These dual cards look similar to regular debit or credit cards but they have been modified with technology. It has two chips on the face of the card; one chip that functions as a debit card (and linked to your savings bank account) and another chip that functions like a credit card. Both these chips are placed on the two opposite ends of the card.
Apart from two chips on the face of the card, there are two magnetic stripes on the back of the card. Depending on the mode of transaction (debit or credit) customer just need to present that particular side at the point of sale (POS) system to swipe or dip.
Source: Union Bank of India
It's like watching that Tata Sky commercial where Bollywood actor Aamir Khan, playing a dual role of a couple with half of him dressed as the husband and the other half as the wife, juggles on screen to depict a couple on the verge of a breakup because the wife wants Sky- a popular UK cable TV service while the husband insists on having the Tata brand. Eventually, the husband bursts laughing and reveal he was just kidding and that Tata and Sky have come together to offer the best of both the worlds.
The question is: How good is it an option to use such cards?
“These duo card gives convenience and flexibility to the customers. They need to carry one card for all their financial needs instead of two separate cards (i.e. debit and credit cards) and can travel light with just one plastic card in the wallet,” said Anil Ramachandran - EVP & Head, Marketing and Retail Unsecured Assets at IndusInd Bank.
These dual cards generate a single account statement at the end of the month. So, it helps customers to keep the track of expenses on credit and debit accounts using a single statement.
The reward points earned using debit and credit sides of the card are consolidated every month and accumulated by the bank. So, the customer can avail the benefits of this consolidated reward points while redeeming.
For instance, IndusInd bank customers earn 1 reward point for every Rs 150 spent on shopping using duo card. The reward points are for using either debit or credit side of the card. These cards also include offers across entertainment, travel and lifestyle targeting millennial customers.
Along with this card, the customers are covered for personal accident insurance. Union bank’s combo card offers Rs 4 lakh cover and IndusInd bank’s duo card offers Rs 2 lakh cover.
The Union bank of India charges Rs 200 as one-time issuance fee for combo card and no annual fee is payable by the customer. The IndusInd bank offers duo card in two variants named, plus and premier. For duo card, bank charges issuance fee of Rs 1500 for plus variant and Rs 3000 for premier. This one time charges are over and above annual fees of Rs 799.
IndusInd bank offers a lost card liability insurance cover for Rs 3 lakh to the customers on duo card. Liability insurance cover is generally offered by certain banks on selected variants of credit and debit cards offered. The procedure for a claim is, if you lose your card or if it gets stolen, you must report the incident to the bank immediately in order to deactivate your card and prevent fraud. Also, file first information report (FIR) with the police.
Liability on a lost or stolen card is payable by the bank on the expenditures (transactions) incurred during the period between the loss and your informing the bank.
Convenience or headache?
Combining the two cards into one may relieve you of having to carry multiple cards, but you have got to be extra careful before you use them.
Pune-based Manju Apte, 29, has a savings account with a bank offering this dual card. She was using debit and credit card of the same bank since April 2018. In November 2018, Apte applied for these dual card voluntarily with the bank since she was using two separate debit and credit cards of the same bank.
While using a dual card she felt it gives convenience to carry one card instead of multiple cards. She reset the same PIN for both debit and credit sides on these card. In January 2019, Apte ended up withdrawing Rs 15,000 cash using credit side instead of debit side using dual card due to her negligence.
“At first, while reviewing the monthly card statement I was confused as to why the bank charged Rs 375 as cash withdrawal charges for using debit side. Later, after inquiring with the bank representative I got to know that I had used credit side of the card by mistake. Hence, there were additional charges imposed on me by the bank,” recollects Apte.
The banks charge a 2.5 percent interest rate (subject to a minimum of Rs 300) for withdrawing cash using a credit card.
There is a high probability that customers can make a mistake while swiping or dipping the card at ATM or at POS system while transacting. Even a merchant/cashier at a shop could end up making a mistake while swiping the wrong side i.e. credit side instead of debit since EMV chips and magnetic stripes are placed at both the ends of the card.
“This issue can be alleviated by the customers with two different PINs for debit and credit side of the cards,” Gaurav Gupta, Co-founder and CEO of online aggregator of financial products and services MyLoanCare.in advised.
For instance, while using these dual cards you should keep a PIN 1357 (random PIN for illustration purpose) on the debit side and a separate PIN 2469 (random PIN for illustration purpose) on credit side.
Also, if this card is hacked or stolen, then you tend to lose out on credit limit and register loss from savings account since both debit and credit are combined into one card. It’s like losing two cards at one go; your credit limit as well as your savings account, both are at risk.
Such combo cards offer the convenience of having to carry minimal cards. The thing to remember here is that if you opt for a dual card, then both your credit and debit cards have to be from the same bank. Typically, we use debit cards of the bank where we have our savings account. But we choose a credit card from multiple providers, whoever offers us benefits that suit our lifestyles, such as an airlines miles card, a zero surcharge petrol card, a cashback credit card and so on.
Your choice, in this case, gets limited to the type of credit cards that your bank offers here.
But most importantly, there is a risk in carrying dual cards. You have to remember which side of the card to insert in the ATM slot at the time of withdrawing money or spending. Choose the wrong side by mistake, and you land up in the same soup as Pune’s Apte landed in a few months ago.
“These combo cards are not the right cards to have in your wallet because you as a customer may not be aware due to negligence whether you are spending money out of your savings bank account through debit card or you spending money out of your credit limit”, says Gupta.
The risks far outweigh the benefits that these cards offer. We suggest you avoid dual cards; stick to separate debit and credit cards.