en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en fr en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en
There are a number of different kinds of bank cards a person may come across in the course of their financial life – ATM cards, debit cards, credit cards, and prepaid debit cards.
All of these, as one may gather, work differently – and how they differ is an important thing to know in order to wisely use each kind of card.
The Different Bank Cards You Might See
These kinds of cards are typically issued by a bank, which aim to provide their customers a greater sense of flexibility in their banking hours.  (If you can believe it, there was once a time when you had to go to a bank teller to get cash!)
For the most part, a customer can use their ATM card to make deposits, withdraw money, transfer money between their accounts, get a cash advance, check an account balance, or even make a loan payment at any given convenient time, day or night.  All of this would be done at an ATM.
Make sure an ATM you use is within your bank’s network or you could be hit with ATM fees.
These kinds of cards, also issued by a bank, generally combine the uses of an ATM card and a check, in that using a debit card to make a purchase will result in the funds immediately being withdrawn from the bank account.  With a debit card you can make either a PIN transaction (where you enter your PIN code) or a signature transaction (where you sign for the purchase).
You may notice that these cards are backed by either Visa or Mastercard (this is what allows you to make a signature transaction).  Debit card users need to watch that they don’t overdraw (overspend) on their account as there could be steep penalties.  Debit cards retain the same functions as previously outlined for ATM cards.
These kinds of cards work in a straightforward manner.  There is no bank account from which money is deducted, though there is a limit to how much a person can spend before paying it off.
Basically, the credit is a loan being given to the user of the card.  Generally, the company that issues the card requires a minimum payment on the bill per month and requires, in exchange, a person pay interest on the owed balance, which can be as high as 29% per year.  If you pay it off in full there is no interest.  Credit cards can be very useful but the fact that the money isn’t being drawn from an account can easily lead people to overspend and get into credit card debt.
These are generally accepted as credit cards and are a good option for those with poor credit because, unlike a credit card, it does not require a credit check for approval.
A predetermined amount of money is put into the card balance and can be spent just like any other debit or credit card, until the money runs out.  At that point, it must be refilled with more money before it can be used again.
A prepaid debit card can be a great way to keep on budget as you can only spend what’s on the card.  The drawback, of course, is you are limited to the amount on the card and you must keep track of the balance.
A consumer these days most likely has a number of different bank cards they carry with them daily.  Its important to understand how each works and which card is best for your spending needs.
What bank card do you use the most?
Filed Under: Bank Tagged With: bank cards, credit cards, debit cards, prepaid debit cards
Glen Craig is married and the father to four children that he spends the day chasing as a stay-at-home-dad. He took an interest in personal finance when he realized most of his paycheck was going toward credit card bills. Since then he's eliminated his credit card debt and started on a journey towards financial freedom.
April 7, 2010 at 7:26 am
Good common sense info. To add to the list, Secured Credit Cards are like a pre-paid credit card in that your pre-payment acts as a collateral. Unlike a PIN transaction with a Debit card, funds are not taken from your prepayment. You are still required to make payments like a regular credit card.
.-= MoneyCone´s last blog ..Review of online broker OptionsHouse Part II =-.
Great addition to the list! Basically, you give the bank your credit limit up front, possibly in the form of a CD. Its still a credit card but the bank has money equal to your credit limit in case you don’t pay. This is a good option if you have bad credit and need to work up to better credit.
April 7, 2010 at 4:59 pm
One more to add to the list is a Charge Card. Charge cards are like credit cards, and are usually issued through a credit card company (The biggest I know of is American Express) but the total balance is due at the end of the month, every month. The card has no limit and isn’t on your credit report. The positives about this card are you get all the benefits of a credit card, ie. points, general acceptability, convenience and online management, without the temptation of racking up debt.
.-= Jesse´s last blog ..Your Guide to Income Based Repayment =-.
April 7, 2010 at 6:50 pm
Charge cards are another one! But I think the lines are blurred these days as American Express has options to pay balances over time. Still, it does give you a greater incentive to pay your balances off.
April 7, 2010 at 5:42 pm
Thanks so much for the link! I think credit card companies and banks can be crazy with their rules now. It’s nice to know ways to get around things. 🙂
.-= Mrs. Money´s last blog ..What Would You Do? =-.
April 9, 2010 at 6:33 am
I rarely if ever use my debit card – I’m always freaked out about someone using the number to drain my account!
I almost always use a credit card – my business Amex and our personal Amex tie points in together so we can rack ’em up quicker!
