Types of bank cards: one for each need
The types of bank cards are generally common knowledge for most citizens of contemporary cities. Our world has been rapidly transforming into one linked almost exclusively to the digital realm. Our relationships, properties, educational institutions, entertainment, and bureaucratic processes have become entirely online. Our payment methods are no exception.
Bank cards have a long history that dates back to the first decades of the last century, from the hands of giants such as Western Union, to definitively explode as forms of payment in the 50s of the same century under American Express and Mastercard. The diversification of the cards in different models has been taking place over the decades, adapting to the needs of the users. Let's examine some of these models.
If you have a particular interest in everything related to financial management through the banking system, you might also find it helpful to visit this other article on our website dedicated to learning how to invest in banks . Follow the link!
Credit card
This type of card is based on a system of loans that must then be repaid to the bank within certain terms. Each use of this card implies the use of money provided by the bank from its own coffers. The payment to the establishment or the platform is immediate, but is followed by a debt that is usually paid monthly.
Credit cards typically come in different models with varying credit limits, such as gold, silver, or black cards. However, the limit can also be determined by the user's credit history, including their ability to pay and their payment record. If you'd like to learn more about using credit cards responsibly, you can read about how to manage a credit card properly. It's also important to understand the consequences of credit card debt to avoid financial problems. Additionally, you can learn more about bank loans and how they affect credit card usage.
Debit
Unlike credit cards, debit cards use the customer's own savings to pay immediately. It is a more appropriate system for people who lack cash at the moment or find it more comfortable to use digital transactions. The payment limit, therefore, is not marked by models or credit history, but by the amount saved in the account itself. Also these cards can be used to withdraw funds from an ATM.
deferred payment card
Deferred payment cards are also credit cards but with greater flexibility in the cancellation of subsequent debt. In this case, payments will be made periodically according to different formats according to the capacities and needs of the client, not according to fixed debts as in a credit card to use. With each payment, this amount will be restored as a credit available for new expenses.
Prepaid card
Also, known as a digital wallet, it allows small payments to be made according to an amount previously delivered to the entity that provides the platform. When the payment is made it will be possible to recharge the deposit for new payments. It is the reduced version of a debit system for small daily expenses.
contactless card
This card differs from the others only in its unique technology, without the usual contactless insertion inside the plastic. It doesn't need to be inserted anywhere; just hold it close to the device to make the payment by entering the PIN. Likewise, cash withdrawals from ATMs can be made without inserting the card into the machine, simply by holding the plastic card up to the reader provided for that purpose. Transactions are thus made more modern and dynamic, well adapted to our fast-paced world.
The following video provides a very simple explanation for beginners of some of the most commonly used bank cards. This concludes our brief article on the different types of bank cards and their main features. Until next time, and good luck with your transactions.
