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A lot has been said and written about bank cards, but we still see how customers confuse debit cards with credit cards, are biased towards prepaid "plastic" and have absolutely no idea why virtual cards are needed. Today's article is intended for those who want to sort out the types of bank cards once and for all and find out which one is intended for what.
Article content
1. Bank card – what is it, and what is the essence of its work
2. Main types of bank cards
3. Debit cards
4. Overdraft cards
5. Credit cards
6. Prepaid cards
7. Dividing cards by area of use
8. Dividing cards by payment systems
9. Dividing cards by prestige level
10. Conclusions
Bank card – what it is, and what is the essence of its work
In order to talk about the types of bank cards, first we will determine what they are. Many plastic cardholders mistakenly believe that a card and a bank account are one and the same thing. This leads to many common misconceptions – for example, that the loss of the card leads to the loss of funds on it. However, this is not the case at all.
In fact, a bank card is just a payment instrument. By itself, it is a piece of plastic, and only "linking" to the customer's bank account allows you to use the card to dispose of your money. Of course, the loss, blocking or damage of the card does not affect the status of the account (of course, if it with other data did not fall into the hands of scammers who can cash out your money).
You can link almost any of the existing card types to the same account – it all depends only on the bank's tariffs and capabilities, as well as the client's own wishes. So let's talk about what types of "plastic" can be produced today, and how they differ from each other.
Main types of bank cards
Despite the apparent variety of bank cards that financial institutions offer their customers today, they all have similar characteristics and varieties in the database. The difference is only in the rates, commissions, additional services offered and bonuses – but before comparing the financial benefits of cards from different banks, you need to decide on the type of" plastic " that best suits you. As a rule, you can divide cards by several parameters:
By the owner of funds on the account – debit, credit, overdraft, prepaid;
By territory of use – local, international, intra-bank, virtual;
By payment system-Visa, MasterCard, Zolotaya Korona, American Express, etc.
By customer loyalty level and service volume – electronic, standard, gold, platinum, etc.
By the method of data storage – chip, with magnetic tape, combined.
The combination of different parameters from this list gives the huge range of "plastic" that can be seen today in advertising offers of banks. But it is precisely this abundance that leads to confusion for future cardholders – how to choose the right type and not make a mistake. Let's tell you more about the most popular categories of banking "plastic".
Debit cards
Debit cards are "plastic" linked to a current account deposit. This is the most common type of bank card – all salary," pension", and settlement cards belong to this type.
The main feature of debit cards is that the client has the right to dispose exclusively of money placed in advance by himself in a bank account. If this amount has already been spent, it is impossible to withdraw funds from the card until the next deposit. Here are some other characteristics of debit limit cards:
Such a card can be "linked" to a salary account, a deposit account "on demand", a deposit account with the possibility of partial withdrawal of funds, an account of accrued interest;
You can issue a debit card for a teenager from 14 to 18 years old (with parental consent); for children from 6 to 14 years old, you can issue an additional card to the parent card with limited transactions on it. Individuals over the age of 18 may apply for debit cards themselves.
An application for issuing a debit card is considered as soon as possible (a few minutes), as it does not require additional permissions and checks. Depending on the type and region of the card itself, it can be issued instantly or take several weeks.
To issue a debit card, you only need a passport and the client's personal presence, and no additional documents are required.;
As a rule, debit cards do not have upper and lower limits on the balance – the client can either reset the account or place unlimited amounts on it;
Funds on card accounts are protected by the deposit insurance system (with a maximum refund amount of RUB 1.4 million);
A certain small percentage may be charged on the balance of funds (usually the average monthly amount on the account is considered);
You can use a debit card to pay in cash or non-cash: make payments on the Internet and through an online merchant profile, withdraw money from ATMs, and pay for goods and services at payment terminals.
A debit card is a convenient payment instrument that is issued to a current bank account. With its help, you can have access to your funds around the clock and not depend on the opening hours of bank branches.
In addition, the functionality of debit cards can be expanded – for example, many banks offer to open a credit limit (overdraft) for them.
Overdraft cards
One of the most unclaimed products of banks is overdraft cards. Many holders of "plastic" simply do not understand the mechanism of operation of such a credit limit, and therefore refrain from using it. Let's tell you more about these cards.
