All information about Cards
What are Credit and Debit Cards
Cards are a means of payment and financing that are implemented in a plastic generally the size of an Identity document and that serve as a substitute for money. In other words, carrying a credit or debit card in your wallet is the equivalent of having a certain amount in cash.
Cards are accepted worldwide in all countries and in millions of establishments so that in the future cash money may disappear and all movements of collections and payments are made with a plastic or card or in similar systems such as via mobile phone and even with a fingerprint.
There are different types of cards on the market and in the case of credit cards they also serve to have a permanent credit with an established limit. In other cases, the cards are used to retain customers with points and gifts systems when they reach certain levels of purchases.
Classes of Cards according to their use
There are several types of cards depending on the service offered by each one of them:
Credit cards are those that serve as a payment instrument and carry the added value that they have a credit limit and therefore, up to said limited amount, payments can be made and made without having to have cash in the account . The total of all the amounts arranged during the month will be debited in our account at the end of the month unless otherwise agreed to pay a fee during a certain number of terms.
Debit cards are also instrumented with plastic and are used to make all kinds of payments and have cash at ATMs, but unlike credit cards, we must first have enough funds in the bank account since does not carry a credit.
With the arrival of the internet and payments for online purchases, due to the distrust of leaving our card numbers, banks and financial institutions have created so-called virtual cards or recharge cards within the group of Prepaid Cards .
With this type of card, before making a purchase or proceeding to make a payment for services, the balance must be charged with the amount that we choose or need. In this way, the only risk that is run when giving the number and the expiration date and CVV or 3-digit number on the back of the card, would be the amount recharged.
Prepaid cards are also used to make cash gifts or facilitate the provision of cash to children or third parties.
Large supermarket and department store chains have also created their own cards to retain their customers. The best known loyalty card is El Corte Inglés, through which you can make all kinds of purchases in these centers within the limit assigned to us.
El Corte Inglés has been followed by other chains such as Ikea Family, Eroski Visa Card, Carrefour Pass Card , etc. With some of these cards, such as Carrefour, you can make purchases at any business and make cash withdrawals at all ATMs, and Carrefour even offers financing and personal loans through its financial institution.
Commissions charged for Cards
Like most financial products, having a credit or debit card is not free, unless we negotiate with the entity not to pay the commission, or it is the bank or finance company who offers the Free Card to get clients or become advertised.
These are some of the commissions that are charged when we request a plastic:
- Issuance commission : The financial institution has expenses for the study and analysis of the application for the card and the plastic itself, for which they have established a commission when issuing it, although it is quite common to give it free and not charge this commission as a method customer engagement.
- Maintenance fee: However, it is quite common for the bank to charge the commission for renewing the card every year and the amount depends on the type of card if it is debit or credit, if it is a classic or a Gold Visa Card. However, it can also be negotiated Get the free card with the bank every year if we have good balances in the entity or we have the payroll domiciled. Each case and each bank can be different.
- Commission for having money from the ATM : Generally, withdrawing money from the ATM is free as long as ATMs from the bank's own network are used. However, we may be charged a commission for using ATMs other than the issuing Bank's own network.
- Commission for requesting a duplicate card: If the card is stolen or we have lost the plastic, it is advisable to urgently notify the entity and it could charge us a commission for issuing a new one, something that does not usually happen in almost any bank.
Advantages and Disadvantages of using the Card:
There are many advantages of carrying a credit or debit card in the wallet, but there are still many reluctance in the use of them in some people due to the inconveniences they have.
Advantages : It is not necessary to carry cash with the consequent risk involved. With the cards you can pay in most establishments and have cash available in the wide network of ATMs.
In the case of Credit Cards, it is not necessary to have the money at the time of purchase since the payment is postponed at the end of the month.
With the use of the Card, discounts are obtained in thousands of commercial establishments, gas stations, trips and a percentage of purchases in shopping centers that have membership cards as a hook to retain customers. It is very common for us to be asked Do you have a ……. Cepsa, Repsol, Ikea, El Corte Inglés, etc.
When hiring the plastic, it is common for the financial institution to "give us" travel life insurance if it is paid with the card and theft insurance in case of theft.
Disadvantages: If we do not take the proper precautions, the card can be cloned and used fraudulently. However, banks usually take losses if we have acted correctly. For this reason, it is not convenient to carry the secret number written next to the card or to use well-known codes such as the date of birth, etc.
Another drawback is that there is a registered trace of all the movements and payments that are made in those cases where such registration is not of interest.
What are Contactless Cards and mobile payment?
Technology allows the use of cards to expand many possibilities and, on occasions, to be able to use them without the need to carry the plastic in your pocket.
Contactless cards have a new technology by means of a chip incorporated and programmed in a certain way so that the payment is produced simply by bringing the plastic closer to the Dataphone or device that the financial institution provides to the merchant for the use of the cards. In payments of less than 20 us dollars, it is not necessary to enter the PIN, so the payment is made immediately.
