Using a Debit Card as a Credit Card: Is it Possible?

When you use your debit card, you may be able to pick “credit” or “debit” at the payment terminal. It’s possible to choose credit, and it works, but you won’t really be using your debit card as a credit card. The transaction amount is still directly debited from your bank account, and you won’t pay interest or receive a bill.

Choosing between “debit” and “credit” at the payment terminal has more to do with how the payment is processed. Here’s a closer look.

Can You Use a Debit Card as a Credit Card?

Technically, no. A debit card is linked to a bank account, often a checking account. You may use your debit card to get cash at an ATM and as a payment card for making purchases, either online or in person. 

When you make a transaction with your debit card, the money is “debited” from your linked account. Unlike paying with a credit card, you aren’t borrowing the money and paying it back at the end of the month (or potentially later, in which case you typically incur interest). Some consumers use their debit card as a budgeting tool since they generally can’t spend money they don't have.

Where some confusion may come in is when you use your debit card for a purchase and the payment screen asks, “credit or debit?” 

If you select the debit option, you usually get asked to enter your personal identification number, or PIN. If it's the correct code and you have enough in your account to cover the purchase, your payment is approved. The amount of your purchase is deducted from your account right away.

If you select credit, the money is still debited from your bank account. However, there may be a slight delay, generally up to three days, since the payment is processed differently.

Recommended: Using a Credit Card Like a Debit Card 

What Happens When You Try to Use a Debit Card as a Credit Card?

Selecting credit doesn't magically transform your debit card into a credit card (despite the fact that there may be a Mastercard, Visa, or other credit card logo on your debit card).

You’re still authorizing a debit from your checking account. The only difference is that the transaction gets processed through a credit card network (such as Visa, Mastercard, American Express, or Discover) rather than through a debit network (such as PLUS or STAR). 

When you choose the debit option, your transaction information gets sent through an electronic funds transfer (EFT) network. The network relies on a single transmission to authorize, clear, and settle the purchase amount. As a result, the transaction is reflected on your checking account right away. 

When you choose the credit option, it may take up to three days because now the merchant’s credit card processor and the payment gateway (e.g., Mastercard or Visa) are involved. Once the merchant batches their receipts and reconciles them with the credit card company, then your charge goes through.

The delay doesn’t mean you don’t need to have the funds available. If you don’t have enough in your account to cover the charge, it’s likely to be denied.

Recommended: How to Get Cash From a Credit Card 

What Happens if You Accidentally Choose Credit on the Payment Terminal?

Nothing big happens, and you’re still able to make the purchase. You may have to provide your signature to the terminal or on the receipt, but the transaction typically goes through, provided you have sufficient funds in your account. It may also take a little longer until the funds are withdrawn from your account. 

Things to Understand Before Using Your Debit Card as a Credit Card

Here are some key things to keep in mind when choosing credit rather than debit at the point of purchase. 

Choosing Credit on a Debit Card Does Not Mean Pay Later

Just because the transaction may take a few days to process doesn’t mean this is a “buy now, pay later” transaction. Even if the funds aren’t pulled from your account immediately, they are typically withdrawn within about three days, so they must be in the account. In fact, if you don’t have the funds available at the time of the transaction, the purchase is likely to be declined.

Tracking Your Budget Can Be More Challenging

If you opt to use your debit card as a credit card, it could make budgeting a bit more complicated. That’s because the funds aren’t debited immediately. When you look at your account that night, the funds may still be in your account, and the balance won’t reflect your true balance. If you think you have more in your account than you really do, you could end up overdrafting your account and incurring fees each time you slide, tap, or dip your debit card.

You May Get More Consumer Protections 

If you choose credit when making a debit card purchase, the card networks may offer you protections, such as zero liability for fraudulent purchases. That protection could come in handy if you ever need to dispute a charge.

It Could Cost the Merchant More

Using your debit card as a credit transaction may end up costing the merchant more than if you chose a debit transaction. A credit transaction adds layers to the process, which could lead to additional fees for the retailer or service provider. This won’t affect your bottom line, but if you’re trying to support small businesses, you might want to opt for debit over credit.

Recommended: What Is a Cash Card? 

Pros and Cons of Using Debit Card as a Credit Card

On the plus side, using your debit card as a credit card may offer you some additional fraud protection. It may also be a handy option if you can’t remember your PIN. In addition, it could also save some time at the point of sale for smaller purchases, since you likely won’t have to sign (or punch in your PIN) for the transaction to go through.

The downside is that it generally takes longer for the transaction to go through behind the scenes. As a result, you may have to collect your receipts and manually subtract debits to know exactly what your bank account balance is at the end of the day. If you make a mistake (and think you have more money in the account than you really do), you could overdraft your account and get hit with hefty fees.

Does Using Your Debit Card Build Your Credit?

No. Whether you select debit or credit at the checkout, using your debit card won’t help you to build your credit. To improve your credit, you generally need to borrow money and then pay it back responsibly, which you can’t do with a debit card. Having and using a credit card (and paying your balance in full and on time each month), on the other hand, may help you build a positive credit history.

The Takeaway

Contrary to what many people assume, choosing credit rather than debit when using your debit card doesn’t turn your debit card into a credit card. It just means the transaction is processed through a credit card network and that there may be a slight delay before the money debits your account.

Unlike using a credit card, going with the credit option on a debit card doesn't help you build credit or give you a grace period before you have to pay for the purchase. For that, you would need to use a credit card rather than a debit card.

If you’re currently thinking about getting a new credit card, Lantern by SoFi can help. With our credit card marketplace, you can view multiple credit card options without scouring the web and checking multiple sites. You just need to fill out one short application, and checking your rates won’t affect your credit score.