Why is credit called "credit" when it's actually debit?
You go to the grocery store, and you slide your "debit" card, and the clerk asks, "credit or debit?" Well, if you choose debit, you enter your PIN and it comes out of your checking account right away. If you enter credit, you sign the slip and it comes out of your checking account right away. What's the difference?
In reality, the consumer's choice is not between credit and debit, but between debit and debit. The choice is either on-line (MAC), commonly referred to as "debit," or off-line (Visa Check Master Money) which is what will happen when the consumer chooses "credit."
Of course, it doesn't matter to consumers which button is pushedóthe end result is the same. But it does matter to the merchant because, as many GS readers know, the "credit" purchase will cost the merchant more than the "debit" purchase because the MAC (debit) transaction is cheaper. Maybe that's why there has been such a push for debit!
