02 Feb 2019
#FinancialBytes: 5 features of debit-cum-credit cards you should know about
Credit cards and debit cards play an essential role in our lives and are among the most widely-used cashless payment methods because of the convenience they offer.
The concept of debit-cum-credit cards, an innovative banking product that offers features of both debit and credit cards, has been gaining popularity over the recent years.
Here are 5 features of debit-cum-credit cards you should know about.
A single card that has debit and credit card features
It works on the concept of overdraft benefit. Simply put, users enjoy overdraft facility on their debit card. One can use the card up to a pre-determined credit limit after exhausting the linked account balance.
Interest rates are lower than regular credit cards
Another advantage of debit-cum-credit cards is, the interest rate on utilized credit (overdrawn amount) is low compared to the high interest rates of regular credit cards.
While "debit card spends" don't attract any interest, there's still a drawback. Cardholders are required to pay interest on the credit for the entire period, starting from the date of usage, as it doesn't offer any interest-free period.
Special offers, reward points, insurance cover, and other benefits
Just like normal credit cards, the debit-cum-credit cards also come with other additional features like the accumulation of redeemable reward points on spends, insurance cover benefit to the cardholder, discounts, etc.
Some cards also offer exclusive discounts, deals, or offers on transactions at various merchants.
However, the benefits offered by these debit-cum-credit cards might vary from bank to bank.
#2: Cards have no joining or processing fees
Another good feature of the debit-cum-credit cards is that they usually come with no joining or processing fees. Card providers generally offer these cards for free with no initial charges. However, this varies from bank to bank and some might charge a nominal fee.
#4: No charges on ATM cash withdrawals
One of the best features of the debit-cum-credit card is that - unlike a regular credit card - no extra charges are applicable on cash withdrawals at ATMs as the card also acts as a debit card.