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Credit card – Debit card – ...

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Credit card – Debit card – Smart card

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Static GK is one of the important section in both Government Sector and Bank related Exams. In the static GK, Banking is one of the important topic. The article Credit card – Debit card – Smart card presents the key points of Credit card – Debit card – Smart card and different payment methods . The article Credit card – Debit card – Smart card can help the students and aspirants to perform well in the exams like IBPS PO, SO, Clerk, SBI, RRB, etc.

There are many different payment methods out there: cash, debit cards, credit cards, ATM cards, and much more.

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Credit card – Debit card – Smart card – Types :

Types of payment cards can be distinguished on the basis of the features of each type of card, including:

  • Credit card

  • Charge card

  • Debit card

  • Prepaid Card

  • ATM card

  • Smart Card

Cards That Build Credit:

  • Credit Cards

  • Charge Cards

Credit Cards:

  • A credit card allows you to make purchases with borrowed money, known as credit.

  • As you spend and make purchases on your credit card, you will begin to build up a balance that needs to be repaid at the end of every month.

  • The more immediate benefits of having a credit card are extra purchasing power and flexibility.

  • Most businesses accept credit cards, and some services, including Uber and car rental agencies, only take payment from a credit card.

Charge Cards :

  • Charge cards offers as large, often unlimited, credit limits for cardholders.

  • The main difference between a charge card and credit card is that any charges made with a charge card must be paid in full by the end of every month.

  • There is no minimum balance.

  • Not paying your full balance on a charge card will result in fees and penalties.

  • A charge card will build your credit history, however, a strong credit score is typically needed to be approved for a charge card.

Cards That Do Not Build Credit:

  • Debit Cards

  • Prepaid Cards

Debit Cards:

  • Using a debit card will automatically deplete your bank account’s funds.

  • Most debit cards will have a credit network like VISA or Mastercard logo on them.

  • Having these credit networks printed on them means that the debit card is accepted as a form of payment in many places.

  • Despite this, using a debit card will not build your credit history.

  • On a side note, a debit card can also be used to withdraw or deposit cash from an ATM.

  • ATM cards specifically designed for this purpose of withdraw or deposit cash.

  • A debit card is a 4-digit PIN for transactions at retail outlets, and at ATMs, and a 6 digit 3D secure password for online transactions which make the card secure from any fraudulent usage.

Prepaid Card:

  • Prepaid cards can bought at department stores.

  • When you purchase a prepaid card, you are loading money into it.

  • After using all of your funds in your prepaid card,you can then reload it with additional money.

  • A prepaid card eliminates the need for carrying cash but does not help build your credit history.

ATM Card:

  • An ATM card is a PIN-based card.

  • That means that in addition to using it at ATMs, you may also be able to use it to make purchases (by entering your Personal Identification Number) if the merchant is using one of the same electronic ATM networks that’s listed on the back of your card.

ATM Card Vs Debit Card:

  • ATM Cards: We can use ATM Cards at ATMs only.

  • Debit Cards: We can use anywhere, but require deposit.

Smart Card:

  • A smart card is a security token that has an embedded chip.

  • Smart cards are typically the same size as a driver’s license and can be made out of metal or plastic.

  • They connect to a reader either by direct physical contact (also known as chip and dip) or through a short-range wireless connectivity standard such as Near Field Communication (NFC)

  • The chip on a smart card can be either a microcontroller chip or an embedded memorychip.

  • Smart cards are designed to be tamper-resistant and use encryption to provide protection for in-memory information.

  • Those cards with a microcontroller chip have the ability to perform on-card processing functions and can add, delete and manipulate information in the chip’s memory.