Can You Use Your Debit Card as a Credit Card? The answer is yes and no. You can choose “credit” rather than “debit” at the register in many cases, but that doesn't mean your debit card actually acts as a credit card. To better understand the answer, let's look at the differences between these types of cards.
In a nutshell, debit cards immediately draw money from your bank account to cover a purchase, while charge cards require you to pay your bill in full each month. Debit cards act like digital checks; they pull money directly from your checking or savings account to cover purchases.
What Happens When You Use a Debit Card as Credit? If you select credit, this doesn't mean you're buying the items on credit and that there's a grace period. It does mean, however, that there's a lag time before the funds leave your account. It takes longer because the transaction doesn't happen in real time.
Is Debit Card Surcharging Legal? For debit cards and prepaid cards, surcharging is prohibited—even when the card is run as a signature-based transaction without the PIN. This restriction was implemented by the Durbin Amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Major rental car companies—including Avis, Budget, Enterprise and Hertz—all permit rentals on a debit card. But it's important to read the fine print. While most companies accept debit cards, they look for specific types of cards and require you to take additional steps that can make the process more time-consuming.
Car rental bookings made with a debit card are harder for a few reasons. First, you need to have enough cash in your bank account to account for the amount the car rental company puts on hold. This means you cannot have any expenses or bills you need to pay with that money before your rental car period is up.
Why Rental Car Companies Avoid Debit Cards. Many rental car companies prefer not to let customers use debit cards because it increases the risk they take on when renting to you. Unlike a credit card, a debit card only has as much money on it as you put in your bank account.
What laws exist that may relate to surcharging? Currently, 10 U.S. states have surcharging restrictions including California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. Please consult with legal counsel to determine whether your practices comply with relevant state law.
You aren't allowed to pass on debit card fees to customers, so you'll have to cover the cost yourself.
Average Debit Card Fees (2024)
The average cost to process a debit card transaction is 0.74% per transaction or $0.34.
Here are some cons of debit cards: They have limited fraud protection. According to the Federal Trade Commission, if your debit card is stolen and you notify your bank within two days, you could be responsible for up to $50 of any fraudulent charges.
If you don't have enough funds in your account, the transaction will be declined. When you choose to run your debit card as credit, you sign your name for the transaction instead of entering your PIN. The transaction goes through Visa's payment network and a hold is placed on the funds in your account.
If your debit card has a Mastercard or Visa logo on it, you can use it just like a credit card for online purchases. If you're shopping online and there's an option to pay with a credit card, simply select it. Enter the information from your debit card and finalize the payment.
Unlike a credit card, a charge card doesn't come with a preset spending limit. This can make it more flexible, since it will grant access to the buying power you need even if that amount fluctuates widely month to month.
You can avoid merchant fees
“If the debit card isn't charged a processing fee, it would be a better choice.” Also, you may want to consider using a debit card rather than a credit card when making an international purchase if you have a credit card that charges foreign transaction fees.
When you pay with a debit card, the money comes out of your checking account immediately. There is no bill to pay later.
Most debit cards have a fixed transaction fee of around $0.07 that is charged to merchants. Most credit cards have a percentage fee of 2.3% plus a $0.10 transaction fee. If you're looking to save money, try to accept as many payments as possible through debit cards.
Assessment fees mostly range from 0.11% to 0.13% of each debit transaction. Processor's markup fees can range from 0.75% to 0.9% of each transaction, plus $0.13 to $0.22. Some of these companies might charge businesses annual fees along with their other fees on every transaction.
As a consumer, you have options to avoid surcharges. These include using cash instead of a credit card to make a purchase, or using a debit card, for which surcharges cannot be applied. You can also choose to shop at businesses that do not charge these fees.
In most cases, federal law limits your liability for unauthorized debit card purchases to $50, provided you report the fraud within two business days of discovering it.
Cardholders who are assessed surcharges in states where there are laws related to surcharging may want to discuss this with the retailer or report the retailer to their state attorney general's office.
You can rent a car with a $300 credit limit, but it depends on the amount of time you plan on renting the vehicle and the type of vehicle you're renting.
There's no fee for making a large purchase, you just need to ensure you have the funds in your account.
The renter of the vehicle must be present to sign the rental agreement and provide their credit card at the time of pick up. The renter cannot provide a credit or debit card belonging to someone else for their use.