Bank-issued plastic card with a magnetic stripe that holds machine readable identification code. Bank cards are used for electronic commerce (with magnetic stripe readers or via Internet) and for banking transactions through automatic teller machines (ATMs)
Types Of Bank Card
A credit card is linked to a line of credit (usually called a credit limit) created by the issuer of the credit card for the cardholder on which the cardholder can draw (i.e. borrow), either for payment to a merchant for a purchase or as a cash advance to the cardholder.
The cardholder can choose either to repay the full outstanding balance by the payment due date or to repay a smaller amount, not less than the “minimum amount”, by that date. In the former case, interest is typically not charged; while in the latter case, the cardholder will be charged with interest. The rate of interest and method of calculating the charge vary between credit cards, even for different types of card issued by the same company. Many credit cards can also be used to take cash advances through ATMs, which also attract interest charges, usually calculated from the date of cash withdrawal. Some merchants charge a fee for purchases by credit card, as they will be charged a fee by the card issuer.
These are issued by banks, which are linked to a bank account(meaning you need a bank account (savings, current, etc.) before having a Debit card). Debit cards are also known as ATM cards.
Note that you need to have balance in your account, before you make any financial transaction. These can be used for several purposes like –
- withdraw cash from an ATM
- purchase goods and services at Point of Sale (POS) / E-commerce (online – domestic & international; however for international transaction, it needs to be enabled by bank)
- fund transfer / remittances (only domestic), etc.
A charge card is a type of electronic payment card that charges no interest but requires the user to pay his/her balance in full upon receipt of the statement, usually on a monthly basis.
Charge cards are offered by a limited number of issuers.
- A stored value card is a type of electronic bank debit card. Stored-value cards have a specific dollar value programed into them.
- Banks provide these cards as a service for customers who cannot open checking or other deposit accounts.
- Stored-value cards come in two major categories. Closed-loop cards have a one-time limit; merchant gift cards and prepaid phone cards are two examples. Holders of open-loop cards, on the other hand, may reload these with cash and use them again.
- Fleet cards are a type of payment card that allows businesses to manage expenses associated with the vehicles that they own and operate. They are provided by a business to personnel operating company vehicles.
- Fleet cards are used by transportation employees for fuel as well as vehicle repairs and maintenance.
- Issued by banks – also known as Open System Prepaid Cards, which are issued by banks. These are similar to Debit cards in usage, but you don’t need a bank account to get this type of card. You just need to payin advance, with a maximum limit of Rs. 1 lakh (previous limit Rs. 50,000)
- Issued by authorized non-bank entities – also known as Semi-Closed System Prepaid Cards, which are issued by authorized non-bankentities. There are some restrictions on the usage of these cards – can be used only for purchase of goods and services at POS / E-commerce (online) and for domestic remittances, but cannot withdrawmoney from ATMs.
Also, you don’t need a bank account, but need to pay in advance to the non-bank entity, with a max. limit of Rs. 1 lakh.
Other types of payment cards include: