Debit or Credit? Hidden Fees Hold the Answer

"Will that be credit or debit?"

The seemingly innocuous question gets answered without thought at countless checkout lines. But consumers should think carefully the next time they use their debit cards at the checkout, because the wrong choice can cost $1.50 each time they swipe their cards. This may sound like peanuts, but it adds up. (And given the woes of the market and the economy, are you going to sneeze at peanuts?)

"If you have a debit card with a Visa or Mastercard logo, which button do you have to press in order to use it?" asks Richard Crone, vice president of financial services for Dove Consulting, a Boston-based strategy firm. "It's sort of a trick question. But you should probably still push credit."

Indeed, the fee you pay depends on how that debit-card purchase is processed. Sign the receipt as you would a credit-card purchase and you won't be charged a cent. Plus, you'll be able to take part of any incentives your card may offer, like cash back bonuses or frequent-flyer miles. But if you enter a PIN number, some banks will hit you with a service fee and you won't rack up any incentive bonuses.

"When they ask you credit or debit, they're really asking you how you want your card to be used," says Susan Craine, consumer associate for the New York Public Interest Research Group. "Some people might not know this. Personally, I was never given instructions on how to use my card when I first received it."