As you whip out the plastic to pay for your groceries or a brand new manicure, you almost instinctually know what the cashier will ask you: Is that credit or debit? Sure, you may hear that question at least once per day. But does it matter which option you choose?
The short answer is: Not really. The purchase will still be withdrawn from the same account, regardless of whether or not you use your debit card as credit. Yet if you’re constantly selecting credit when you use your debit card, you’re not doing yourself (or your bank account!) any favors, experts say. Steal these habits of people who are great at saving money, instead.
For starters, card companies like Visa and Mastercard sometimes charge fees for the merchant or purchaser if credit is used. Charging the purchase as debit also allows you to get cash back, which can save you top dollar on annoying ATM fees.
Plus, using your card as debit means the purchase is taken out of your account right away, while selecting credit means the transaction could take a few days to process. That can prevent you from overdrawing funds from your account—an effective money-saving hack for the chronic overspender. Learn these 56 almost effortless ways to save money, too.
As for the perks of using debit as credit? You can get an extended warranty or fraud protection on your purchase, which might be beneficial if you’re paying for a big expense. And while we’re on the subject, this is the secret formula behind the magic number of your credit score.