Thursday, December 15, 2011

Why would a bank insist I use the credit option when using a debit card?

So I just read about a program where chase will give you a small bonus for using your debit card to buy subway fare. However, they insist you use the credit option instead of the debit option when paying at a metrocard machine. As far as I know, I would be billed the same way (the money is deducted from my checking account) so what is the advantage to the bank here?|||Some times when you use your debit card as a debit card for things other than using an ATM machine your bank will charge you a fee (like they sometimes do if you use an ATM machine that does not belong to your bank). It comes out the same in the end though, just without the interest being charged to you or the fees.|||I think that it has to do with the fees generated by the bank machine. All credit and debit transactions require a fee from the vendor, banks probably get a bigger cut for credit than they do debit. Which is why some stores charge a fee if you are using a debit/credit card. Costs them more out of pocket.

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