How widespread are debit cards in the US?

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Where I live, using a debit card when paying is the norm pretty much all around, and using cash is quite rare. I've heard that in the US using a card isn't that customary? And if you do you need to sign in addition to entering the PIN? Are establishments where cash is all they'll accept common?
 

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  • #2
phinds
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I have noticed for several years now that at gas stations when you put in a card and it asks what kind it is the default is that it is a debit card, not a credit card.

Hard to imagine any but the smallest stores in the USA where credit cards are not accepted and if credit cards are OK, surely debit cards are so no I can't imagine many places where it's cash only.
 
  • #3
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You don't use this card, do you ?
I thought people'd use it like some sort of a pre-paid card instead. I can't imagine how people insert their "credit cards" (with VISA/Master marks) and get charged for their purchased gasoline volume.
 
  • #4
phinds
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You don't use this card, do you ?
I thought people'd use it like some sort of a pre-paid card instead. I can't imagine how people insert their "credit cards" (with VISA/Master marks) and get charged for their purchased gasoline volume.
No I don't use company credit cards, just regular ones. I don't understand why you see any problem using regular credit cards at the gas station. They use the same mechanism as debit cards but you don't have to enter a pin or anything, just sometimes your zip code.
 
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  • #5
Borek
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I can't imagine how people insert their "credit cards" (with VISA/Master marks) and get charged for their purchased gasoline volume.
Exactly the way you said - you insert the credit card into the machine, and you get charged for the purchased gas. I do it all the time. Trivially simple. Yes, I use a VISA credit card, but the same machine will also accept non-credit VISA cards.
 
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  • #6
russ_watters
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Where I live, using a debit card when paying is the norm pretty much all around, and using cash is quite rare. I've heard that in the US using a card isn't that customary? And if you do you need to sign in addition to entering the PIN? Are establishments where cash is all they'll accept common?
I don't know if there is a language barrier here, but in the US a "debit card" and a "credit card" are the same physical card. They only differ slightly in their financial linkages and indeed the same card can often be used in either mode. We can discuss the intricacies of each or...

If you are just asking whether people use cash or cards, it is personal preference, but I tend to use cash only for small purchases and cards for everything else.
 
  • #7
jtbell
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Both debit and credit cards are common in the US, but different people have different preferences in using them.

I use cash for small purchases, up to about $10-15, and a credit card for larger ones. I always pay the monthly credit-card statements completely so as not to run up any interest charges.

I use a debit card only at a bank's cash-dispensing machine.

So far, I've used pre-paid / refillable cards only for fares on some city train and bus systems (e.g. Washington DC's Metrorail).
 
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When you say debit card, I think of a Visa Debit Card which you use like a credit card, except you are spending your cash that is available in that account. You do not get a bill each month telling you to pay the bank the money because what you are spending is your own.

I guess you're talking about the equivalent in NZ, an EFTPOS card. That's a card you swipe, choose either 'Cheque' or 'Savings' account and enter your 4 digit pin. Not every shop in NZ takes credit cards.
 
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  • #9
russ_watters
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When you say debit card, I think of a Visa Debit Card which you use like a credit card, except you are spending your cash that is available in that account. You do not get a bill each month telling you to pay the bank the money because what you are spending is your own.
The way you worded that is a bit confusing, but I think I know what you mean. My understanding is that "Visa" a payment processing company/method and "Debit" is a different payment processing method. So "Visa Debit Card" is self-contradictory word salad. It's a "Visa, Debit Card" (regardless of how it is printed on the card). I don't mean that to nitpick; it's confusing. Point being, I have two "Visa, Debit" cards, from the same bank, both of which can be used as credit cards or debit cards even though one is linked to a bank account and the other to a revolving line of credit.
 
  • #10
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To make things even more confusing you can have a "Visa electron" card (whatever it really means - I got such card in the past, it was just a debit card as far as I remember), and VISA virtual cards - my bank offers them for internet operations (they don't exist as a piece of plastic, but you can give the number which is connected to a subaccount in a bank - this way you can't be ever charged more than there is on the subaccount). Or perhaps these virtual ones no longer exist, I remember seeing them offered several years ago.

Plus, some VISA cards are flat, and some have embossed lettering, and these differ too in some way (my credit card has embossed letters, Marzena's credit card doesn't have them).

Not to mention at least four different technologies used to identify the card (embossed letters, magnetic stripe, chip and RFID).

And then, some solutions are used only in some countries.

And if you feel confused, you should listen to my son - at the moment he writes software for card payments. Typically I get lost mid-first phrase.
 
  • #11
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To make things even more confusing you can have a "Visa electron" card
Visa Nebula - Coming soon... It's in the cloud... :-p

Ah it's a joke.
 
