- Centurion Member
- Posts: 875
- Joined: Thu Apr 30, 2009 2:32 pm
- Location: Texas
Just to clarify, almost certainly once the card is swiped the merchant knows if it's debit or credit despite what it might or might not say on the card.
Debit card transactions that use a pin yield a lower interchange fee for the issuing bank and cost the merchant less. That is why some merchants offer discount for pin-based debit.
Signature debit is processed like a cc transaction with higher interchange fees, costing the merchant more. Many merchants discourage signature debit transactions the way they try to steer customers away from credit cards. I believe signature debit offers the customer more rights in disputing the transaction (??)
I could be wrong, but I think the credit card reform legislation eliminated (at least to a large extent) the prohibition on merchants charging a "fee" for cc transactions. They could always offer a "discount" for cash/debit, but now I think they can say, "This is cheaper if you pay cash/debit."
Hotels and rental car companies and anyone else that is exposed to customer-caused loss don't like/won't take debit because they're recovery is generally limited to what is in your account, as I understand it. I wonder if we might not see hybrid cards in the future, cards that function like debit but offer a credit line that can be activated at the transaction point by the customer and offered to the merchant (hotel, car rental company) that wants the ability to tap a credit line.
I've never carried a debit card because of security concerns and the low/non-existent rewards. However, I've recently started. I think in the months and years ahead we're all going to see more merchants shunning credit, or at least offering lower prices for debit.
If they cut me a break on price that is greater than the rewards I forego, I will use debit. I recently opened an additional free checking/money market account in which I only keep a couple hundred bucks. I carry the debit card associated with this account and use it when appropriate. I will not carry the debit card linked to my main checking, which sometimes (rarely) has real money in it.
If any of the above is incorrect, please don't hesitate to correct me.
American Express: Blue Cash Preferred (groceries, 6%; gas, department store, 3%); Gold Delta SkyMiles (Delta Air Lines, 2 miles/dollar, free checked bag).
US Bank: Cash+ (utilities, phone, internet, restaurant, 5%; drugstores, 2%).
FIA Card Services: Fidelity Amex (everything, 2%); Fidelity Visa (everything, 1.5%).
Chase: Freedom (rotating, 5%); Amazon (Amazon.com, 3%); PriorityClub (IHG hotels, 5 points/dollar); Sapphire (not in use).
*All cards are registered with PriorityClub IDine program for 8 points/dollar at participating restaurants.