Fidelity Bank advises customers on debit, credit card usage

By Adebola Muili

Fidelity Bank Plc has advised customers to consider their financial position, spending habits and repayment capacity when deciding whether to use debit or credit cards for different transactions.

The bank gave the advice in a consumer education guide on card usage, explaining that although both cards could be used to make payments, they operate differently and create different financial obligations for users.

According to the bank, a debit card draws funds directly from the customer’s linked bank account, meaning that payments are made from money already available to the account holder.

A credit card, on the other hand, provides access to an approved credit facility, with the amount spent expected to be repaid according to the applicable terms.

The bank said the distinction was important because the choice of card could affect a customer’s budgeting, available funds, repayment obligations and the eventual cost of a transaction.

“When you pay with a debit card, you are spending money already available in your bank account. When you use a credit card, you are accessing an approved borrowing facility that must be repaid,” Fidelity Bank stated.

The bank said debit cards could be useful for routine spending such as groceries, fuel, utility bills, subscriptions and meals, as payments are deducted from available funds.

It noted that Fidelity Bank offers debit card options, including Naira and Dollar cards, advising customers to consider the currency of transactions, where the card would be used and the applicable terms before selecting an option.

For credit-card users, the bank stressed the importance of having a realistic repayment plan before committing to expenditure.

It explained that credit cards could provide flexibility where a customer’s financial obligation arose before expected income became available, citing travel expenses such as flight and hotel bookings as examples.

However, the bank cautioned customers against treating an approved credit limit as an indication of how much they could afford to spend.

“An available credit limit shows how much the cardholder is permitted to borrow. It does not automatically determine how much the customer can comfortably afford to spend,” it said.

Fidelity Bank also urged customers to consider the interest rate, applicable fees, repayment date and minimum payment requirements before using a credit card.

It warned that paying only the minimum amount could leave an outstanding balance on which interest may continue to accrue in accordance with the card’s terms.

The bank advised customers to determine how an expenditure would be repaid and when the repayment would be made, adding that even relatively small transactions could accumulate into a substantial outstanding balance if not monitored.

On card usage during international travel, Fidelity Bank said customers should consider factors including currency, acceptance of the card at their destination, frequency of travel, repayment capacity and available benefits.

It explained that while a debit card gives customers access to funds already available in their accounts, a credit card provides access to an approved borrowing facility.

The bank said customers considering premium cards should also assess whether the benefits attached to such products correspond with their actual spending and travel patterns.

Fidelity Bank’s premium card offerings include the Visa Signature Debit Card and Visa Infinite Credit Card.

According to the bank, the Visa Signature Debit Card operates from the customer’s available funds, while the Visa Infinite Credit Card provides an approved credit facility.

The bank said the Visa Infinite Credit Card comes with benefits including complimentary access to more than 850 LoungeKey lounges for the cardholder and one guest per visit, concierge services, benefits at more than 900 hotels, multi-trip travel insurance and discounted personal fast-track services at more than 380 international airports.

It advised customers to consider eligibility requirements and applicable terms when assessing the value of such benefits.

Fidelity Bank further stated that eligible customers could request its debit cards through the Fidelity Mobile App, while those interested in credit cards or its premium card offerings could visit a branch or contact a relationship manager for information on eligibility, fees, repayment terms and benefits.

The bank urged prospective cardholders to review transaction limits, charges, currency, repayment obligations and other applicable conditions before applying for or using a card.

It said the decision on which card to use should ultimately be based on the nature of the expense and the customer’s ability to meet the associated financial obligation.

The bank stressed that understanding how a payment would affect available funds immediately, as well as any obligation that would remain after the transaction, was central to responsible card usage.