It is also possible to make payments without carrying the plastic in your wallet using your mobile. To do this, it is necessary to previously download the entity's APP Application and enter the username and password.
Once the Application is downloaded and the data entered, the system works in a similar way to contactless. The Smartphone approaches the Dataphone that must have NFC technology (not all dataphones work) and follow the instructions set by the APP. Once the payment is made, you receive a notice on your mobile.
In case of loss or theft of the mobile, you can deactivate the payment through the mobile from another device or from a personal computer or by calling the Financial entity itself.
What to do if my Card is lost or stolen:
As we have indicated throughout the text, to have the card it is necessary to have a secret number or code and when making purchases in shops, identify yourself with your identity document. However, in the event of loss or theft, it is best to immediately notify the financial institution or issuing bank of the loss.
In the case of theft, file a complaint at the police station to have the corresponding proof in case there were fraudulent provisions. From this moment on, be aware of possible dispositions not made by the owner or persons authorized to notify the bank.
Since the card is totally unusable once the loss is reported, it is necessary to request new plastic which may take about ten days to arrive.
Differences between credit cards and debit cards
There are substantial differences between the two cards , but the main one is that, while with credit cards, you can make purchases or withdraw cash from an ATM, even if there is no money in the account, and as long as it is not exceeded the limit established in the card, debit cards can only be made, as long as there is a balance in the customer's bank account, and also, as long as the limits established in the conditions and terms of each card are not exceeded.
It is evident that credit cards carry a series of advantages , which will depend to a great extent on the way each client uses them and, above all, also on the need for financing, although some of these advantages may be:
- They allow you to make purchases online , in a more secure way, than perhaps making a bank transfer.
- Participate in promotions , carried out by the entities that issue these credit cards, when making purchases in your company, acquiring the client certain advantages.
- Control of monthly expenses , since in the card statement, you can see all the operations that have been carried out in the period of settlement of the financial product.
- Inclusion of insurance , which is part of the hiring of credit cards.
- Percentage of return of money , since some of these cards, return to the customer a part of the purchases or operations, that they carry out with the use of the card.
However, credit cards carry a great risk , such as making an expense, a capital, which we do not have in our bank account, and which will have to be returned to the entity, so we do not have to take a This form of financing like a toy, since the interest they carry increases if the existing debt remains unpaid, so our repayment fee will increase considerably.
Another disadvantage that these cards entail is the ignorance of not being aware of the payment method that we have contracted, which can be at the end of the month or through installments, although in most cases, payment to The end or beginning of the month does not carry interest implicit, with which the client will pay for the money that he has spent, although it must be made clear that if a deferred payment is made, it will bear interest, so it is important to know how we must return the money used.
Also, you have to take into account the possible commissions, which will be charged for their use, both for debit cards and credit cards, since they tend to be different amounts and characteristics, so you do not have to get a large number of cards, only with those necessary for its use.
With regard to debit cards, it should be noted that it is only a means of payment, when cash is not available, to pay for purchases made, and are linked to the bank account and the balance that appears in the itself, in addition to withdrawing money from the ATM, even making purchases online and even having a free payment at the time of its issuance, by the bank.
It is clear that not everything is going to be advantages for debit cards, since they also have some drawbacks, which do not make them so attractive for the customer, as it may be that it is an instant payment method, so when using it the purchase is made immediately, producing the charge in our bank account, to which must be added the high commissions when having cash, in ATMs not linked to the entity that issues the card, as well as the costs that are linked to the card renewal, maintenance or second cards that are requested.
What is better credit or debit cards
Once the advantages and disadvantages of each of these cards have been analyzed, it is important to take into account, mainly some requirements, that both carry with them, before making a decision, such as:
- The issuance fees , which the cards are associated with, since they are not usually the same in all entities, in addition to including promotions, for which in many cases they are usually free, if you have contracted products with the bank or box.
- ATMs , in which cash can be made available for free, depending on the ATM Network, in which the card is incorporated, so the commissions will be different depending on the network to which it belongs.
- Insurances that are incorporated , when the cards are contracted.
- The possible renewal fees that are associated , since in many cases, the first year is free, although in subsequent years the amount of the fee is paid for the use of it, although it should be noted that these fees can be negotiated by the customer, depending on the "Paydaynow grade" of their bank account.
What is clear that each client will value the use of one or another card model, depending on the financial need they have at all times, assessing the cost that each one of them carries for the issuance and use of it.
You also have the possibility of requesting a credit card without changing banks in other financial institutions that promote the sale of payment instruments as customer acquisition, such as Barclays Bank, Bankinter and especially the large shopping centers that offer a credit card to facilitate the purchases of your customers and that at the same time, these cards are used for all types of operations. Some of the most popular cards, the El Corte Inglés shopping card, which is self-issued, the Affinity card for purchases in the Zara-Inditex group, the pass de carrefour card, the Oney de Alcampo card.
It also has to take into account the issuing group of the plastics of the credit cards, where the best known are the VISA card used by entities such as BBVA, Bankia and the group of 4B cards used by the Banco de Santander Group.