Credit and Debit? I'm only 14 so I wouldn't really know this anyway.. But what's

I'm only 14 so I wouldn't really know this anyway.. But what's the difference between credit and debit? When my mom goes shopping, the banker always ask credit or debit so I was a short time ago wondering. 10 points for the best/detailed explanation. Thanks!

Answers: The answers given do a good job explaining the difference between debit (deducting from your dune account) and credit (borrowing money). Think of debit like writing a check, since it has like peas in a pod, immediate effect on your bank reason. In fact, the effect is even more immediate since within is much less time required for the transaction to finalize (i.e. no transfering of the paper document). When you widen a checking account and they give you a Visa or a Mastercard to use at the atm and also within the store - that's your debit card.

Your question adds another vein by asking what the difference is at the point of sale, when the cashier asks "credit or debit." A credit transaction is processed differently than a debit transaction, and is more expensive for everyone involved. You can usually identify a credit transaction by the required signature. (Although for some small transactions, signatures are no longer required.)

Strict debit transactions are cheaper to process and can be identified by the required pin number fairly than signature.

However, debit cards do have the option to run on the credit card processing rail, and we call this "signature debit." (Think about when you use your debit card online, or when you mitt over your debit card to the cashier and say "credit" instead of "debit.") This is compliant to merchants who do not have PIN technology at the point of sale. But for merchants who do hold the PIN pad available, it is incredibly better/cheaper for them when consumers choose "debit." However, many consumers don't realize the difference, and continue to say credit. This is because on the front of most debit cards, here is a Visa or Mastercard logo, and consumers think this means credit, when within fact it is a debit card and can be processed as such. The only time you can rest assured that you MUST read out credit is when you're using an American Express card, because Amex doesn't do debit.

I've attached a helpful explanation.

Credit money charging or borrowing the money to pay back following. Debit means coming straight out of your checking account. Credit is when you are putting something on credit..and you will have to earnings it back.
Debit is having that money in actuality taken out of your account at that time.
If they ask your mom "debit or credit" they are really saying, "are you paying presently or later?" :)
Hope that makes sense.

In a nut shell..Credit cards as based on a short time ago that, your credit. Credit is based on your past history of repaying loans, making payments prompt etc. Debit cards come right out of a bank account the card is connected to. However, nowadays you can use credit cards as debit cards to get lolly back or credit cards as debit to get special promotional points/rewards your guard might offer.. Its confusing sometimes.
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