There are more bank cards in addition to traditional credit or debit cards. For all consumers to ensure that they make the right choice for their finances, we have brought together the differences between the various types of bank cards.
These are payment methods issued by duly authorized payment service providers, which include credit, payment or electronic money institutions.
Bank cards, in addition to freeing up their wallet, make them safer on a day-to-day basis, since there is no need to walk around with a lot of money.
Bank cards also allow you to carry out various transactions: from payments to movements and balance queries, to bank transfers, to paying taxes, among others – for this reason they also become very comfortable.
However, there are different types of bank cards, each with its specificity. Get to know them.
1. Credit Cards
Credit cards are the types of bank cards most known and used by the Portuguese. They stand out because they have an associated credit line that can be used, but that entails the payment of interest.
These allow not only to make payments for goods and services, but also, in some cases, to raise money on credit, an operation that is called cash advance and that implies increased costs for the client.
Learn more : What is cash advance ?
In contracting this product, the financial institution and the customer agree on the maximum credit limit – that is, the ceiling – as well as the form of repayment and respective conditions, the interest rate associated with the card and the costs associated with (usually translated into annuity).
The refund of a payment with the credit card can be done in two different ways according to the client’s need:
- Full repayment of the debt before a deadline (which is always predefined by the bank), which does not imply the payment of interest;
- Partial reimbursement, in installments previously agreed upon, which entails payment of interest on the amount owed.
Ideally the client will choose to pay the entire amount owed before the cut-off date, if possible, because this avoids interest payments.
On the other hand, it is also important to know the interest rate associated with credit cards, which is the APR (Annual Effective Annual Rate), which includes all charges and commissions associated with the card.
Another feature of this type of bank cards lies in the advantages they offer to consumers. There are credit cards that allow you to accumulate air miles , others that offer discounts , some allow you to accumulate points that can then be exchanged for products and / or services and there are still those that make it possible to recover part of the money spent on the card, called cashback . There are still those who offer access to exclusive benefits – these are premium cards.
The offers are diverse, being only necessary to compare the market to find the most suitable for you.
Choosing the Right Credit Card Meet : 5 Expenses you should not pay with your credit card
2. Debit Card
Debit cards are also the most widely used types of bank cards. These are linked to a current account in which the value used by the consumer is immediately discounted, either for service / purchase payments or for withdrawals.
This financial product allows you to raise money, make payments, make consultations and bank transfers, among other operations.
Debit cards have annuities and commissions whose amount charged differs depending on the financial institution, so you should analyze these aspects in detail before choosing a card for you.
Find out : What makes a good bank account?
3. Deferred Debit Card
This is a sub-type of credit card (even if it is called a “deferred debit card”), being associated with a current account and allowing the payment of goods and services and withdrawing money.
But what does this model differ from the normal credit card? The deferred debit card does not carry interest payments.
This type of card has an associated maximum credit limit, such as a credit card. However, the movements made by the customer are not immediately displayed in the balance of their account. Instead, they are debited later, on an agreed date between the consumer and the issuing institution of the card.
4. Loyalty card
Loyalty cards are one of the types of bank cards that exist, but they differ strongly from others because they belong to a particular brand or store, and may present the form or not of credit cards.
These products, which do not have an associated credit line, are only used in their brands and do not allow payments to be made.
On the other hand, if it is a loyalty credit card, the advantages are more appealing: discounts on the brand, in some cases the possibility of making purchases not only in the brand, but also in other stores, as well as fractional payments when purchasing products or services of the brand in question.
If this is the case, the card will be associated with an issuer. In Portugal we have the examples of Oney , with the cards of Leroy Merlin and Jumbo, Cetelem , which associates with brands like IKEA and Media Markt, and UNICRE, with Credivision and Halcon cards.
5. Prepaid Card
With the prepaid card, the customer only has available a certain amount to load beforehand. This card makes it possible to make payments and withdrawals, as is the case with the debit card, in case there is a remaining balance. After use, the amount used is taken from the balance of the prepaid card.
Some institutions that hold prepaid cards are BPI , Caixa Geral de Depósitos and Millennium bcp .
Learn : How to make secure online purchases with the prepaid card?
6. Dual Card
The dual or mixed card is the latest of the various types of existing bank cards. This combines the functions of debit and credit, allowing to perform operations in both functions.
As a rule, this type of bank card is associated with two payment networks, one credit and one payment, which may be, for example, Visa and American Express or Visa and MasterCard .
There are several financial institutions that have this type of bank cards. Santander Totta and Banco Best , for example, have this feature on all their credit cards. The same goes for some New Bank products : NB Green Dual, NB Gold Dual and NB 360 Platinum Dual. Other banking entities with dual cards are BPI and Crédito Agrícola .
Realize : What is the difference between Visa and MasterCard?
But then, which one to choose from among the types of bank cards?
It all depends on the needs and use of the bank card. However, it is very important to have some aspects in mind, such as interest rates, as well as the fees associated with different payment operations – cash advance , online credit or fuel tax – and the rates charged in payments made abroad.
On the other hand, should also look at the annuity. A non-annuity card is very appealing, but may not have all the features and / or advantages you are looking for or need.
Lastly, you should also consider the pros and cons that the various types of bank cards present and of course, compare the entire market to choosing the right one for you. In a few steps, through our platform it is possible to analyze all the credit cards of the market and to understand which one fits best in your needs: