Different Types of Payment Cards
Types of Payment Cards
A payment card is a plastic card on which the monetary value of goods or services bought or money exchanged for goods and services can be electronically debited from an account linked to the card. With the rise in online shopping, cashless payment cards have become more popular. Check out these commonly used types of payment cards.
Debit Card
A debit card allows users to spend money that has been electronically transferred from a checking account, savings account, or other bank account. The transfer amount is deducted from the account each time purchases are made.
Debit cards are sometimes called check cards because they resemble a standard check. Debit cards can be used for online and in-person purchases, as well as cash withdrawals at ATMs and point-of-sale terminals.
Credit Card
Credit cards are the most commonly used type of payment card. They are known for their flexibility, convenience, and security. Credit cards have a credit limit set by the card issuer, which can include a credit limit on cash advances and certain types of purchases depending on the card type.
If you go over the credit limit or don’t pay off the balance in full each month, interest rates may be charged for purchases made in-store or online. According to the experts at SoFi, “Make 12 monthly on-time payments of at least the minimum payment due, and we’ll lower your APR by 1%.”
Prepaid Card
The first and most common type of payment card is the prepaid card, which is a debit or credit card that comes loaded with a predetermined amount of money. Prepaid cards are typically used for shopping online and can be linked to an account, such as a checking account, to withdraw cash from the card.
Charge Card
Charge cards are typically used by individuals with a good credit history and a high account balance. The cardholder can use it to make purchases without having to pay in advance, and the cost of the purchase will be added to the cardholder’s account for later payment.
Charge cards usually have higher interest rates than other types of cards. If you are considering a charge card, be sure that you understand how much interest you will owe if you do not pay off your balance in full each month.
Electronic Card
Electronic cards are becoming more popular as they offer convenience, security, and a variety of features. These cards can be used for online or physical purchases. They typically have an embedded microchip that stores cardholder information and transaction details securely.
Some electronic cards include the ability to facilitate contactless payments at the point of sale, which is convenient for consumers who want to make payments without remembering their card number or PIN code. Electronic cards also offer extra security measures to protect against unauthorized transactions.
Credit cards might be the most popular form of payment, but there are many other types of payment cards that businesses should consider offering their customers.
