Different types of payment cards you must know about

NEW DELHI: In India, there are broadly 4 types of cards by which you could make funds — debit cards, credit score cards, pay as you go cards, and digital cards. These will be categorized primarily based on their issuance, utilization and payment by the cardholder.

All these cards are completely different in phrases of making funds. While some are instantly linked with one’s financial savings checking account, others may also help build your credit score rating. In this piece, we check out completely different types of cards and their utilization.

Debit cards: If you have a financial savings checking account, the financial institution is more likely to difficulty a debit card that’s instantly linked to your financial savings account. Debit cards typically could have a credit score community related to them like VISA or Mastercard. Having these credit score networks printed on cards means that there’s the acceptability of debit cards as a type of payment in lots of nations, locations.

However, utilizing a debit card is not going to assist build your credit score rating. Besides, you may also withdraw money from ATM utilizing your debit card.

Credit cards: The banks and a pair of non-banks (or NBFCs) typically difficulty such cards. However, different authorised entities may also difficulty these cards. You can buy items and companies at PoS terminals/e-commerce by credit score cards. These cards may also help you build credit score rating if the payments are paid on time.

You might use these cards domestically and internationally (supplied they’re enabled for such use).

While credit score cards may also be used to withdraw money from an ATM, you must not accomplish that as a result of you are normally charged a payment upfront primarily based on the quantity you withdraw. You may also switch money to financial institution accounts, debit cards, different credit score cards and pay as you go cards inside India, topic to agreed limits and situations.

Prepaid cards: Banks and non-banks difficulty pay as you go cards towards the worth paid prematurely by the cardholder and retailer them in such cards, which will be issued within the type of cards or wallets.

The norm of pay as you go cards depends upon the issuer of such cards. Prepaid cards will be open or semi-closed and can be utilized to withdraw money from an ATM, buy items and companies at PoS terminals/e-commerce. You may also make home funds transfers, topic to prescribed limits and situations. While banks difficulty open system pay as you go cards, semi-closed system pay as you go cards will be issued by the financial institution and non-bank entities.

Electronic cards: These cards will be thought of debit cards issued in particular overdraft accounts like personal loans with none particular end-use limitations. Banks have been allowed to offer digital cards to folks having overdraft accounts to allow home digital transactions.

For all functions like safety and security, Merchant Discount Rate (MDR), Additional Factor of Authentication (AFA), the directions referring to debit cards are relevant on such digital cards as effectively.

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