  • #12
Fervent Freyja
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Where I live, using a debit card when paying is the norm pretty much all around, and using cash is quite rare. I've heard that in the US using a card isn't that customary? And if you do you need to sign in addition to entering the PIN? Are establishments where cash is all they'll accept common?
This will depend on the area. In mine, the method used is mainly debit. A couple of places have caught on and will take a debit card, but not a credit card. The business is charged a much higher percentage of the total to run a debit card as credit, now, many banks are asking their account holders to run their debit cards as credit and give loyalty points for doing so, as they profit considerably. Years ago, I ran internal audits on accounts received for a large corporation, occasionally issues would arise where I would catch customers being overcharged by associates after they found the customer was going to use a credit card. It was unacceptable (and illegal). It's so very amazing to me that people could think a company was okay with so many opportunistic behaviors. They didn't last very long under my watch, I just loved hunting down discrepancies in number patterns all day. Be wary for anyone asking your method of payment before closing a deal.

Many places that used to only take cash, like yard sales, flea market booths and such, now use adapters for their cell phones to run debit/credit cards. Still, most places here in the south will accept cash, but not a check. Also, Mastercard and American Express are less likely to be taken than Visa or Discover, as they charge the business higher percentages of the total purchase to process the transaction.
 
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The way you worded that is a bit confusing, but I think I know what you mean. My understanding is that "Visa" a payment processing company/method and "Debit" is a different payment processing method. So "Visa Debit Card" is self-contradictory word salad. It's a "Visa, Debit Card" (regardless of how it is printed on the card). I don't mean that to nitpick; it's confusing. Point being, I have two "Visa, Debit" cards, from the same bank, both of which can be used as credit cards or debit cards even though one is linked to a bank account and the other to a revolving line of credit.
Yeah, I'm not that good sometimes at writing what I want to say, which makes sense to me but may be unclear to others. The best I can do is refer you to this link https://www.asb.co.nz/bank-accounts/visa-debit.html in hope that clarifies.
 
  • #15
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I use credit cards for just about everything. I pay them off every month and collect points/miles.
 
  • #17
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I use credit cards for just about everything. I pay them off every month and collect points/miles.
Yeah, if you use a Visa (or MasterCard) Debit card, you don't need to pay the card off each month, because you are using your own money rather than the banks.
 
  • #18
SteamKing
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The way you worded that is a bit confusing, but I think I know what you mean. My understanding is that "Visa" a payment processing company/method and "Debit" is a different payment processing method. So "Visa Debit Card" is self-contradictory word salad. It's a "Visa, Debit Card" (regardless of how it is printed on the card). I don't mean that to nitpick; it's confusing. Point being, I have two "Visa, Debit" cards, from the same bank, both of which can be used as credit cards or debit cards even though one is linked to a bank account and the other to a revolving line of credit.
It's not quite that simple.

According to the Visa web site:

https://usa.visa.com/pay-with-visa/cards/card-finder/gift-finder-page.html

the company offers four types of cards, and they're not all necessarily interchangeable.

1. The traditional Visa credit card - this is a charge card with a credit account, usually offered through a bank or other financial organization. You charge your purchases and receive a monthly bill. Any unpaid balance starts to accrue interest charges at varying rates of interest.

2. The Visa debit card draws the amount of your purchase directly from your bank account. You don't need to carry cash or write a check to make a purchase.

3. Pre-paid cards are instruments which can be used if one does not have a bank account. The user loads funds into the card account and can keep re-loading money onto the card as long as desirable.

4. Gift cards are sold by retailers with a pre-determined amount of cash loaded. Once this amount is used up, you toss the gift card.
 
  • #19
phinds
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Yeah, if you use a Visa (or MasterCard) Debit card, you don't need to pay the card off each month, because you are using your own money rather than the banks.
And you don't get points / miles. In other words, Greg's way costs exactly the same as your way (what you spend and no fees) PLUS he gets points / miles.
 
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And you don't get points / miles. In other words, Greg's way costs exactly the same as your way (what you spend and no fees) PLUS he gets points / miles.
Yes, but if you max out your card and can't afford the monthly repayments then you're screwed. I want the security of knowing that what I pay for, using my Visa debit card, is money I actually have.

EDIT: but you can make the argument that you might not be given a credit card with x amount limit without the bank (or whatever) ensuring you can pay the monthly statements.But I refer to this point:
"1. The traditional Visa credit card - this is a charge card with a credit account, usually offered through a bank or other financial organization. You charge your purchases and receive a monthly bill. Any unpaid balance starts to accrue interest charges at varying rates of interest."
If the test for getting a credit card is the ability to pay the minimum repayment each month, you are charged interest on any remaining amount.

In any case, I'm not concerned with points that I could gain. I don't even know what points Visa even offers its customers if they use their credit card.
 
