eftpos

Should I select credit, cheque or savings?

Not sure which button to press? This handy guide will clear up any confusion.

Picture yourself at the end of a big shopping spree. You’ve picked out a wide selection of must-have items to add to your wardrobe, they’ve all been scanned and you’re ready to pay for your purchases. The bill is over $100 so you can’t just tap and go, but you’re faced with an important decision: should you pay from your cheque, savings or credit account?

Have you ever wondered what the difference is between pressing cheque, savings or credit? Read on to find out.

St.George Complete Freedom Account

Bank Account Offer

Enjoy low monthly account-keeping fees with St.George Complete Freedom Account and $0 ATM fees.

  • $0 monthly fee on new accounts or with at least $2,000 deposits made per month
  • $0 ATM withdrawal fee at 50,000+ ATMs globally
  • Visa Debit with payWave

    Compare debit cards below

    Rates last updated April 28th, 2017
    $
    Monthly Account Fee Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Details
    NAB Classic Banking
    $0 monthly account fees.
    Tap and pay with your NAB Visa Debit card, NAB Pay for Android or NAB PayTag for iPhone.
    Visa $0 $0 $0 account keeping fees with no deposit conditions. Unlimited free withdrawals at NAB and rediATMs. Go to site More
    ING DIRECT Orange Everyday Account
    $75 cash bonus + Apple Pay available.
    Get a competitive ongoing variable rate when linked with a Savings Maximiser.
    Visa $0 $1,000 $0 monthly account keeping fees. Unlimited free withdrawals at any ATM in Australia if you deposit $1,000 each month. Go to site More
    Bankwest Qantas Transaction Account
    Earn Qantas Points on eligible purchases and on your account balance.
    Conditions apply.
    Mastercard $0 $2,000 $0 account keeping fees when you deposit at least $2,000 into your account each month. Otherwise, a $6 monthly fee applies. Unlimited Free withdrawals at Bankwest and CommBank ATMs in Australia. Go to site More
    HSBC Day to Day Transaction Account
    Your Visa debit card unlocks special privileges worldwide with the HSBC home&Away Privilege Program.
    Visa $0 $0 $0 account keeping fees. Unlimited free withdrawals at over 3,000 HSBC, Westpac, St.George, Bank of Melbourne and BankSA ATMs. Go to site More
    ANZ Access Advantage
    $100 voucher for new customers (conditions apply).
    Your new Visa debit card must be used three times before 4 June 2017 and opened before 30 April 2017.
    Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at ANZ ATMs. Go to site More
    Westpac Choice
    $0 ATM withdrawal fee at 50,000+ ATMs globally.
    Via Westpac's Global ATM Alliance. Get Cash without your debit card (conditions apply).
    Mastercard $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at St.George, Westpac, Bank of Melbourne and BankSA ATMs. Go to site More
    BankSA Complete Freedom Account
    Open one in less than 5 minutes with Cardless Cash available.
    Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at BankSA, St.George, Westpac and Bank of Melbourne ATMs. Go to site More
    Bank of Melbourne Complete Freedom
    Get Cardless cash and shop securely with your Visa debit card. Customise SMS and email alerts.
    Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at Bank of Melbourne, St.George, Westpac and BankSA ATMs. Go to site More
    St.George Complete Freedom Account
    10% Cash back for online gaming purchases.
    Waived account keeping fees when minimum deposit is met with no minimum balance.
    Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 fee applies. Unlimited free withdrawals at St.George, Westpac and BankSA ATMs. Go to site More
    BankSA Express Freedom Account
    Get Cardless Cash, free SMS and email alerts.
    Visa $0 $1,000 $0 account keeping fees when you deposit at least $1,000 into your account each month. Otherwise, a $3 monthly fee applies. Unlimited Free withdrawals at BankSA, St.George, Bank of Melbourne and Westpac ATMs. Go to site More
    Bank of Melbourne Express Freedom
    Get Cardless Cash and PAYG branch and cheque services.
    Visa $0 $1,000 $0 account keeping fees if you deposit at least $1,000 per month. Otherwise, a $3 monthly fee applies. Unlimited free withdrawals at BankSA, St.George, Westpac and Bank of Melbourne ATMs. Go to site More
    Bankwest Easy Transaction Account
    2% cash back offer for new customers (conditions apply).
    Open account by 30 June 2017 to earn 2% cash back on contactless purchases and pay no monthly fees until 31 August 2017.
    Mastercard $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $6 monthly fee applies. Unlimited free withdrawals at CommBank, NAB, ANZ, Westpac, St.George, Bank of Melbourne and BankSA ATMs. Go to site More

    What’s the difference between credit, cheque or savings?

