“What kind of dressing would you like on your salad?”
For most people, it’s a simple decision. Not for me though.
I don’t know why, but when my server asks me that question I usually tense up and act like I’ve just been asked the million-dollar question on Who Wants to be A Millionaire.
“Dressing? I really can’t decide if I want ranch or blue cheese. Well, eh, um, ah, er, uh, oh, …” I know.
Hey, I love ‘em both. I mean, if you ask me, there is nothing better than fresh homemade ranch dressing drizzled over a bed of fragrant salad greens. Then again, there is nothing better than fresh blue cheese dressing drizzled over a fragrant bed of salad greens.
See my dilemma?
This particular time, my server just politely stood there, tapping a pen on her ticket book while I tried to make up my mind.
Meanwhile, on the other side of the table, I looked over at the Honeybee just in time to see her roll her big brown eyes.
Oh well, she’s used to it.
Choosing Debit or Credit: Does It Really Matter?
I’ll get back to my story in a minute, but I bet there are a lot of folks out there who get that similar deer-in-the-headlights reaction when they run their debit card through a merchant’s card machine at the checkout counter and are confronted with the dreaded “debit or credit?” question.
Don’t deny it, people. There’s nothing to be ashamed of. After all, this question is certainly a bit more complex than, say, ranch or blue cheese.
As you probably know, when you use a debit card you are asked whether you want to pay via one of two options: “credit” or “debit.”
Regardless of which option you choose, the money comes directly from the bank account tied to your debit card. Your decision of whether to pay via “credit” or “debit” simply instructs the bank regarding how you want the transaction to be processed.
If you choose “debit,” you are asked to enter a personal identification number (PIN) and the funds are then immediately removed from your bank account.
On the other hand, if you choose “credit,” the transaction is verified via your signature and the funds may not be taken from your account until the end of the day — or sometimes even later. This is because merchants often choose to process these transactions in a batch mode with other credit card transactions.
That’s it, really.
Now I know what you’re thinking. That’s great, Len, but when I’m using my debit card what’s the better choice? Credit or debit?
Well, it depends.
My Reasons for Choosing “Credit”
Merchants like to see us use the “debit” option because they get to pay a smaller fee to the banks when we enter a PIN. Even so, I almost always choose “credit” for the following reasons:
1. More consumer protection. I can take advantage of the credit card company’s liability protections and mediation process, which in my experience has been shown to be very pro-consumer.
2. Credit card rewards. More and more debit cards are offering rewards for their use, but most of the time it only applies if you select “credit.” If you enter your PIN number you can usually kiss those rewards goodbye.
3. Potentially higher transaction limits. To prevent a thief from draining your bank account too quickly, banks usually impose a daily purchase limit. However, you may be able to get around this limit in rare instances by choosing to pay via “credit.”
4. More convenience. You might be interested to know that I did a very unscientific experiment and discovered that it takes me an average of 2.1 seconds to enter my PIN, but only 1.6 seconds to sign my name. Hey, every millisecond counts, folks. That’s why anytime I can swipe my card without having to enter my PIN, I’m a happy camper.
My Only Reason for Choosing “Debit”
I can think of only one instance for selecting “debit” over “credit” and that’s when I need a little cash back with my purchase. And although it’s the only reason I ever choose to use the “debit” option, it’s a particularly good one because it allows you to avoid those irritating ATM fees. Not too shabby, huh?
Meanwhile, Back at the Restaurant…
Anyway, much to my family’s embarrassment, I continued to hem and haw over the decision to go with ranch or bleu cheese until the Honeybee finally offered me a life line. “Do you want me to choose for you, Len?” Would I ever!
Actually, I found her offer to bail me out kind of, well, romantic.
“Yes, please, Honeybee. Thank you.”
And with that, the heavy burden of choosing between blue cheese and ranch dressing was lifted off my shoulders as the Honeybee quickly ordered for me.
“He’ll have Italian.”
Photo Credit: Rool Paap
(This is an updated article that was originally published on December 20, 2010)