Yes, I understand that - but how can one card operate presumably two accounts? Are both account details loaded onto the card somehow? How do the mechanics work?
I'm sorry, I think I misunderstood what you were asking. My card is a bank-issued debit/credit card, so both my credit purchases and debit purchases are taken out of the same account. I haven't got a separate credit card (non bank issued credit only) in the US, so I don't know how those work as I've never had one (I am an American in Japan for 30+ years).
Thanks crella. I'm still not seeing it though. I don't understand how something you buy on your 'credit card' comes out of your current account, or the same account that you use your debit card for, or how one card can operate two accounts.
I think a 'credit card' (or at least a credit purchase) must be something different in the States, from reading this: http://banking.about.com/od/checkingaccounts/a/debitvscredit.htm
In the UK, a 'credit card' is totally separate to your current (what you guys would call a 'checking') account. It is issued by a credit card company and they give you a credit limit of say, £3000. You can then spend anything up to £3000 on that card. You have to apply for one and they credit score you before they approve your application. It's absolutely nothing to do with your current account, apart from the fact that you'll have a direct debit set up on your current account to pay the credit card bill once a month. You get a bill or a statement every month and you can either make the minimum payment or pay it off in full. Nothing comes out of your bank account until the date you 'pay' your credit card bill.
Sorry if I'm being dense. I just do not understand this. I think they must be totally different things to what we have here hence the confusion.
From a purely practical standpoint I would not like to have one card that does everything (if that's what these things are?). If I lose my debit card I can still use my credit card until a replacement debit card arrives so I'm not stuck without money.
OK - a debit card allows you to use the card in circumstances where credit is the only available option for paying - ie. online. BUT it doesn't actually HAVE a line of credit - it makes the payment via the credit network (eg VISA or Mastercard) but still debits the money from your account.
If you only had a regular EFTPOS only card, you can't use it to make purchases online (without Paypal or similar).
You can use a debit card via the credit network on an EFTPOS machine too - just by pressing hte credit button. There's no real benefit in doing so though unless there's some kind of fee that could be avoided. But you could if you wanted to.
So what's a credit card, then?
Are credit cards not the same thing in the US as they are here?
Here, it's a line of credit.
I have a Barclaycard (which is a credit card issued by Barclays) with something like a £2.5k credit limit. I also have a bank account with Lloyds Bank, with which I have an associated debit card. If I want to buy something and pay for it straight away, I pay with my Lloyds debit card and the money comes straight out of my bank account (sometimes it can take a couple of days). If I want to buy something and not pay for it straight away, I 'put it on my credit card'.
Every month I get a bill from Barclaycard listing the transactions I've made on the credit card that month and what my overall balance (ie, what I owe Barclaycard) is. So, I may have had a balance of £1000 on there and made another £500 worth of purchases this month so now I owe them £1500. I can either make the minimum payment they ask for on my credit card statement, or pay the balance in full (or any amount I want to pay, actaully, as long as it's more than the minimum payment). I also have a direct debit set up on my Lloyds bank account to pay my credit card's minimum payment automatically every month so I never get any late fees.
To determine which account I buy things with I use *either* my debit card or my credit card at the till. There's no 'debit or credit' option. It's impossible because the accounts are completely separate, with separate institutions. Things that you put on your credit card don't come out of your bank account. They're added to the outstanding balance on your credit card account, which is then paid off at a later date. This is why I think we must be talking about completely different things and that a 'credit purchase' isn't the same thing as 'putting something on your credit card' would be here.
It's confusing the ehell out of me though.