You have the option to use debit or credit when using your debit card. Depending on what you pick, different things happen when the payment is processed:

  • When you select debit: You enter your PIN and the funds are deducted from your bank account immediately. If they’re unavailable, the credit union has the option—depending on your courtesy pay agreement—to pay the charge and access a courtesy pay fee, or to decline the charge. This transaction is as close to cash as you can get without using bills and coins, and offers no chargeback rights.
  • When you select credit: The transaction requires a signature, and is processed by the credit card company. The funds may or may not be immediately deducted from your bank account, depending on how the retailer handles their transactions. Some retailers “batch” their credit transactions and send them in at the end of the day. Using credit instead of debit can offer you some anti-fraud protection and chargeback rights that “debit transactions” do not.