
  • This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR for 15 billing cycles for purchases
0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days
18.24% - 28.24% Variable APR on purchases and balance transfers
$0
Excellent/Good

Additional Disclosure: Bank of America is a CardRates advertiser.

+See more 0% intro APR cards

3. Selecting “Credit” Can Make It More Challenging to Track Your Budget

Since credit transactions take a few days to process, it’s important to keep track of your transactions daily. If you don’t and you end up relying on your account balance instead, you could be in for a huge surprise in a few days.

This is really important because of one thing: overdraft fees. If your account goes negative, you could be charged upward of $35 for every single transaction that goes through after you hit a negative balance. It only takes a few swipes of the card to dip your account several hundred dollars in the red. This can be avoided if you sign up for overdraft protection, in which case those negative transactions go through to a line of credit. However, there are still small fees for this (nowhere near as high as overdraft fees, though).

Even if you keep track of your budget every day, make sure you do so with your receipts. If you rely on the transactions you can see online, you’re going to be looking at some weird numbers. For example, gas stations might only authorize $1 at the time of purchase to make sure your card works. Or some might charge $50-$100 to cover the potential cost of your charge. A restaurant may also overcharge since they have to leave room for you to add your tip at the end.

In all of these instances, the charges will be reconciled in a few days. But a lot of damage can be done in those few days if you’re not keeping track of your balance based on your receipts.

How to Choose Between “Credit” and “Debit”

If you’re left wondering what the best option is after all this, the answer really just depends on your lifestyle. If you’re a master budgeter and would rather not enter your PIN every time you make a purchase, then choosing credit is a fine option. But if you don’t trust yourself to track your receipts daily, debit is the better way to go.

And if safety is your biggest concern of all, then the question comes down to whether you should even use a debit card. While the new chip and pin technology is a major improvement for security, using a card that has any access to your bank account could have more hazardous effects on your finances than swiping a real credit card that only has access to a line of credit.

For my part, I prefer to use my debit card at the ATM only. Then I use cash for most purchases and a credit card if I have to. That way, if a fraudulent transaction happens, the money in my bank account is still protected. And finally, I make sure to pay my credit card online when I make these transactions, ensuring that I don’t have to deal with interest charges or fall into debt.

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