What's the difference between debit vs. credit when using bank card?

At some places, when I use my bank card, I get an option to either use it as a debit card or as a credit card. If I select debit card, I provide my PIN. If I select credit card, I have to sign.





Other than this, what is the difference between the two? Does the bank handle the transaction differently?|||For you there is very little if any difference. The difference is to the merchant. Contrary to what some others have answered your debit card doesn't become a credit card just because you select that option.|||Very simply, when you run your check card as a DEBIT, you are using an ATM network to process the transaction, so you would enter your PIN. Sometimes, merchants do PINless transactions where you don't enter a PIN or sign your name, and it is processed as a CREDIT transaction through one of the major credit networks like VISA. And sometimes, you have to choose CREDIT and sign for your transaction, and it is also processed through a network like VISA.





The money comes directly from your checking account in both instances, sometimes instantly and sometimes taking days depending on the network and communication with your financial institution. The difference is simply how the transaction is processed by the merchant and what fees/income are distributed to both the merchant and card issuer. Either way, it's still a transaction from your checking account that will withdraw that amount when the transaction is finalized. Some financial institutions (mostly smaller ones) charge for PIN transactions because they do not result in as much income when processed.|||Debit - You spend only the money you have available. No extra fees or interest when using this card and you can't go beyond the amount you have.





Credit - Even if you have, let's say $2,000, on this card, you can still spend $3,000 on it but expect to pay a HEFTY amount of interest.





I guess it's because you can be screwed if somebody has access with your credit card than with your debit, so credit has tighter security than your debit.|||When you use debit you will be spending money that you actually have in the bank and when you use credit you'll have to pay it back