Is it beneficial to have your credit card and debit card from the same bank?

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Dubai: If you have been dealing with an institution for a while, while there are benefits to staying loyal, are there any benefits, in terms of cost, when it comes to using a credit card from the same bank?

Familiarity is a clear advantage, with a clear understanding of your current bank’s services and policies. You might also know what to expect after visiting a few of the bank’s branches.

However, while staying with the same bank can be convenient, you might miss out on more competitive offers from other providers.

By expanding to other banks, you can find products with attractive introductory interest rate periods, sign-up bonuses, rewards, and travel benefits.

Main advantages of using both cards from the same bank

“Since you have an existing banking relationship with the bank, the spending limit (or credit limit) is usually set higher than if you were to take another bank’s credit card,” said banking analyst Rupesh Naish. and credit based in Dubai.

Reimbursing your credit card charges is quite simple when you deal with the same bank. You log in to online banking and you have the option to check your credit card balance and refund the full amount or the minimum amount or any other amount (greater than the minimum amount due).

“You can sign up for direct debit to pay your credit card dues. While it is possible to sign up for direct debits from other banks, it is easier to have them within the same bank,” Naish added.

Another key benefit is that if you already have a credit card with your current bank, opening another card with the same institution likely won’t give you access to balance transfers. If you open a card with another provider, you can move your balances to that card.

Can multiple accounts be linked to a single debit card?

It is possible to link and synchronize two or more deposit accounts with the same bank on a single debit card. But, like everything in personal finance, it all depends a lot on your bank, its rules, regulations, and capabilities.

There are two things to keep in mind: first, you won’t be able to link a debit card to a credit card account, even if it’s from the same bank. Second, a debit card from one bank cannot be linked to an account from another bank. You can use it at another bank’s ATM, but for a fee.

Banks offer more offers on credit cards than on debit cards.

Advantages of having a credit card and a debit card from different banks?

For most people, it is common to use credit cards for the bulk of their purchases, and it is obvious that using another bank has its advantages in terms of the scope of the varied benefits offered by different credit cards.

“When comparing credit cards with debit cards linked to the same bank account, it’s important to consider fees and benefits,” Naish added. “However, currently even the newer debit cards also offer more add-on features similar to credit cards, so either card cannot be deregistered at this time.

For example, choosing to have a credit card from another bank gives you better consumer protection against fraud than debit cards linked to a bank account.

“Now the downside of using cards from multiple banks is that each bank does things differently, like fees, minimum balance, with different logins,” Naish explained. “So it can be convenient to have one place to log in, but you’re giving up other things that may be more important.”

Why do banks offer more offers on credit cards than on debit cards?

Banks offer more offers on credit cards than on debit cards, mainly because the debit card is used against the credit balance of your account and there is no gain for the bank.

“When it comes to credit card, most banks charge 24-36% interest on the outstanding amount on top of the minimum payment required,” Naish explained.

“If you make the full payment that is due, the bank will not charge any interest, but if you choose to make only the minimum payment due, which is usually 5% of the amount due, the bank will charge the interest mentioned above. above on the remaining 95 percent of the outstanding amount.

People fall into the credit card trap of making purchases they can’t afford and then choosing to pay the minimum amount due, they pay huge interest to the bank, which is obviously a source income for the bank.

Why is it often recommended to use a credit card rather than a debit card?

Experts often point out that a credit card offers more security than a debit card. The problem with debit cards is that if someone were to hack into your account, they could essentially drain your bank account.

With a credit card, you do not pay directly. You are charged on a monthly basis and for anything that is not correct, you can dispute the charges with the credit card company. Also, with a credit card, there may be more valuable benefits for you, such as miles, cash back, or points.

atm-1524870_1920 Generic ATM

For most people, it’s common to use credit cards for the bulk of their purchases.

Key points to remember

While there’s no reason you shouldn’t get a credit card from the same bank as your debit card if you like their products and customer service, when looking for a credit card there is has a few factors to consider before deciding if you’ll stay with your current bank.

“Even if you’re happy with your current bank, compare cards from other providers before settling on your final choice,” Naish added. “It may eventually allow you to get a credit card that better suits your spending style.”

So while it’s not inherently bad to have multiple cards from the same bank, another reason experts believe it’s better to get cards from different banks is to have cards from different networks (e.g. Visa, MasterCard).

Indeed, a handful of retailers or stores only accept one or the other. A given bank may offer both, but with multiple banks it is easy to get two different card networks.

“Also, if the bank takes a negative action (for example, closing your credit card because you’ve been overdue in some way), it may affect the bank’s other account. same bank; if your accounts are at different banks, this is less likely to happen,” Naish added.

Plus, if you’re interested in promotional offers or just getting reward points, you have more choice by not being limited to the same bank.

“By using different banks, you may also discover variations in terms and functionality that you might not otherwise be aware of; essentially you become a better buyer because you are aware of the prices, practices, services, etc., of dealing with more than one bank,” Naish said.

Whether you choose a bank or a different bank for your cards, each credit entity you take a new card from will impact your credit score, whether it is from the same bank or multiple banks. So it doesn’t matter the overall impact on your financial health.

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