Debit cards can resemble a credit card with some differences. The use of a debit card eliminates the need for written checks as the transactions are handled by electronic means. The money is deducted from your bank account right away.
When debit cards are used for purchases, the consumer is given the option of naming the transaction as either a debit or a credit card transaction. When used as a debit card, the pin number is the authorization for the bank to release the money. When used as a credit card transaction, the authorization is your signature.
POS Fees-Debit Cards:
When the card is used in a debit card transaction, the input of a pin number is required to complete the purchase. Retail stores charge a POS (point of service) fee of a dollar or more for customers who use a debit card for purchases.
By using the same card in a credit transaction, the POS fee does not apply. The POS fees can build up to a substantial amount of money during a month of transactions. My banker advised me to use the credit transaction option to eliminate the POS fee. In using the card as a credit card, you are, in effect, using a secured credit card.
Whether used as a credit or a debit card transaction, the purchase is authorized and the amount of the purchase is deducted right away from the consumer bank account.