Every year, the number of debit cards issued is only growing. Many bank customers are holders of several types of plastic at once. In simple terms, a debit card can be called an electronic wallet. You can store personal funds in it and be sure that nothing will happen to them. It’s time to learn more about what a debit card means.
What is a debit card?
A debit card is a payment card of a particular bank, which is tied to the current account of its holder.
It is used by the owner to make purchases, pay for various services, receive cash at ATMs, transfer funds to cardholders of other banks. The main function of debit plastic is money, it can be spent and can be withdrawn at any time.
The owner of a debit card can only manage the amount that does not exceed the balance of the account. The main difference between debit plastic and credit card or overdraft is the absence of a credit line.
However, debit card holders can go negative. The most common reason for the formation of debt is writing off a commission for Internet banking or SMS banking, as well as annual service. Often, such situations arise due to currency conversion.
Another common example of debt formation is cashing out funds at an ATM of another bank. The client pays a commission according to the fees of the acquiring bank. If the account does not have enough funds to pay the commission, then the operation is still carried out and there is a minus corresponding to the amount of the unpaid commission.
Basic types and classification
Debit cards are classified by payment systems. The main payment systems are:
- Visa international;
- Mastercard WorldWide;
- American Express.
These giants occupy about 80% of the market for all bank cards issued. Of course, each of these payment systems has several types of subspecies:
- Visa Electron, Classic, Visa Classic Light, Visa Gold, Visa Platinum;
- Mastercard, MasterCard World, MasterCard Gold, Mastercard Standard, Maestro;
- American Express The Platinum Card, Gold Card, American Express Card, Classic Card, Premium Card
For example, Visa Electron and Maestro types are sometimes not used to pay for purchases via the Internet (it all depends on the bank), unlike their more “status” counterparts: Visa Classic or Mastercard Standart. Accordingly, the cost of production and annual maintenance of the former will be much cheaper. If you intend to use a debit card abroad, you’d better prefer a Visa Classic or Mastercard Standart. These are universal types of plastic that are accepted all over the world.
Apart from others, there are privileged debit cards Platinum, Silver and Gold. Owners of such plastic have new opportunities: discounts, reservations, and other additional services. It is not difficult to guess that such cards are the most expensive.
How does a debit card work?
For payment transactions, the amount is immediately debited from the bank account to which the card is attached. In the case of debit, payment for the purchase will be made successfully only if there are enough funds on the account to complete this operation.
PayPass is a unique system from MasterCard that provides contactless payments when paying with a debit card. The main goal and objective is to speed up and simplify the payment process as much as possible. When paying for purchases using a card with PayPass technology, it is enough to lean it on a special PayPass terminal, no pin codes and signatures are required. It’s not even necessary to get it from your wallet, just lean it against the terminal. The downside is the small number of terminals that can handle these types of cards.