Is it safe to have a debit card and credit card on the same bank?

Question

In the scenario of a dispute with a charge on your credit card, if worse comes to worse - can the bank pull funds from your debit card? (In the case of US and Philippine banks). Asking this because I have relatives from both countries.

Answer 1

There can be benefits with having multiple products from one financial institution.

• Better rates. The more lines of business the better the CD rate, or the lower the auto loan rate.
• Seamless transfers of money. You don't have to debate if is it better to push or to pull the payments.
• One username/password for everything.
• if there is a problem you only have to talk to one company.

There can be problems with multiple products from one financial institution:

• One user/name password. If it is compromised, then multiple parts of your financial system are at risk.
• If there is a computer update going on then multiple items are impacted.
• The seamless transfers could make it possible to drain your accounts easier.

I have family members that have a credit card from their credit union. They have not had any problems. One did have fraudulent charges on their card, and at no time did the card side of the business try and pull the disputed funds. You will have to review the paperwork from the bank/credit card to verify how they handle disputes.

Answer 2

In the US, bank accounts (typically with an associated debit card that can be used to pay for purchases, or to withdraw cash from the bank account at an ATM) and credit cards are handled by two different subdivisions of the bank. Typically, credit card payments are not made via a "charge" to the debit card associated with your bank account; they are paid by

• paper checks sent to the credit card company (either by the bank account owner personally or by the bank following instructions from the bank account holder),

or

• an ACH transfer initiated by the bank upon receipt of instructions from the bank account owner (usually there is a fee for this),

or

• by ACH transfer initiated by the credit card company following instructions from the credit card holder. These last can either be issued by the card holder each time the card holder wishes to make a payment (e.g. "On date mm/dd/yyyy, withdraw $ddd.cc via ACH from my bank account xxxx in Bank bbbb and apply this money as a payment to my account", or the card holder might choose to set up automatic payments such as "On the due date of the card statement, withdraw the full amount due/current account balance/minimum required payment/other fixed dollar amount from my bank account xxxx in Bank bbbb and apply it to my card account." (Some choices will result in finance charges on your next card statement).

But under no circumstances can the credit card division of the bank say, "Hey, avg9957 owes us $www.zz and since he has a bank account xxxx with us, let's just take the money from avg9957's bank account." They must wait for you to tell them to take money from your bank account, or follow your standing instructions on when and how much money to take from your account.

All this might work completely differently in the Philippines, but I doubt that there are major differences.