    Every debit card payment terminal you see at a supermarket, service station or any other retailer in Australia has three buttons: cheque, savings and credit. Let’s take a closer look at what would happen if you pressed each one after swiping your card:

    • Credit. You press this button when you either pay using a credit card, or with a debit card that can also be used as a credit card. Of course, you’ll need to make sure your card is linked to an account relevant to the button you press in order for the transaction to work.
    • Cheque. Press this and the money to pay for the purchase will come out of your everyday transaction or chequing account.
    • Savings. The purchase you make will be charged to your savings account. If there is no specific savings account linked to your debit card, the funds will be taken from your everyday transaction account.

    Does it matter?

    It’s always important to be sure that the funds used to pay for your transaction are withdrawn from the right account. For example, do you want to pay for an item on credit (and run the risk of earning interest on your debt if you don’t pay it off in the next 30 days) when you could pay with money from your transaction account? If your card is linked to multiple accounts, pressing the right button will make a big difference.

    Why it matters

    The button you press will also affect how your payment is processed. Cheque and savings transactions are processed through the EFTPOS system, while credit transactions are processed by Visa or MasterCard. Debit transactions are deducted from your account immediately, while credit purchases are considered “offline” transactions and take longer to process.

    When you pay using your credit card, you get the security benefits of Visa and MasterCard’s “chargeback” protection. This makes it easy to get your money back if there is a problem with the transaction, such as if your transaction is processed multiple times or you don’t receive the goods you pay for, and is paid for by the merchant’s bank.

    Chargeback protection from EFTPOS, meanwhile, is paid for by your bank, so it costs the merchant less. This is why you will see some stores imposing surcharges or minimum limits on credit card transactions, but not on transactions carried out with debit cards.

    This in turn brings us back to another reason why it’s important to press the right button when you pay for a purchase. If there is a transaction account and a credit card account linked to your card, selecting credit could lead to you paying an extra surcharge on top of the purchase price.

    Weigh up the pros and cons

     Option

    Pros

    Cons

    Credit
    • You can pay for your purchase on credit, meaning you don’t need to worry about having sufficient funds in your account to cover the transaction.
    • Chargeback protection is provided by your credit card provider.
    • Your bank or card provider will also monitor your card regularly for any suspicious activity or fraud.
    • A credit card surcharge may apply to your transaction.
    • The merchant may impose a minimum limit on the transaction.
    • You will need to pay your credit card debt off in time to avoid being charged interest on your purchase.
    • Transactions aren’t processed immediately, which can be frustrating when fast payment is needed.
    Cheque/Savings
    • Transactions are processed immediately.
    • If there are insufficient funds in your account, the transaction will not be completed. This can stop you getting into debt.
    • Because you pay using your own money, you don’t have to worry about earning interest on your debt.
    • Can be confusing. For example, even if you select “savings”, your account may be linked to a transaction account rather than a savings account.
    • If you have insufficient funds you will not be able to complete the purchase.
    • You will not enjoy the same level of fraud protection as is offered on credit purchases.

    Dual-purpose cards

    Some debit cards offer the flexibility to also be used as credit cards. If you have one of these cards and you want to pay by debit, select cheque or savings after swiping.

    If you’d prefer to pay by credit, you can select credit after swiping your card or opt to swipe it over the merchant’s contactless payment terminal (PayPass or payWave). However, be aware that using your dual-purpose card as a credit card will usually attract high interest rates.

    What happens when I make a contactless payment?

    With an ever-increasing number of Australians using cards with contactless technology, tap and go payments have largely replaced the traditional methods of payment for transactions under $100. But which account is the money drawn from when you tap your card?

    If your contactless card is a debit card, the money used to pay for your purchase will come from the transaction or savings account linked to your card.

    If your contactless card is a credit card, the funds will be drawn from your credit card account, regardless of whether there is also a transaction or savings account linked to the card.

    If you have multiple accounts linked to your debit card and you’re at all unsure about where the funds will be drawn from when you make a purchase, contact your bank. Once you’re aware of the differences between using cheque, savings or credit to pay for a purchase, you can make better decisions about how you manage your money.


    The latest in banking

    Tim Falk

    A freelance writer with a passion for the written word, Tim loves helping Australians find the right home loans and savings accounts. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

    Was this content helpful to you? No  Yes

    Related Posts

    Savings Account Offers

    Learn about our information service
    ING DIRECT Savings Maximiser

    Maximum Variable Rate

    3.00

    Standard Variable Rate

    1.50
    ME Online Savings Account

    Maximum Variable Rate

    3.05

    Standard Variable Rate

    1.30
    Bankwest Hero Saver

    Maximum Variable Rate

    2.65

    Standard Variable Rate

    0.01
    ANZ Progress Saver

    Maximum Variable Rate

    1.81

    Standard Variable Rate

    0.01

    Ask a Question

    You are about to post a question on finder.com.au

    • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
    • finder.com.au is a financial comparison and information service, not a bank or product provider
    • We cannot provide you with personal advice or recommendations
    • Your answer might already be waiting – check previous questions below to see if yours has already been asked

    Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
    Rates and fees mentioned in comments are correct at the time of publication.
    By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

    Ask a question
    feedback