Should you sign for a debit card purchase or use your PIN?

Ever noticed how when you swipe your debit card at the grocery, you have to choose Credit or Debit? Most choose Debit and enter their PIN to pay for the purchases.

Did you know you can choose Credit and NOT enter your PIN? In this case, you have to sign for your purchases. So what should one choose and what is the difference? If you don’t want cash back, always choose Credit and sign for your purchases. There are a couple of advantages to this.

  • Your purchase is protected against fraud by Visa or Mastercard(depending on the logo on your card). This is akin to using a credit card. Zero liability in case of fraudulent use
  • The money leaves your account in a day or two and not instantly

When you choose to enter your PIN, you have only the protection of your bank which may or may not stand behind you in case of fraud. If your debit card is compromised, a hacker to drain your bank account and there isn’t much you can do.
should you sign for a debit card or use your pin
TIP: So, unless you require cash back, always use your your debit card as you would use your credit card by signing for your purchase. Your purchase is protected as it is protected when paid using a credit card, that is, you can dispute a transaction if you are not satisfied and your money is protected in case of fraud.

TIP: Debit card is also called a Check card. Debit/Check cards are co-branded by either Visa or Mastercard along with your bank and carries the same protection as a credit card. A PIN is not required when making a purchase with a Debit/Check card.

ATM cards require a PIN. Historically ATM cards only carried your bank’s logo. But nowadays, ATM and Check/Debit cards are sent out as a single card with Visa/MC branding.

2 thoughts on “Should you sign for a debit card purchase or use your PIN?

  1. I rarely used my debit card. But if I have to, I prefer just signing off on it and using it like a credit card. On some transactions, stores usually charges the debit holders. And your right about the VISA and Mastercard providing the fraud protection.

  2. Of course MasterCard wants you to sign for the purchase. Then the card is run as a credit card and they get to keep 3% of the transaction amount (taken from the merchant’s pocket). If you run it as a debit card they can only take a cut of 21 cents by law.

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