Skim milk or 2%? Brand or off-brand? White bread or wheat bread? Shoppers have to make a lot of choices. One decision that can be confusing is whether you should choose debit or credit when using your debit card.

What Is the Difference?

The checkout process feels similar whether you choose credit or debit—in both cases, the money is funded by your checking account. However, what happens after you swipe or insert your card is very different:

Debit Credit
You’ll be prompted to enter your personal identification number (PIN).
Your signature is often required when you use credit. In some instances, your signature won’t be required, such as when the total is below a certain threshold.
Funds are transferred from your account straight to the vendor. The funds will come out of your account right away. The transaction goes through your cardholder’s network, so it may take a few days before funds are removed from your account. However, a temporary hold may be placed until the transaction is processed.
You can’t stop any payments because the money comes out of your account immediately. If funds aren’t available in your account, your credit union or bank could pay the charge, and you could end up paying an insufficient funds fee. Depending on the bank, you can handle disputes with an extra level of protection because some debit card issuers offer anti-fraud protection similar to what is offered for credit cards, as long as you choose credit when you use your card.

Some card issuers offer rewards for debit card purchases when you choose “credit.” If that is the case for you—or if you want the extra fraud protection (if offered)—you may want to select “credit” for all or most transactions. On the other hand, when you select “debit,” you can get cash back from your transaction. For example, the merchant adds $20 to your purchase amount and gives you $20 cash. That can help you save on ATM fees for cash withdrawals, so you may want to select “debit” when you need cash.

Ultimately, the decision is yours. And, now that you know the difference between choosing debit or credit, you can trust that you’re making the right choice for you.