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darcy log... darcy log...
 
M$1 February 25, 2009 03:07 AM

What is the difference between a debit and a credit card?

Okay, I am not totally clueless. I understand the generic differences. Here's why I am asking.

I received a rebate in the mail from H.H. Gregg in the form of a Visa Prepaid Card.

The card says "DEBIT" on it. The letter attached to the card says that it can be used "everywhere Visa debit cards are accepted." It also says in big all capital letters "THIS IS NOT A CREDIT CARD."

I understand that. Here's the confusing part. The letter goes on to say, "At checkout, always select CREDIT when making purchases." It also says "Your card does not have ATM access."

So, it is a debit card that cannot be used as a debit card. It has to be used as a credit card, but it is not a credit card.

Had I not read the letter, I would have tried to use it as a debit card. After all, the card says it is a DEBIT card.

Does this make sense to anyone? If so, can you explain it to me.
Does there need to be some kind of new term for these cards as to avoid confusing people?

I'm not only offering a tip, I also have a $50 off coupon good for any item over $499 at H.H.Gregg. You want, it let me know. (Offer expires 3/31)
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michaelpau... michaelpau...
 
 February 25, 2009 03:20 AM
Hey Darcy,

It works like this: a credit card is something you pay off every month. A visa prepaid card acts like a gift card in that it has a balance. Once that balance reaches zero, it's over. None of this is news to you.

Here's where I hopefully fill in the gaps:

In stores, when you press Debit, you're actually initiating an EFT (Electronic Funds Transfer), which oftentimes takes place instantly and the store zaps your checking account. Pressing the Debit button requires a special PIN number attached to your checking account's debit card. Since your gift card doesn't have one, visa allows you to use it like a credit card. No special PIN, just swipe it like a credit card.

Does that make sense?
Asker's Rating:
• I am still not convinced that the difference between them makes any sense, but at least this answer did.


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philipy philipy
 
February 25, 2009 03:55 AM
Good answer. The card is not really a debit card in that it doesn't debit your bank account. And it's not a credit card either because it's not offering you credit! The info you've been sent is trying to make sure you put it through the right systems in the right way so everything works, but not explaining it very well.

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philipy philipy
 
February 25, 2009 04:16 AM
It says "DEBIT" on the card so that people that only have the old fashioned manual imprint machines (or God help'em, people who don't even have those) are not fooled into accepting it for a credit card transaction they can't validate.

http://www.merchantequip.com/images/products/bigimages/manual_imprinter.jpg

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michaelpau... michaelpau...
 
February 25, 2009 06:41 PM
This should probably end your question:

It probably should say "visa prepaid" or something to that effect, but it does not. So, I submit to you this logic: a debit card starts out with a balance (i.e., your checking account balance) and eventually works its way down to zero dollars. So does this rebate card.

On the other hand, a credit card works exactly the opposite. It starts at zero and works its way up. You accumulate debt with a credit card. This is the exact opposite of a debit card (gift card/rebate card/prepaid visa) because with a debit card you reduce the prepaid balance to zero--whether that balance is the card's balance, in the case of a gift/rebate card, or your checking account balance, in the case of a true debit card linked to your account.

So, in order to (attempt to) avoid confusion, they called it a debit card because it starts with a balance of $50 and works its way down to zero. However, since there's no PIN associated with the card, they tell you to "press the credit button" so, as philipy said above, it can be processed using the appropriate systems.

What do you think? ;)

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tracebooks tracebooks
 
February 25, 2009 03:13 AM
That's certainly an odd one. Do you ever get the feeling that they're just trying to fine-print you to death?

I got a card like this from Best Buy last year. There is money on it, but apparently their system needs you to hit the Credit button in order to process it, rather than them having to let loose their bank account information into the wild.

Maybe they should call them Rebate Cards and put a special button on the machines for that.
Source(s):
My own experience


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dweezel dweezel
 
February 25, 2009 03:15 AM
The difference between this prepaid card and the debit card you receive from your bank, is that you do not have a pin number to remove cash from an ATM. This is the same pin number that you would enter at a retail establishment if you select the debit option. By selecting credit, the retail establishment will not ask you for a pin number and you will have to sign the sales receipt.

As for the capital letters saying that this is not a credit card, it means that you cannot go beyond the preset limit on the debit card. In addition, you will not receive a bill in the mail for using the card.

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smokenherb smokenherb
 
February 25, 2009 03:18 AM
If it was a true Debit card you would be assigned a pin number but in this case its a Debit card but has to be used as a credit card and more then likely you'll be asked for a signature like a credit card.

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brendo brendo
 
February 25, 2009 03:23 AM
Nope - my Debit Mastercard has a pin number.

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smokenherb smokenherb
 
February 25, 2009 03:28 AM
But you said this was a Visa Debit Card?

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waulok waulok
 
February 25, 2009 04:50 AM
Credit cards AND Debit cards can both have PINs now.

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waulok waulok
 
February 25, 2009 03:31 AM
I have a Visa debit card on my bank account. I can use it on any website or other place I could use a credit card, but it only uses my own money and not bank credit.
The best reason to use the Credit button on an EFT for me is Visa will offer purchase protection and can offer refunds for wrong charges if I use the Credit button on the EFT machine. If I use Debit, it's gone.

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karlroby karlroby
 
February 25, 2009 04:16 AM
Credit card conveniently lets you use other people's money to pay for stuff, and you pay it back with interest. Debit card uses money you already have to pay for stuff in exactly the same way you can with a credit card - but there is no interest. The debit card gives you the convenience of "pay anywhere" with your own money.

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karlroby karlroby
 
February 25, 2009 04:26 AM
Prepaid credit card starts with your money, but once you've used that up it starts coming out of other people's money, costing you interest.

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dhawk dhawk
 
February 25, 2009 05:00 AM
My thought is this: Debit simply means that there is money in place to cover whatever it is that you will purchase. That being said, you cannot use the card at an ATM to take out cash. You'll notice at BestBuy/WalMart/Grocery stores and other places that sell prepaid cards, you can buy prepaid Visa cards. Let's say the card is for $25. My understanding is that you can use this card anywhere visa is accepted but you, or whoever you give the card to, cannot get cash. Think of it like a prepaid Starbucks card. You can use it like cash at Starbucks. Cash has already been paid to cover the card. When you use it at Starbucks, you draw down on the prepaid credit. Once it is gone it is gone. When you use a Starbucks card, they'll tell you how much money is left on the card. What they are really saying is how much money is left on the card that you can use at Starbucks. Starbucks won't give you cash for the card. This is unlike a credit card where you are spending money that hasn't been paid yet. I hope this helps.

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xands xands
 
February 25, 2009 05:10 AM
In simple terms debit is PRE paid, credit is POST paid

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nadiraziz nadiraziz
 
February 25, 2009 10:21 AM
The point I think you're missing is that the letter says your card cannot be used at an ATM, but you have assumed it is not a debit card as well. Just because you have to select creidt at a checkout point does not automatically mean it is a credit transaction.

What you have is a DEBIT card, and unless you are authorised to use it otherwise, it will remain so.


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