Picture this: You are at a grocery store in a hurry to get home after a long day. You grab your wallet to pay when the merchant asks you, debit or credit? Which do you choose? This is a decision we face almost every day but may not necessarily know how we get to our end result. To answer this question, we need to understand the difference between how Debit and Credit Cards are processed.

Debit Cards can be processed as PIN-based or signature-based transactions. PIN-based transactions require your 4-digit PIN code, which could be stored on the merchant’s system. A common misconception is that Debit Cards are less secure because their PIN code can be compromised should a merchant ever be breached. However, Debit Cards can be used more securely as a credit or signature-based transaction. Signature transactions on a Debit Card do not affect your credit, and the funds are still pulled from your checking account. This transaction type helps protect your PIN code from being compromised because it does not require the 4 digits to complete the transaction.

Credit Cards are commonly viewed as more secure because they are usually only processed as signature-based transactions and because they are not tied directly to your Checking Account. Credit Cards are different from Debit Cards in that they are considered a loan and typically offer benefits that are important to the Credit Card holder, such as earning rewards with every purchase, a low rate, or building a credit history.

Security is our #1 priority, and just know that Yolo Federal will take every step necessary to protect you and your finances. Schedule an appointment with a Yolo Federal representative to learn more about the security of our Debit and Credit Cards today!