Father
Professional
- Messages
- 2,602
- Reaction score
- 831
- Points
- 113
We understand the types of payment cards: what is the difference between a debit card and a credit card, an international card from a local one, an express card from a classic one, what are prepaid cards for and who is suitable for an overdraft.
According to the bank cards, like electronic wallets, are electronic means of payment. In other words, an alternative to cash.
What are the payment cards?
There is no official classification of payment cards, but they can be divided into three groups:
By type of payment system:
International
International payment systems bring together participating banks from different countries - accordingly, such cards can be used to pay abroad. The card can be linked to one or several bank accounts. Accounts can be in rubles, dollars or euros, which is especially important for traveling abroad. There are also co-badging cards, which usually combine two payment systems.
Local
Everything is simple here: these are maps that work within the same country.
By type of operations:
Debit
The most important difference between a debit card and a credit card is that a debit card gives you access to the money that is in your account. Any operations (non-cash payment, cash withdrawal) are possible only within the limits of your account balance.
There are also so-called virtual cards. They have props, but no plastic media. Some of them can be used exclusively to pay for purchases on the Internet. They cannot be used to pay in a supermarket or withdraw cash from an ATM.
Other virtual cards, also called digital cards, are full analogs of conventional plastic cards. They can be downloaded to a smartphone that supports one of the contactless payment systems, such as ApplePay, GooglePay or MirPay, and used like regular cards. This will allow using the gadget to pay at points of sale or withdraw money from ATMs that support payment and withdrawal functions without a card.
Virtual cards keep your bank details private, making shopping safer.
Salary cards used by the employer to transfer money to employees are usually debit cards. But it happens that the bank offers to issue a so-called overdraft.
Debit cards with overdraft
The word overdraft from English translates as "overrun, overdrive." An overdraft is essentially the same loan, the difference is in the conditions for obtaining it. Usually banks provide overdrafts to their reliable clients, to whose account money is regularly received (for example, salary). You do not have to apply for a separate credit card - the ability to receive bank money on credit (the amount of the overdraft is determined by the bank) will be added to your debit card, which you can spend and then return. However, the interest for using an overdraft is usually higher than for a regular loan. It is extremely unprofitable to go into "overspending" on a regular basis, without keeping within the grace period (grace period for payment of interest on a loan, when interest is not charged or is charged in an amount that is lower than the base rate).
Credit
A credit card, unlike a debit card, gives access not to your money, but to the bank's money. You borrow money from the bank and you have to pay for it. You need to carefully study the conditions for granting a loan in order to use the card with the maximum benefit for yourself. Study how interest is calculated, whether there is a grace period and how long it lasts, whether you have to pay for the annual service of a credit card, what is the interest rate for cash withdrawals. It is more profitable to pay with credit cards, rather than withdraw cash from an ATM - according to the terms of most banks, you will have to pay for cash withdrawals.
And remember that bank loan programs are not charity and not an easy way to get money. Both a credit card and an overdraft may be convenient for you, but you need to use them wisely: assess your capabilities, calculate the cost of a loan (maybe it will be more profitable for you to save rather than borrow?), Carefully read the terms of the agreement and avoid delays in order to avoid unexpected trouble.
Prepaid card
A prepaid card is essentially an "electronic wallet" in which you can put a certain amount of money. The bank issues a prepaid card to the client, but does not open a bank account. The client refills the card and can use it. A prepaid card can be named or unnamed - the balance on the card depends on it. As a rule, banks set a small limit on unnamed cards (no more than $ 250), but they can be obtained without showing a passport and donated to someone. On name cards, the limit is usually higher.
Such cards are convenient because they are issued instantly. But they also have disadvantages: the money that you deposit on the card is not subject to compulsory insurance under the law on deposit insurance. You won't be able to get a loan for such a card either - only the client's money can be stored on a prepaid card.
Prepaid cards are issued exclusively by banks - do not confuse prepaid cards with gift or bonus cards. Many companies issue gift cards with a specific amount of money. For example, you can buy a card with a face value of $ 100 in a store with goods for children and present it to young parents. Those will only have to come to the store and select goods for this amount. And if you give them a prepaid bank card, they can spend money not only in the children's store, but anywhere. In this case, the prepaid card will be a more presentable replacement for the usual envelope with money.
When choosing a prepaid card, carefully study the agreement - in a number of banks there may be a commission or an activation fee.
By the time of registration:
Typically, classic credit and debit cards are processed within 2-5 business days. But if you need to get a card urgently, keep in mind that many banks have this option as well. Both debit and credit cards can be issued instantly and simply - banks have different programs, the service may be paid.
Many banks offer unnamed instant cards - both debit and credit - that are issued literally 10 minutes after contacting. But remember that the range of possibilities for unnamed cards is limited. For example, express credit cards have a very low money limit and a high interest for use.