So, an overdraft is lending to a debit account. In fact, a client who has entered into an overdraft agreement gets the right to pay with the card in excess of the balance available on the account. Key features of an open overdraft card:
The credit limit is not open to everyone – banks have a certain list of requirements for the client (age, credit history, financial situation, work experience, etc.);
The main requirement when opening a limit is stable receipts to the card account. That is why overdrafts are most often offered on salary and pension cards. Compliance with this requirement "covers" the violation of others – for example, the client may not have the required length of service, but the bank will offer him an overdraft.
For an overdraft to be opened, the card must be valid for several months (usually from six months) – so the bank can track the frequency of receipts.;
The overdraft limit varies depending on the bank and card type. It can be either 30-50% of the average monthly income, or 5-6 salaries.;
No documents are required to open an overdraft – all the necessary documents are provided at the initial opening of the account. As a rule, it is enough to sign an overdraft agreement on the terms offered by the bank;
Overdrafts can hardly be called profitable – banks open them at a fairly high interest rate (25-30% per annum). In addition, in many cases, a commission is paid for using the overdraft.;
To use the limit, just withdraw an amount greater than the account balance-without additional requests to the bank;
The overdraft is repaid automatically – When funds are credited to the account, the bank debits them to the loan account.
Debit card overdraft is a very convenient type of loan that allows you to get access to borrowed funds at any time. However, it has several disadvantages – the most significant is that overdraft is addictive to loans, and after a while the borrower can not do without them.
Experts recommend that you do not open overdrafts for significant amounts – this can lead to the fact that your entire salary or pension will be spent on repayment, and you will again and again use credit funds. It is advisable to distinguish between a debit card and a loan account – for example, to issue a separate credit card.
Credit cards
A credit card is a special type of consumer loan issued to individuals. A card with a credit limit is an opportunity to use the bank's funds at any time and in any place. Credit Card Features:
To issue plastic, you need to open a loan account, which means that you need to apply for a bank loan;
The credit card limit is the amount of the loan provided by the bank;
Card processing takes from a few hours to a week, depending on the speed of credit application processing and its limit;
To issue a card, you need a client's passport, proof of income, place of work – that is, everything you need to issue a regular consumer loan;
Credit cards are issued only to persons over the age of 18 who have a permanent job;
Card rates can be quite high – up to 40-50% per annum. This is a fee for the" revolver " of plastic-that is, the ability to repeatedly use the limit.;
Many credit cards also have a debit limit – and if there are no commissions for cash withdrawals, they can be very profitable for the client. As a rule, banks charge interest on the balance of their own funds on credit cards according to the type of deposits, and the rate can be quite good.
A credit card is a payment instrument that provides the borrower with access to a loan account. It can only have a credit limit, but it can also serve as a debit card-it all depends on the tariffs of a particular bank.
Prepaid cards
A fairly new type of plastic card is prepaid. They appeared only a few years ago, and have not yet gained popularity. A prepaid card is a kind of analog of a gift certificate for stores and beauty salons, but with a much wider range of applications. Main Features:
They are issued as a non-named debit card – that is, they are issued instantly, at the time of signing the contract
This is a bearer card, meaning that it can be used to pay any owner, regardless of who purchased the card;
It has a certain limited limit and does not involve opening an overdraft or adding funds to the account (in the latter case, there are exceptions);
As a rule, it is unsuitable for payments on the Internet;
You can withdraw cash from the card or use it to pay at store terminals.
A prepaid card is an excellent substitute for a gift certificate, cash gifts, or an envelope salary. Carrying such plastic is safer and more convenient than carrying cash, but there are a number of restrictions in comparison with a debit card.
Dividing cards by area of use
Until now, it was only a question of dividing cards according to the owners of funds, which can be the plastic holder himself, the bank, or a third person who bought a prepaid card. However, the choice of a credit or debit card is not limited – you also need to determine in which territory you need to use plastic. For this reason, cards are divided into:
Intrabank funds – that is, those that can only be cashed out at the issuer's ATMs. These are, for example, the cards that some banks issue for cashing out consumer credit.
