Brainstorming: Homebrew "credit" card?
In response to another question (about how to make credit cards pay interest on any positive balance), I came up with an odd combination: Get an account with both a debit card and a linked overdraft-line-of-credit loan. This seems to have an interesting, if odd, mix of characteristics:
This would pay interest on positive balances (though minimal, these days).
It would probably have a lower loan interest rate than most credit cards (depending on what security you use to guarantee it).
It wouldn't have a "grace period", but you could get something resembling that by maintaining a buffer balance.
You wouldn't get a credit-card-style detailed monthly statement; the account statement(s) would carry some but not all of that info.
As of last time I checked, debit cards still didn't have all the protections of credit cards -- no chargeback mechanism, never mind all the add-ons some cards offer like "extended warranties".
... Assuming a bank was OK with this setup, what other advantages and disadvantages would this have? How close does it really come to being a non-credit-card credit-card? Is it a stupid idea, brilliant, or brilliantly stupid?
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I can't think of a single advantage to this scheme over having an interest-bearing checking account and a traditional credit card. However, there is a big disadvantage that you missed.
Overdraft protection typically comes with a per-transaction fee for every overdrawn transaction. With most banks, this fee is at least .
Even if you find a bank that has no overdraft fee, you are left with the fact that you are paying interest from day one and have gained no advantages over a traditional credit card.
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