Debit-credit hybrid cards: the best of both worlds?
The main difference between debit and credit cards is that debit card payments are charged to your account immediately, while credit card payments are charged at a later date depending on the payment method. Hybrid cards combine both payment functionalities in a single card.
Mixed cards have been on the market for some time, functioning mainly as credit cards but also allowing cash withdrawals at ATMs free of charge. Hybrid cards go a step further, functioning either as debit or credits card for any transaction. Remember, there are two distinct forms of credit card payment: deferred payments, in which purchases are typically charged interest free at the end of the month, and revolving credit payments, which bear interest.
How do I choose the form of payment? With some cards, contactless payments will automatically be debit transactions, while entering the card into the point-of-sale terminal will result in a credit payment. With others, the user can configure the default form of payment through the bank’s app. In a further type of card, each side is used for a different payment method.
- No need to carry two different cards with you.
- You choose which payment method to use, giving you more effective control over your finances.
- Wider acceptance than debit cards: the credit option means they can also be used where credit card payments are required (e.g. car rental companies).
Things to remember:
- Not all hybrid cards let you freely change the form of payment.
- Find out the default payment method before using the card. Change it if you see fit.
- Make sure you know which form of payment will be processed before using it. That way you will only pay interest when you mean to.
- Be sure to find out what charges will be incurred for using the card and whether these differ between debit and credit card usage.
And remember, to prevent fraud it is very important that you set credit limits according to your needs and control your debit card spending limits, as well as to check both your credit limit and balance frequently.