Local – cards that can only be used in a limited area (for example, in the country where it is issued). For example, there are several local payment systems in Russia, with which only local banks cooperate.
International cards belong to major payment systems, and they can be cashed out in any country in the world. These cards will be useful for travelers-you can link them to a multi-currency account and make payments in one of several currencies;
Virtual cards are used for payments in the Internet space. They don't exist in physical form, and they can't be used at an ATM or offline store. At the same time, a virtual card is an excellent payment tool for non — cash payments and online purchases.
Dividing cards by payment system
The choice of payment system for the future plastic card is also important. In this case, it all depends on your personal needs:
If you are interested in the most complete range of services, the possibility of payments at ATMs of most banks in other countries, then it is better to choose one of the largest systems, Visa or MasterCard;
Internal systems are very convenient if you do not plan to travel abroad. Banks offer more attractive terms for these cards, but you should always keep in mind the limited number of ATMs and terminals that accept such cards.;
It is worth highlighting American Express cards – they can be very profitable for travelers, since this is one of the most popular systems abroad. However, it has not been widely distributed in Russia, so it may be difficult to withdraw money from the card on the territory of our country.
Dividing cards by prestige level
It is worth mentioning separately about the division of plastic cards by customer loyalty. Today, banks offer cards of several levels:
Electronic-the simplest, "entry" level. Banks can open such cards to any client, regardless of their financial situation and account turnover. The range of card services is extremely limited, often not even including online payments, but the cost of service and customer requirements are minimal;
Standard cards are the most common type of plastic. They offer a wide range of services, including cashbacks, bonuses, affiliate programs, and opening credit limits. The service cost is higher than for electronic services;
Premium-level cards: gold, platinum, diamond, etc. Cards with the most comfortable service conditions and additional services for the client. The cost of creating and maintaining an account is significantly higher than for standard cards, but the client is not required to pay some commissions – they are included in the cost of annual maintenance.
Conclusions
So, there are many typologies of plastic bank cards, and the division takes place according to various parameters. The final choice should be made based on your own wishes and suggestions of the banks of your city. The most popular are debit and credit cards of Visa or MasterCard systems, issued on standard terms – they provide most of the needs of customers for a reasonable fee. However, do not forget that there are many other types of plastic that can be very attractive in certain situations.
Article content
1. Bank card – what is it, and what is the essence of its work
2. Main types of bank cards
3. Debit cards
4. Overdraft cards
5. Credit cards
6. Prepaid cards
7. Dividing cards by area of use
8. Dividing cards by payment systems
9. Dividing cards by prestige level
10. Conclusions
Bank card – what it is, and what is the essence of its work
In order to talk about the types of bank cards, first we will determine what they are. Many plastic cardholders mistakenly believe that a card and a bank account are one and the same thing. This leads to many common misconceptions – for example, that the loss of the card leads to the loss of funds on it. However, this is not the case at all.
In fact, a bank card is just a payment instrument. By itself, it is a piece of plastic, and only "linking" to the customer's bank account allows you to use the card to dispose of your money. Of course, the loss, blocking or damage of the card does not affect the status of the account (of course, if it with other data did not fall into the hands of scammers who can cash out your money).
You can link almost any of the existing card types to the same account – it all depends only on the bank's tariffs and capabilities, as well as the client's own wishes. So let's talk about what types of "plastic" can be produced today, and how they differ from each other.
Main types of bank cards
Despite the apparent variety of bank cards that financial institutions offer their customers today, they all have similar characteristics and varieties in the database. The difference is only in the rates, commissions, additional services offered and bonuses – but before comparing the financial benefits of cards from different banks, you need to decide on the type of" plastic " that best suits you. As a rule, you can divide cards by several parameters:
By the owner of funds on the account – debit, credit, overdraft, prepaid;
By territory of use – local, international, intra-bank, virtual;
By payment system-Visa, MasterCard, Zolotaya Korona, American Express, etc.
By customer loyalty level and service volume – electronic, standard, gold, platinum, etc.
By the method of data storage – chip, with magnetic tape, combined.
The combination of different parameters from this list gives the huge range of "plastic" that can be seen today in advertising offers of banks. But it is precisely this abundance that leads to confusion for future cardholders – how to choose the right type and not make a mistake. Let's tell you more about the most popular categories of banking "plastic".
