Consumers can choose credit or debit on one card

When consumers choose to pay for a purchase with their debit card, they are usually asked, "Debit or credit?" But the choice doesn't make much of a difference, except in the way the consumer verifies it – by PIN or signature.

But now, one major U.S. financial institution is launching a card that will make the choice matter, according to a report from the Associated Press. Fifth Third Bank, which is well known throughout the Midwest and Southern U.S. and based in Cincinnati, Ohio, will soon launch its new Duo MasterCard, which allows consumers to load not only their debit card information onto the plastic, but also link it to a credit card account. This means that consumers who want more flexibility in their purchases will be able to take on credit card debt with it, and those who want to keep spending under control can still use it as a normal debit card.

To make a purchase using funds in their checking account, consumers would choose debit as normal, and the card can still be used at ATMs to withdraw money, the report said. However, they would no longer be allowed to sign for their debit transactions, and would have to use their PIN to verify the purchase. But to complete the transaction using their credit card account, the consumer would simply choose credit and sign for it as they would with any other such purchase. However, all online transactions using the card would only be able to be made as credit.

And because this card uses two separate accounts, consumers who use it would also receive separate monthly statements, the report said. Depending on the checking account, Fifth Third Bank charges between $7.50 and $15 for monthly fees, but these are often waived if consumers maintain certain minimum balances. Meanwhile, the credit card account can carry an ongoing interest rate of between 13 and 24 percent, but also comes with a 0 percent introductory rate for the first 12 months.

Meanwhile, MasterCard has not indicated whether it would offer this type of dual-purpose debit and credit card for any other banks, the report said.

This type of card may be useful for consumers who are looking to get out of debt but still need some flexibility in their purchasing power for emergencies.