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Credit, cheque or savings explained

By Greater Bank

Cheque savings credit image

These days, paying for something is often as simple as tapping your Visa card. But when a purchase requires you to insert your card and enter your PIN, you may be asked to choose which account to use.

If you’re using a Visa Credit card, the choice is usually straightforward. But with a Visa Debit card, you’ll often see cheque, savings, and credit appear on the screen.

So what do these options mean, and which one should you choose?

Cheque, savings or credit?

Each merchant terminal in Australia when making a purchase has three buttons on it when it comes to account selection. Here’s what each one means:

  • Credit – This option is available when you’re using a credit or debit card linked to a payment scheme such as Visa or Mastercard. It’s the default for contactless payments, as well as for online and phone purchases. When using a Visa debit card and inserting your card, you’ll usually be prompted to choose between credit or cheque/savings. Selecting credit will still draw funds from your linked account – it doesn’t mean you’re borrowing money. With a Visa credit card, the credit option is selected automatically and uses the available credit on your account. Transactions made using the credit option may initially appear as pending on your account. During this time, your account balance and available balance may differ until the transaction is fully processed. This typically takes between two and five days, depending on the merchant.

  • Cheque – This option appears when you insert your debit card to make a purchase. Selecting cheque means the funds are taken directly from your everyday account, and the transaction is processed straight away. Because the payment is completed immediately, your account balance and available balance will usually match, unless you have other pending transactions or deposits that are still being processed. Depending on your account, transaction fees may apply when using this option.

  • Savings – This option appears when your debit card is linked to more than one account. For example, if your card is connected to both an everyday account and a savings account, you’ll be prompted to choose between cheque or savings when you insert your card to make a purchase. Selecting savings means the payment will be taken directly from your savings account. Depending on your account, transaction fees may apply when using this option.

Pros and cons of selecting credit, cheque or savings

Option Pros Cons
Selecting Credt

  • Aligns with the default option for contactless payments

  • Can be used anytime, including online, over the phone and in-store

  • Often avoids transaction fees, depending on your account and the merchant

  • Includes added security features and transaction monitoring from card networks

  • Widely accepted wherever Visa or MasterCard is supported, including internationally. 

  • Some merchants may apply a surcharge when selecting credit

  • A minimum spend may apply at some terminals

  • If using a credit card, interest may apply if the balance isn’t paid in full each month

  • Transactions may appear as pending until fully processed, which can temporarily affect your available balance.
Selecting Cheque/Savings

  • Payments are processed immediately from your account

  • Uses your own money, so no interest applies

  • Helps avoid building up debt, as you can only spend what’s available.

  • If there aren’t enough funds in the account, the transaction may be declined

  • Transaction fees may apply, depending on your account

  • Only available when inserting your card in-store

  • Not all debit cards support multiple linked accounts

  • Does not include the same level of purchase protection or dispute support as selecting credit.

Choosing the right account for the way you spend can make a real difference. Different accounts come with different fee structures, often based on the number and type of transactions you make each month.

Some everyday accounts, like our Access account, offer unlimited transactions, which can help reduce or avoid transaction fees altogether. Having an everyday account with no transaction fees can be a simple way to keep more of your money over time.

Taking the time to research and compare everyday transaction accounts can help you find an option that suits your spending habits and supports your overall financial wellbeing.

This article is intended to provide general information of an educational nature only. This information has been prepared without taking into account your objectives, financial situation or needs. Therefore, before acting on this information, you should consider its appropriateness having regard to these matters and the product terms and conditions. Terms, conditions, fees, charges and credit criteria apply. Information in this article is current as at the date of publication.

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