Why do banks want you to use your debit card as credit on purcases?

Recently I received a letter from my bank offering me a free airline ticket if I made 5 purchases in 3 months using my debit card as a credit card by signing the receipt instead of using a PIN. Whats the catch? What does the bank get out of it? Whats the difference?|||WEll, it is a rewards incentive ... same that credit cards offer.. if they are backed by Visa .... that is their reward.





Good Luck!|||I know that the company that processes the charges gets a fee from the store,you and the bank so it saves them money|||One reason -- they make more money that way. They collect a fee on every credit card purchase from the merchant. So that signature means money for the bank. Debit card purchases are processed differently. Also if people get in the habit of using the card for credit rather than debit they may be inclined to spend more. If you're using the card for debit it is coming right out of the account and you have to have the money to cover the purchase right then but if you use the card as credit, you'll be billed later and if you don't pay off the entire bill or don't pay it in a timely manner, the bank wins again with the interest and/or late fees.|||The bank charges the stores for every credit card purchase they process. At my shop, we are only charged 25 cents when you use your card as a debit card, but are charged a percentage on credit purchases, plus fees associated with "settlement" and "billing". For an average $20 charge card purchase I can sometimes pay up to 3-4 bucks in fees as opposed to the 25 cents I would have been charged if I had made you enter your pin. Now, my percentages are higher than big stores, because I have a lower volume of credit card sales, but you can imagine how it can quickly add up.|||The banks get a fee from the stores when you use a "credit card." My husband checked into accepting credit cards for his business a few years ago and I think the bank he talked to was going to charge 4% of each transaction. My credit union sent me a letter stating that I could use my debit card as a debit card 8 times in a month for free. If I use it more than 8 times as a debit card then I will be charged a fee. I can use it as a credit card as many times as I want and I won't be charged a fee.|||When you use your debit card with the PIN, you get charged a small fee for using your own money - in many cases. When you do it as a credit, you don't pay the fee, the merchant does, and it's larger than the one you pay.