Debit Card or Credit Card Industry

When you are shopping with debt card the issuers are making you sign a slip rather than use your PIN as it is becoming difficult to differentiate between debit card from a credit card. Now the cash cards are imposing spending limits, charge annual fees and offer air miles for purchases.

The banks and credit cards have started the airline mileage scheme on debit card purchases. But most of these perks apply only if you treat the debit card as a credit card.

When you use your debit as a credit card and sign for a purchase, the funds are taken out of your checking account, but the transaction is processed through the credit card network. That means the card issuer gets a bigger fee (out of the merchant's pocket) than with a PIN transaction. A few issuers are even starting to charge debit-card holders a nickel or dime fee for every PIN transaction as another way to encourage them to choose the signature method.