The way you use your debit card can be the difference between paying and avoiding surcharges.

While card surcharging is legally allowed for both debit cards and credit cards, some businesses have chosen to only apply an additional fee to credit transactions.

But both MasterCard and Visa debit cards could still attract this cost if they are processed as “credit” transactions on an EFTPOS machine.

Unlike other debit card fees, which are set and charged by your issuer, surcharges are established by merchants as a way of balancing out the fees they pay to process cards.

These costs, however, are at their most expensive for transactions processed as credit – which you can still select at the checkout when you use a MasterCard or Visa debit card.

But while that worked in the past, new contactless payments have added to the complications – as one Victorian pensioner recently found out when shopping at Aldi.

As News Limited’s local paper the Knox Leader reported, 72-year-old Barry Harvey paid for his groceries using MasterCard’s PayPass tap-and-go option before an additional 0.5% credit card surcharge was added onto his bill.

Aldi normally only charges the fee for actual credit cards – and has signs notifying customers of this fee – but when Harvey raised the issue with staff he was told that contactless payments defaulted to the credit processing system.

“They should explain it (in the signage), because then you get the option of using the tap-and-go and paying the surcharge, or putting it (the card) in the slot like you normally would.”

Coverage of the incident means more people now know about Aldi’s surcharge policy and how it could affect debit card transactions, but the grocery and variety store is not the only merchant charging more for credit than debit.

Data from the Reserve Bank of Australia shows that surcharges were applied to 9% of all card transactions in the 2012-13 financial year: 7% for credit cards and just 2% for debit cards.

This breakdown of stats suggests many other services waive fees for standard debit card transactions but could apply the surcharge by default for tap-and-go payments.

Why are tap-and-go payments different?

In order to make more informed decisions about how you use your credit card, it is important to understand all your options and how they can change.

MasterCard and Visa offer tap-and-go payments – also known as PayPass and PayWave – using the same processing system these two companies have set up for credit card transactions. This system costs more for merchants to use, which is why moderate surcharges are allowed in the first place.

Debit card transactions that use the “cheque” or “savings” option at a payment terminal, however, are processed through the EFTPOS system, which does not cost as much.

As a way of compromising on surcharges, some merchants will charge a fee for credit card payments but not debit card payments. What they may not realise, however, is that tap-and-go transactions have to be processed as “credit”, which means they have to notify customers of the surcharge for this option even if a debit card is used.

The newness of contactless cards also means that the only real way around the extra cost is to swipe or insert your card at the checkout, avoiding the contactless option.

But just as MasterCard and Visa worked hard to reduce and limit credit card surcharges in the past, they are committed to promoting PayPass and PayWave respectively. That means there is potential for them to try and find ways to keep debit card costs down in the future.