April 9, 2010 at 8:06 am
I believe if you use signature transactions for your debit card then you should be protected against fraud.
If I ever go the business card route I’ll have to look into combining the points together!
April 9, 2010 at 12:08 pm
I hate bank cards!
I use credit for everything I can.. it simplifies my accounting, and maximizes my rewards. 🙂
But every bank account I have keeps sending me (and my wife) debit cards that I never use (except for ATM withdrawals). they just clutter my wallet… hmm… now that I think about it, maybe I just have too many bank accounts…
April 10, 2010 at 9:04 pm
I hate when you get cards you don’t want. They should ask first! I carry a couple of key cards and that’s it.
April 15, 2010 at 11:54 pm
I like the prepaid credit card idea. Even for people with great credit.
Sure helps prevent spending more money than you have.
April 19, 2010 at 8:42 pm
Thanks for the clear explanation of each of these cards. I am old fashioned…I still write checks and use cash, and occasionally a debit card. For me, this is the easiest way to stay in control of my money without overspending.
April 19, 2010 at 9:41 pm
Whatever works best for you! There’s is no one way that’s best for everyone. As much as I’d like to leave behind paper checks I still use them from time to time.
April 20, 2010 at 8:21 am
I use a Visa debit card through my local bank. The checking account pays 4% interest!
April 20, 2010 at 12:18 am
Wow, that’s a real good rate for checking. Is there a minimum balance for the account?
July 11, 2020 at 6:00 am
I do have this debit card that I barely used but after reading this article, the thought of starting to make use of my debit card came into my mind. Although I prefer that of the credit card to the debit card. Thanks, for this creating this blog, will love to visit this blog continuously for more update.
A Little About Me
I'm Glen Craig - I used to live paycheck-to-paycheck, drowning in credit card debt. I turned that all around and now I build wealth rather than debt.
My goal is to make personal finance easy for you.
Join our email list (FREE) and never miss an article!
Use Google Calendar To Pay Your Bills On Time
9 Things to Do When You Retire
Side Hustle-Make Extra Money Cleaning Homes
Four Ways You Can Pay Off Your Home Mortgage Faster
Don’t Forget Your 401(k) When You Leave Your Job! Here’s What You Can Do With It
Your 4 Step Guide on How to Stop Living Paycheck to Paycheck
What Is A Mortgage Escrow Account?
This is Why Your House Isn’t Selling – Here’s How to Finally Get Your House Sold
7 Ways to Get Rich Quick
What is Renter’s Insurance and Why You Need It
What Is a Probate Lawyer and When Would You Use One?
Money Market Account VS Savings Account – What’s the Difference?
Five Ways Fantasy Baseball is Like Personal Finance
Tools to Help Organize Your Taxes
Don't Let Your Goals Fizzle Out! - 5 Reasons Goals Fail, and What You Can Do To Make Yours Succeed
What Do You Think of New Year's Resolutions?
Tools to Improve Your Finances
Online High Yield Savings
All About Online Checking Accounts – Why Pay More Fees Than You Have To
Personal Capital Review - A One Stop Financial Center
Online Brokerages That Won't Break Your Bank
Credit Karma Review - Get Your Credit Score and More
Mortgage and Refinance Rates
Follow Us On Pinterest!
Follow Free From Broke's board Most RePinned and Popular {Free From Broke} on Pinterest.
Think Long Term When Shopping Black Friday and Cyber Monday
10 Essential Tips For Shopping Black Friday And Cyber Monday That Will Save You Money
How to Improve Your Credit Score Fast
What is a Refund Anticipation Loan (RAL) and is it Worth It?
Paying Taxes with a Credit Card: Pros and Cons
Free From Broke is for general information or entertainment purposes only and does not constitute professional financial advice. Be smart and do your own research or contact an independent financial professional for advice regarding your specific situation.
In accordance with FTC guidelines, we state that we have a financial relationship with companies mentioned in this website. This may include receiving access to free products and services for product and service reviews and giveaways.
© 2007–2022 Free From Broke A Personal Finance Blog For Regular Folks – All rights reserved.
No content on this site may be reused in any fashion without written permission from FreeFromBroke.com | Privacy Policy | Sitemap
Copyright © 2022 · Metro Pro on Genesis Framework · WordPress · Log in
We are using cookies to give you the best experience on our website.
You can find out more about which cookies we are using or switch them off in settings.
Go to mobile version
Close GDPR Cookie Settings
Powered by  GDPR Cookie Compliance
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
Enable or Disable Cookies
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.