Thread: Debit Card vs Credit Card: Stores Can't Tell The Difference?

Can a merchant tell if I have a debit card or credit card? Is it coded on the magnetic strip? I'm confused because when I stopped at the gas station and I paid inside, they asked if it was a debit card or a credit card. When I went to the grocery store they asked me the same thing. This got me to thinking they couldn't tell what kind of card it was.

Please don't shoot me but I decided to try out a Capital One prepaid Mastercard to try out my theory. I tried a debit card on with my local bank, but they only wanted to give me a $200 daily spend limit and there's a $35 fee if I go $.01 over plus there's a minimum deposit of $1,000. There's a $5 service charge for going under $1,000. Not worth it to make the change for that debit card. I don't recommend Capital One over any other card, I just closed my eyes and picked one. I funded the card with $500 ACH from my checking account.

I made a Hotel reservation using the card, but when I got there to check in, I was told I couldn't check in with that card, I needed to use a Credit Card. They said they only accept CC to check in, but I could pay the final bill with the debit card. When I called ahead to make a reservation at the next place they asked if I had a credit card to reserve the room and I just gave them the debit card number, then checked in with the debit card no problem.

Now you want to hear scary, I went to Wal^art with a friend and he wanted to show me something so he took the card, went to the self-checkout lane, swiped the card, signed the electronic pad "Santa Claus" and walked out with a $150 purchase. Next we stopped at a restaurant, I asked they guy at the counter if they took debit cards and he said "no" "credit cards only", I handed him the Mastercard, he ran it, I signed the slip and we walked out.

What gets me is the prepaid cards don't fit the definition of a credit card or a debit card and since they are reload-able, they certainly aren't a gift card. It says right in the documentation that comes with the card, this in NOT a checking account and you can't overdraft. Since there's no overdraft fee, it's not a checking account. Because there's no checking account, it doesn't fit the definition of a debit card. To be a real credit card, it would have to loan you the money that you will pay back later, since there's no loan, there's no credit. The card has the word "debit" on the face, but it's hard to see. Capital One refers to it as a "Prepaid Mastercard" with no mention of the word "debit" vs "credit".

Why do their need to be better regulations? Why not just nobody get the cards? Because more employers are doing direct deposit of paychecks. If you don't have a bank account and you currently get a paper check at my employer, you will be getting a prepaid card of the employer's choice and all future checks will be deposited to your card. I work with several people who for various reasons do not have a checking account and if they don't open a checking account or get their own prepaid card, my employer will provide them with one of his choosing. I could see someone loosing their whole paycheck and not being able to get the money back. I didn't feel comfortable with having more than $500 on the card a one time.

So does this card show on the system as a debit card, credit card or can't the system tell which it is?

Rental car companies must have some method of telling a debit from a credit card because years ago I had tried using one that made no mention of what it was on the card and the person came back to tell me it can be accepted because it is a debit card.

We can tell at least at the store i work at what type of card. We say debit or credit bc u can run it as both. if u run your debit card as credit then we pay a transaction % fee too (visa/master card or whomever), if you pay debit then it's like cash and the store gets 100% of what you pay. when you pay with a credit card (for my store) we know bc the screen instantly asks for the last 4 digits on the card, which tells me it's a credit card, or sometimes a prepaid card. So we know, but since the cc market is so saturated with more people use debit than credit (sorry i'm responsible and like to get money back for my money. even if it's only a penny per dollar. plus i like the safety a credit card gives my bank accounts, compared to debit cards) so yeah since most people use debit it's easier to just ask up front" debit or credit".

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.

When a debit card is swiped and the clerk gets prompted for "debit" or "credit" that identifies it and must be something only debit cards do, because credit cards won't do that. That means the clerk will always know what a card is right?

What gets me is the prepaid cards don't fit the definition of a credit card or a debit card and since they are reload-able, they certainly aren't a gift card. It says right in the documentation that comes with the card, this in NOT a checking account and you can't overdraft. Since there's no overdraft fee, it's not a checking account.

It would not meet the definition of a credit card but a prepaid card would be an accurate assessment according to Investopedia.

What Does Debit Card Mean?
An electronic card issued by a bank which allows bank clients access to their account to withdraw cash or pay for goods and services.

The definition does not specify the account type in which funds are withdrawn from.