You may have noticed this new kind of card being swiped at cash registers nation-wide. Sporting both an Interac and credit card lender logo, combined credit debit cards offer payment options for Canadian shoppers, both at home, online and internationally. These cards are touted as setting the next standard of convenience – increased access, security and rewards are some of the features offered. So, could this combo card streamline the current stack you lug around in your wallet? Why should you use one – especially if you’re already packing both credit and debit plastic?
The International Appeal
As any business flyer or vacationer abroad can attest, it can be a real challenge to forgo your credit card when traveling. For those looking to avoid racking up their balances, that means being subjected to travelers’ cheques, hitting up the money exchange counter (and paying the associated fees), or ATM hopping. Navigating the fees of cash withdrawal and running the risk of your bank freezing your funds is enough to ruin any vacation. This is where a credit debit card comes in – and the network it uses to process your transactions.
In Canada, all debit purchases are processed through the Interac network. Mastercard transactions are processed through the Maestro or Cirrus networks, and Visa through the Plus network. While Interac is limited to Canadian retailers, though, the credit card lender networks have roots worldwide – allowing Visa and Mastercard to be accepted virtually anywhere on the planet. Purchases made abroad with a credit debit card, while still debiting the account directly, will be processed on these international credit networks. That opens up your card use to almost any business type internationally – provided they accept your credit card lender. For purchases made on the Canuck side of the border, the card is used simply as a debit option, utilizing the Interac network as per usual.
The Credit Card Security Blanket
One of the biggest draws for credit card use (other than accessing more spending power) is the level of security provided for your transactions. Debit card use, while debt-risk free and instant, leaves users more vulnerable to fraud. Should a phisher get their hands on your pin and account, you could end up drained – and broke for days as the bank makes heads or tails of the situation. With credit debit, you’ll get the benefits of a chip card and monitored fraud protection.
Online Purchasing Power
Another area where credit debit cards shine is the world of online shopping. In addition to the aforementioned security options, it’ll also greatly broaden the number of retailers, both international and domestic, that were previously only accessible by credit card. This means you can directly debit purchases such as music downloads, set up bill payments, and even book hotel and plane tickets. A word of caution here, though – if you don’t intend to pay off larger purchases immediately, stick to a credit card for your reservation needs, as vendors may instantly tap your account.
Understanding the Fees and Exchange Rates
Another convenient aspect to using a credit debit card internationally is that any currency exchange is conducted automatically. This means, though, that you need to need to keep the monetary exchange rate top of mind at all times – or you could run out of funds a lot quicker than intended. CIBC states that all purchases made with its Advantage debit card are subject to the same exchange rates paid by the bank, plus 2.5 per cent. You may also be charged for processing fees on the credit lender’s network. While these transaction fees are often picked up by the retailer, international vendors may pass the cost down to you, so keeping an eye on those receipts and your balance – no matter where you are – is a must.