Should I select credit, cheque or savings?

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Should you press cheque, savings or credit when using your card to make a purchase? This depends on what card you're using. If you're using your debit card that's linked to just one bank account, it doesn't really matter which option you choose.

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 (this is the case most of the time).

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Compare debit cards below

Name	Contactless Payments	Instant Payments	ATM Withdrawal Fee	Monthly account fee
HSBC Everyday Global Account Finder Award	Google Pay, Apple Pay	PayID	$0	$0	Special offer: $100 cash bonus for new HSBC customers. Earn 2% cashback on tap and pay purchases (T&C's apply). Enjoy no minimum ongoing balance or transaction requirements and the flexibility to hold up to 10 currencies. Apple Pay and Google Pay available.	Go to site More Info	Compare	loading Fetching your data...
NAB Classic Banking	Google Pay, Apple Pay, Samsung Pay, Fitbit Pay, Garmin Pay	Osko, PayID	$0	$0	Enjoy convenient, unlimited access to your money. $0 monthly account fee. Tap and pay with your NAB Visa Debit card or your phone using Apple Pay, Google Pay, Samsung Pay or NAB Pay for Android. Temporarily block your card at the touch of a button if you lose it.	Go to site More Info	Compare	loading Fetching your data...
MyState Bank Glide Account	Google Pay, Apple Pay, Samsung Pay, Fitbit Pay, Garmin Pay	Osko, PayID	$0	$0	Simplify your everyday banking with these sleek digital features. $0 monthly account fee. Choose the way you pay with access to Google, Samsung and Apple Pay plus Fitbit Pay and Garmin Pay. Send and receive money in less than 60 seconds with PayID.	Go to site More Info	Compare	loading Fetching your data...
Virgin Money Go Account	Google Pay, Apple Pay, Samsung Pay	Osko, PayID	$0	$0	Special offer: Welcome bonus of 5,000 Virgin Money Points (T&Cs apply). $0 monthly account fee. A transaction account that gives you Virgin Money Points on your everyday spend, access to perks and rewards. Plus, earn a competitive bonus interest rate on your Virgin Money Boost savings account.	Go to site More Info	Compare	loading Fetching your data...
Suncorp Everyday Options Account	Google Pay, Apple Pay	Osko, PayID	$0	$0	Link up to 9 interest-earning sub accounts. $0 monthly account keeping fees. Earn interest on your linked sub accounts to help you save for individual goals, with no account fees to pay. Make contactless payments using Google Pay and Apple Pay.	Go to site More Info	Compare	loading Fetching your data...
Great Southern Bank Everyday Snap Account		Osko	$0	$0	Refund of international ATM withdrawal fees and international card transaction fees (conditions apply). $0 monthly account fee. Unlimited fee-free everyday transactions. Apple Pay, Google Pay and Samsung Pay available. Savings Top Up tool automatically transfers to linked savings account.	Go to site More Info	Compare	loading Fetching your data...
Citi Global Currency Account	Apple Pay, Samsung Pay	Osko, PayID	$0	$0	Earn up to 0.75% p.a. interest on your AUD balance. $0 monthly account fee. Enjoy one linked debit card to hold up to 10 currencies and receive foreign currencies for free.	Go to site More Info	Compare	loading Fetching your data...
Great Southern Bank Everyday Account		Osko	$0	$0	Enjoy flexible payment options and access to a wide network of ATMs. $0 monthly account fee. Access to Google, Samsung and Apple Pay. Enjoy fee-free cash withdrawals from 10,000+ ATMs across Australia.	Go to site More Info	Compare	loading Fetching your data...

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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.

Learn more about Chargebacks

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.

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Tim Falk

Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors.

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Should I select credit, cheque or savings?

If you're using your debit card, it generally doesn't make much difference whether you select credit, cheque or savings when making a transaction.

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