Two Types of Debit Cards
There are two type of debit cards depending on how you authorize
PIN-based Debit Cards
ou provide your personal identification number, or PIN,
at the time of sale. PIN-based debit can only be done through
a credit card terminal or POS software system with an attached
To access your account at a store terminal, you must punch
in your personal identification number (PIN), as you would
at an ATM. The system checks your account to see if it has
enough money available to cover the transaction
Signature-based Debit Cards
These cards usually look like a credit card with Visa or
MasterCard logo and resemble a credit card transaction. You
sign a receipt for the purchase, as you would with a credit
card. Because the transaction occurs ˇ°offlineˇ± meaning the
funds are not deducted from your account in real-time.
The card-swipe terminals at checkout counters often display
an initial message asking you to key your PIN. If you want
to sign for the transaction instead, you may have to press
the terminal's "cancel" button, then select "credit"
rather than "debit."
Which Type Do You Prefer?
Some banks offer both types of debit cards, and some put
both debit functions on the same card. PIN-only debit cards
offer greater security because it's more difficult for unauthorized
people to use them. Cards that can work both in the PIN and
PIN-less methods offer more flexibility, especially when dealing
with merchants who do not have the equipment needed to process
PIN transactions. In either case, the funds are automatically
deducted from your account within a short time.
If your debit card works with either a PIN or a signature
and the store accepts both, you choose which way to use it
at the point of sale. If you choose debit on the merchant's
terminal and "swipe" your card through, you will
be asked for your PIN. If you choose "credit" on
the terminal and swipe your card through, you will be asked
to sign a receipt. Credit" does not mean that you will
be billed, as with a credit card. The money will be debited
from your account automatically.
Consumer advocates often recommend people to choose PIN-based
direct debit cards, since the PIN adds a layer of protection
against identity theft.