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This is something I’ve been mildly curious about for years. I never figured anything bad would happen when I swiped my debit card as credit but I was never sure. The coffee shop across the street from our BroBible office in SoHo (NYC) has two card options: U.S. Credit or International.
For years, I just chose the credit option without thinking twice about it because the other option was international. As it turns out, their system is just labeled terribly and the options were credit or debit. I guess this is just a really long-winded way of explaining that I’ve finally found out what happens when you run your debit card as ‘credit’ thanks to this article on Business Insider:
Debit and credit transactions are processed differently: Here’s how MasterCard explained it in an emailed statement to Credit.com: When you use a debit card and your PIN (personal identification number), the transaction is completed in real time, also known as an online transaction — you authorize the purchase with your PIN and the money is immediately transferred from your bank account to the merchant. With a credit card, or using a debit card as credit, it’s an offline transaction. (via)
So, the primary difference is the speed of the transaction. A debit transaction takes place in real time. It is immediately reflected in your balance. Whereas the credit transaction takes place offline and can take 2-3 days on average to process before it’s reflected in your bank account.
For more on this, you can click here to visit Business Insider‘s article.