When I use a prepaid card, should I choose "debit" or "credit"?

When you pay with a prepaid card at a retail location with a PIN pad, you may have the option to choose whether to run the card as “credit” or “debit.”

If you choose “debit,” you enter the PIN you created when you registered your card, and it is treated as a cash transaction with the funds immediately withdrawn.

If you did not create a PIN, choose “credit.” If you choose “credit,” you only need to sign your name. The funds will be taken from the balance of your prepaid card, but not immediately. The transaction is treated like a credit card purchase and does not get withdrawn until the merchant settles the purchase, which could happen at the end of the day or the next day.

You must have the funds available on your card, for your debit or credit transaction to go through.

Some prepaid cards charge you a fee, or different fees, if you choose debit or credit, so check your cardholder agreement to learn about any applicable fees.

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