Types of Payment Cards

Transactional cards have become very popular amongst everyone these days, due to its convenient and simple nature. Payment cards eliminate the need to carry much cash around with you, as it can be a huge risk. However, there are multiple types of payment cards available, depending on your need and requirements. If you are pursuing any government jobs in banks, then knowing about all this will serve you well.

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Types of Payment Cards

  1. Credit card

Making financial transactions with a credit card is one of the simplest ways of spending money. When you have a credit card, you can spend whenever you want and you will not have to rely on cash for financial transactions. However, keep in mind that every credit card comes with a transactional limit and if you try to spend more than that, your card will stop working. If you pay your credit card dues before the deadline, your bank might increase the amount of your credit card limit. Another thing that you should keep in mind is that of the interest charges, as every credit card levies a specific amount of money as interest. You will have to pay your credit card bill along with this interest. The faster you pay your dues, the less interest you will have to pay.

  1. Debit card

Unlike a credit card, debit cards allow you to transfer money from one account to another. Apart from this, debit cards have other functions also. You can use your debit card to withdraw money from ATMs and you can use your card to shop at stores whenever you want. Almost all debit cards have an overdraft limit, which provides you with the convenience of checking your current balance, which is limited to a specific amount. Some banks are introducing contactless debit cards, where you will not have to provide any PIN number. However, this is only possible if your purchase falls under a specific amount.

  1. Deferred debit card

Deferred debit cards are somewhat similar to regular debit cards, as in you will be able to purchase anything with it. The only difference is that unlike debit cards, the purchase amount will be deducted after some days. When it comes to a debit card, you have to provide a PIN number to complete your purchase, but in case of a deferred debit card, you will have to sign a receipt to validate the purchase. A deferred debit card balance is generally positive, and it takes around 2-4 days for the purchase amount to be deducted. Hence, ensure that your account has sufficient money all the time.

  1. Charge card

Charge cards are very similar to credit cards, with the biggest difference being that with a charge card, you can borrow as much money as you like. You will have to pay a yearly amount of money for the charge card but you will also get many benefits and rewards, such as access to airport lounges and several kinds of insurance plans. Keep in mind that you will have to pay back the whole amount of money on your charge card by a certain date, which is why it is the best option for high earners and high spenders. However, you will not be able to pay it in installments and you will not get the alternative of paying back the minimum amount.

Conclusion

Payment cards can serve you many benefits, and these can help you in your daily life. Apart from this, having a clear idea about the different cards will make it easier when it comes to your competitive exam preparation.

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