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  • #21
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Yes, but if you max out your card and can't afford the monthly repayments then you're screwed. I want the security of knowing that what I pay for, using my Visa debit card, is money I actually have.

EDIT: but you can make the argument that you might not be given a credit card with x amount limit without the bank (or whatever) ensuring you can pay the monthly statements.But I refer to this point:
"1. The traditional Visa credit card - this is a charge card with a credit account, usually offered through a bank or other financial organization. You charge your purchases and receive a monthly bill. Any unpaid balance starts to accrue interest charges at varying rates of interest."
If the test for getting a credit card is the ability to pay the minimum repayment each month, you are charged interest on any remaining amount.

In any case, I'm not concerned with points that I could gain. I don't even know what points Visa even offers its customers if they use their credit card.
Companies like Visa offer individuals credit cards with a set credit limit which is usually determined by the card holder's creditworthiness. For people who have damaged credit, or who have not established a credit history, often the pre-paid card is the vehicle offered to them, until such time that their financial situation changes and they can qualify for a credit card.
 
  • #22
billy_joule
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And you don't get points / miles. In other words, Greg's way costs exactly the same as your way (what you spend and no fees) PLUS he gets points / miles.
Well, the months interest must be paid by someone, either the banks bank on users missing payments and take the hit for on-time payers or it's built into the fee structure somewhere.My experience in New Zealand is that credit cards have over double the monthly fees of debit cards.
I thought about getting a credit card when I was offered one as a student as it was fee free, I planned on transferring the limit over to an on call savings account and then back again on the due date, rinse and repeat for free money, alas the 'cash advance fee' put an end to that.
 
  • #23
russ_watters
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It's not quite that simple.

According to the Visa web site:

https://usa.visa.com/pay-with-visa/cards/card-finder/gift-finder-page.html

the company offers four types of cards, and they're not all necessarily interchangeable.

1. The traditional Visa credit card - this is a charge card with a credit account, usually offered through a bank or other financial organization. You charge your purchases and receive a monthly bill. Any unpaid balance starts to accrue interest charges at varying rates of interest.

2. The Visa debit card draws the amount of your purchase directly from your bank account. You don't need to carry cash or write a check to make a purchase.

3. Pre-paid cards are instruments which can be used if one does not have a bank account. The user loads funds into the card account and can keep re-loading money onto the card as long as desirable.

4. Gift cards are sold by retailers with a pre-determined amount of cash loaded. Once this amount is used up, you toss the gift card.
My understanding was that at the point of sale, all Visa credit card transactions (1, 3 and 4) are identical, whereas a true debit transaction doesn't go through Visa at all. I'm pretty sure that if I use my bank card in debit mode, the money is withdrawn from my account instantly, whereas if I use it in credit card mode, it takes a couple of days to be processed by the credit card company before being withdrawn from my account. Note also that a debit transaction does not need to be linked to a bank account. Most credit cards come with "cash advance" capability, which allows you to use it in debit card mode.

And what I mean by modes is:
Credit card mode is where you select "credit card", swipe, and either sign or provide your zip code.
Debit card mode is where you select "debit card", swipe, and provide your bank/atm pin # (or your credit card's atm pin #).

Note also that "credit card mode" is changing, with the use of chip cards in the US. I think retailers and card companies were required by law to have implemented them a few months ago, but most retailers still don't have active chip readers.
 
  • #24
russ_watters
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Well, the months interest must be paid by someone, either the banks bank on users missing payments and take the hit for on-time payers or it's built into the fee structure somewhere.
Yes, banks make money on credit cards due to membership fees, interest and late fees (edit: and by charging the retailer a transaction fee). But if you select a points card with no membership fee and always pay on time, you can make money on it. I mostly use my Amazon (by Chase) card these days.
 
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  • #25
jtbell
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Everyone has to come to their own judgment of the risks of debit versus credit cards, and act accordingly.

I use credit cards instead of debit cards because I prefer to keep a buffer between the "outside world" and my checking account. In recent years, I've had my credit cards compromised three times, with bogus purchases by people who stole my card information. In each case, the card issuers quickly invalidated the charges, closed the account, opened a new one for me, and sent me a new card. No money ever left my checking account. If they had been debit cards instead, the money would have been gone from my checking account, if only temporarily.

On the other hand, many people do have trouble paying off their credit card balances at the end of each month and thereby avoiding interest charges. Many people (in the US at least) carry credit-card balances of thousands of dollars, at > 18% annual interest rates. It's sensible for people in that situation (or who fear falling into that situation) to avoid credit cards completely.

My wife and I don't actually use our credit cards much, usually no more than 5-6 times a month, except when we're traveling. We've never had trouble keeping enough money in our checking accounts to cover the amount we owe on them.
 

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