Tip of the Month

March 2008

Do You Know the Difference Between Debit and Credit?

So, you are getting ready to pay for your groceries with your Debit MasterCard and the cashier asks you “Debit or Credit?” Do you ever wonder why you’re asked that and what the difference is?

The merchant is simply asking how you would like your transaction processed. No matter how you respond, the purchase will deduct from your Service 1 FCU checking account. In other words, if you say “Credit,” the purchase will NOT be billed to a credit card.

So, what is the difference between Debit and Credit?

DEBIT:

• Processed through ATM Network.
• You can get cash back from your available checking account balance up to the merchant’s limit. You will then see the cash back amount added to the total purchase price to get the grand total for the transactions.
• You must use a personal identification number (PIN) to authorize the sale.

CREDIT:

• Processed through MasterCard Network.
• You must sign to authorize the sale.
• MasterCard transactions are more efficient and less costly than ATM transactions. You can help save YOUR credit union money by choosing CREDIT instead of debit.