“We’ll Just Run Your Debit as a Credit”

I’ve always been nervous about the cashiers in local stores when I try to use my debit card, but it doesn’t work. The cashier offers to “run my debit card as a credit card.” We swipe the card again, and everything works just fine. I have never had any problems with my account, but they seem to imply that I have not only a debit account at my bank, but also a credit account. One of the few things from law school decades ago I remember is that there are different rules for banks handling debit and credit accounts, so this whole deal made me uncomfortable.
After calling my local bank, I now understand this kind of transaction a little better. First, it is correct that the debit card does not have a credit account attached to it. You have one account per debit card, and it is usually your checking account (you might have two debit cards for one checking account). When a merchant “runs” your debit card as a credit, it has nothing to do with the bank – only with the card reader. You may be asked to sign a receipt after the transaction, but the money can only come from the account that is connected with the debit card.
Taking my paranoia one step further, what happens if you lose your wallet containing your credit cards and debit card, and someone finds your PIN number? Chances are that the thief will try to use the cards. If they try to use your credit card, federal law keeps you from being responsible for more than about fifty dollars, but if they use that debit card, your whole bank account can be cleaned out, and you get no refund.
If you have overdraft protection on your debit card, the thief can use the card for more than is in your account and make a purchase. You will loose all the money in your account, and lose the amount, the bank has loaned you through the overdraft advancement.
Be careful. Do not keep your PIN number anywhere near your debit card.

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