Debit cards
Debit cards are "plastic" linked to a current account deposit. This is the most common type of bank card – all salary," pension", and settlement cards belong to this type.
The main feature of debit cards is that the client has the right to dispose exclusively of money placed in advance by himself in a bank account. If this amount has already been spent, it is impossible to withdraw funds from the card until the next deposit. Here are some other characteristics of debit limit cards:
Such a card can be "linked" to a salary account, a deposit account "on demand", a deposit account with the possibility of partial withdrawal of funds, an account of accrued interest;
You can issue a debit card for a teenager from 14 to 18 years old (with parental consent); for children from 6 to 14 years old, you can issue an additional card to the parent card with limited transactions on it. Individuals over the age of 18 may apply for debit cards themselves.
An application for issuing a debit card is considered as soon as possible (a few minutes), as it does not require additional permissions and checks. Depending on the type and region of the card itself, it can be issued instantly or take several weeks.
To issue a debit card, you only need a passport and the client's personal presence, and no additional documents are required.;
As a rule, debit cards do not have upper and lower limits on the balance – the client can either reset the account or place unlimited amounts on it;
Funds on card accounts are protected by the deposit insurance system (with a maximum refund amount of RUB 1.4 million);
A certain small percentage may be charged on the balance of funds (usually the average monthly amount on the account is considered);
You can use a debit card to pay in cash or non-cash: make payments on the Internet and through an online merchant profile, withdraw money from ATMs, and pay for goods and services at payment terminals.
A debit card is a convenient payment instrument that is issued to a current bank account. With its help, you can have access to your funds around the clock and not depend on the opening hours of bank branches.
In addition, the functionality of debit cards can be expanded – for example, many banks offer to open a credit limit (overdraft) for them.
Overdraft cards
One of the most unclaimed products of banks is overdraft cards. Many holders of "plastic" simply do not understand the mechanism of operation of such a credit limit, and therefore refrain from using it. Let's tell you more about these cards.
So, an overdraft is lending to a debit account. In fact, a client who has entered into an overdraft agreement gets the right to pay with the card in excess of the balance available on the account. Key features of an open overdraft card:
The credit limit is not open to everyone – banks have a certain list of requirements for the client (age, credit history, financial situation, work experience, etc.);
The main requirement when opening a limit is stable receipts to the card account. That is why overdrafts are most often offered on salary and pension cards. Compliance with this requirement "covers" the violation of others – for example, the client may not have the required length of service, but the bank will offer him an overdraft.
For an overdraft to be opened, the card must be valid for several months (usually from six months) – so the bank can track the frequency of receipts.;
The overdraft limit varies depending on the bank and card type. It can be either 30-50% of the average monthly income, or 5-6 salaries.;
No documents are required to open an overdraft – all the necessary documents are provided at the initial opening of the account. As a rule, it is enough to sign an overdraft agreement on the terms offered by the bank;
Overdrafts can hardly be called profitable – banks open them at a fairly high interest rate (25-30% per annum). In addition, in many cases, a commission is paid for using the overdraft.;
To use the limit, just withdraw an amount greater than the account balance-without additional requests to the bank;
The overdraft is repaid automatically – When funds are credited to the account, the bank debits them to the loan account.
Debit card overdraft is a very convenient type of loan that allows you to get access to borrowed funds at any time. However, it has several disadvantages – the most significant is that overdraft is addictive to loans, and after a while the borrower can not do without them.
Experts recommend that you do not open overdrafts for significant amounts – this can lead to the fact that your entire salary or pension will be spent on repayment, and you will again and again use credit funds. It is advisable to distinguish between a debit card and a loan account – for example, to issue a separate credit card.