According to the bank cards, like electronic wallets, are electronic means of payment. In other words, an alternative to cash.
What are the payment cards?
There is no official classification of payment cards, but they can be divided into three groups:
- By the type of payment system.
- By the type of operations that can be performed.
- By the time the card was issued.
By type of payment system:
- International.
- Local.
International
International payment systems bring together participating banks from different countries - accordingly, such cards can be used to pay abroad. The card can be linked to one or several bank accounts. Accounts can be in rubles, dollars or euros, which is especially important for traveling abroad. There are also co-badging cards, which usually combine two payment systems.
Local
Everything is simple here: these are maps that work within the same country.
By type of operations:
- Debit cards.
- Overdraft cards.
- Credit cards.
- Prepaid cards.
Debit
The most important difference between a debit card and a credit card is that a debit card gives you access to the money that is in your account. Any operations (non-cash payment, cash withdrawal) are possible only within the limits of your account balance.
There are also so-called virtual cards. They have props, but no plastic media. Some of them can be used exclusively to pay for purchases on the Internet. They cannot be used to pay in a supermarket or withdraw cash from an ATM.
Other virtual cards, also called digital cards, are full analogs of conventional plastic cards. They can be downloaded to a smartphone that supports one of the contactless payment systems, such as ApplePay, GooglePay or MirPay, and used like regular cards. This will allow using the gadget to pay at points of sale or withdraw money from ATMs that support payment and withdrawal functions without a card.
Virtual cards keep your bank details private, making shopping safer.
Salary cards used by the employer to transfer money to employees are usually debit cards. But it happens that the bank offers to issue a so-called overdraft.
Debit cards with overdraft
The word overdraft from English translates as "overrun, overdrive." An overdraft is essentially the same loan, the difference is in the conditions for obtaining it. Usually banks provide overdrafts to their reliable clients, to whose account money is regularly received (for example, salary). You do not have to apply for a separate credit card - the ability to receive bank money on credit (the amount of the overdraft is determined by the bank) will be added to your debit card, which you can spend and then return. However, the interest for using an overdraft is usually higher than for a regular loan. It is extremely unprofitable to go into "overspending" on a regular basis, without keeping within the grace period (grace period for payment of interest on a loan, when interest is not charged or is charged in an amount that is lower than the base rate).
Credit
A credit card, unlike a debit card, gives access not to your money, but to the bank's money. You borrow money from the bank and you have to pay for it. You need to carefully study the conditions for granting a loan in order to use the card with the maximum benefit for yourself. Study how interest is calculated, whether there is a grace period and how long it lasts, whether you have to pay for the annual service of a credit card, what is the interest rate for cash withdrawals. It is more profitable to pay with credit cards, rather than withdraw cash from an ATM - according to the terms of most banks, you will have to pay for cash withdrawals.
And remember that bank loan programs are not charity and not an easy way to get money. Both a credit card and an overdraft may be convenient for you, but you need to use them wisely: assess your capabilities, calculate the cost of a loan (maybe it will be more profitable for you to save rather than borrow?), Carefully read the terms of the agreement and avoid delays in order to avoid unexpected trouble.
Prepaid card
A prepaid card is essentially an "electronic wallet" in which you can put a certain amount of money. The bank issues a prepaid card to the client, but does not open a bank account. The client refills the card and can use it. A prepaid card can be named or unnamed - the balance on the card depends on it. As a rule, banks set a small limit on unnamed cards (no more than $ 250), but they can be obtained without showing a passport and donated to someone. On name cards, the limit is usually higher.
Such cards are convenient because they are issued instantly. But they also have disadvantages: the money that you deposit on the card is not subject to compulsory insurance under the law on deposit insurance. You won't be able to get a loan for such a card either - only the client's money can be stored on a prepaid card.
Prepaid cards are issued exclusively by banks - do not confuse prepaid cards with gift or bonus cards. Many companies issue gift cards with a specific amount of money. For example, you can buy a card with a face value of $ 100 in a store with goods for children and present it to young parents. Those will only have to come to the store and select goods for this amount. And if you give them a prepaid bank card, they can spend money not only in the children's store, but anywhere. In this case, the prepaid card will be a more presentable replacement for the usual envelope with money.
When choosing a prepaid card, carefully study the agreement - in a number of banks there may be a commission or an activation fee.
By the time of registration:
- Express cards (instant).
- Classic.
Typically, classic credit and debit cards are processed within 2-5 business days. But if you need to get a card urgently, keep in mind that many banks have this option as well. Both debit and credit cards can be issued instantly and simply - banks have different programs, the service may be paid.
Many banks offer unnamed instant cards - both debit and credit - that are issued literally 10 minutes after contacting. But remember that the range of possibilities for unnamed cards is limited. For example, express credit cards have a very low money limit and a high interest for use.
