Use a Debit Card As a Credit Card Without Your PIN Number

When your bank or credit union provides you with your debit card you are also given a Personal Identification Number, or PIN, that you must enter when you make cash withdrawals using your card at Automated Teller Machines. However, when you make purchases at point-of-sale terminals using your debit card you do not have to use your PIN.

Debit and credit cards look similar and both cards are used to conduct the same kind of transactions. Consequently, when you use many POS terminals you have to indicate whether you are using a credit or a debit card. You can choose to process your purchase as a credit transaction even if you are using a debit card; to do so, sign for your purchase rather than entering your PIN.

Some merchants do not require you to enter a PIN or sign for transactions for less than $25. The cashier simply swipes your card through the POS terminal and then gives you a copy of your receipt. The POS terminal records your card number, but the merchant has no other evidence to substantiate the identity of the person who made the transaction. You can also make purchases online or over the phone using your debit card but not your PIN in which case the vendor records your card number and the three-digit customer verification number listed on the signature panel on the back of your card.

Merchants that accept debit and credit cards must pay a processing fee for every transaction made with a card. The fees for credit card transactions are higher because part of the fee goes toward paying for liability insurance that protects credit cardholders from losses due to theft. Additionally, some of the surplus funds go to the card issuer and many banks pass on this fee income to debit card holders through points programs that reward you for using your card. Therefore, you can actually make money by using your debit card but not entering your PIN.

To minimize the cost of fees relating to payment processing, many merchants have programmed POS terminals so that the machine automatically assumes you are making a payment with a debit card. As soon as you swipe your card you are prompted to enter your PIN. However, unless the merchant expressly forbids the use of credit cards, you can normally override the prompt by pressing cancel in which case the machine processes your payment as if it were made with a credit card.