Credit cards
A credit card is a special type of consumer loan issued to individuals. A card with a credit limit is an opportunity to use the bank's funds at any time and in any place. Credit Card Features:
To issue plastic, you need to open a loan account, which means that you need to apply for a bank loan;
The credit card limit is the amount of the loan provided by the bank;
Card processing takes from a few hours to a week, depending on the speed of credit application processing and its limit;
To issue a card, you need a client's passport, proof of income, place of work – that is, everything you need to issue a regular consumer loan;
Credit cards are issued only to persons over the age of 18 who have a permanent job;
Card rates can be quite high – up to 40-50% per annum. This is a fee for the" revolver " of plastic-that is, the ability to repeatedly use the limit.;
Many credit cards also have a debit limit – and if there are no commissions for cash withdrawals, they can be very profitable for the client. As a rule, banks charge interest on the balance of their own funds on credit cards according to the type of deposits, and the rate can be quite good.
A credit card is a payment instrument that provides the borrower with access to a loan account. It can only have a credit limit, but it can also serve as a debit card-it all depends on the tariffs of a particular bank.
Prepaid cards
A fairly new type of plastic card is prepaid. They appeared only a few years ago, and have not yet gained popularity. A prepaid card is a kind of analog of a gift certificate for stores and beauty salons, but with a much wider range of applications. Main Features:
They are issued as a non-named debit card – that is, they are issued instantly, at the time of signing the contract
This is a bearer card, meaning that it can be used to pay any owner, regardless of who purchased the card;
It has a certain limited limit and does not involve opening an overdraft or adding funds to the account (in the latter case, there are exceptions);
As a rule, it is unsuitable for payments on the Internet;
You can withdraw cash from the card or use it to pay at store terminals.
A prepaid card is an excellent substitute for a gift certificate, cash gifts, or an envelope salary. Carrying such plastic is safer and more convenient than carrying cash, but there are a number of restrictions in comparison with a debit card.
Dividing cards by area of use
Until now, it was only a question of dividing cards according to the owners of funds, which can be the plastic holder himself, the bank, or a third person who bought a prepaid card. However, the choice of a credit or debit card is not limited – you also need to determine in which territory you need to use plastic. For this reason, cards are divided into:
Intrabank funds – that is, those that can only be cashed out at the issuer's ATMs. These are, for example, the cards that some banks issue for cashing out consumer credit.
Local – cards that can only be used in a limited area (for example, in the country where it is issued). For example, there are several local payment systems in Russia, with which only local banks cooperate.
International cards belong to major payment systems, and they can be cashed out in any country in the world. These cards will be useful for travelers-you can link them to a multi-currency account and make payments in one of several currencies;
Virtual cards are used for payments in the Internet space. They don't exist in physical form, and they can't be used at an ATM or offline store. At the same time, a virtual card is an excellent payment tool for non — cash payments and online purchases.
Dividing cards by payment system
The choice of payment system for the future plastic card is also important. In this case, it all depends on your personal needs:
If you are interested in the most complete range of services, the possibility of payments at ATMs of most banks in other countries, then it is better to choose one of the largest systems, Visa or MasterCard;
Internal systems are very convenient if you do not plan to travel abroad. Banks offer more attractive terms for these cards, but you should always keep in mind the limited number of ATMs and terminals that accept such cards.;
It is worth highlighting American Express cards – they can be very profitable for travelers, since this is one of the most popular systems abroad. However, it has not been widely distributed in Russia, so it may be difficult to withdraw money from the card on the territory of our country.
Dividing cards by prestige level
It is worth mentioning separately about the division of plastic cards by customer loyalty. Today, banks offer cards of several levels:
Electronic-the simplest, "entry" level. Banks can open such cards to any client, regardless of their financial situation and account turnover. The range of card services is extremely limited, often not even including online payments, but the cost of service and customer requirements are minimal;
Standard cards are the most common type of plastic. They offer a wide range of services, including cashbacks, bonuses, affiliate programs, and opening credit limits. The service cost is higher than for electronic services;
Premium-level cards: gold, platinum, diamond, etc. Cards with the most comfortable service conditions and additional services for the client. The cost of creating and maintaining an account is significantly higher than for standard cards, but the client is not required to pay some commissions – they are included in the cost of annual maintenance.
Conclusions
So, there are many typologies of plastic bank cards, and the division takes place according to various parameters. The final choice should be made based on your own wishes and suggestions of the banks of your city. The most popular are debit and credit cards of Visa or MasterCard systems, issued on standard terms – they provide most of the needs of customers for a reasonable fee. However, do not forget that there are many other types of plastic that can be very attractive in certain situations.
