Different Types of Bank Card
There are many different types of debit and credit card available and without the relevant knowledge it can be hard to distinguish between them all.
Our quick guide will go through all of the basic types of card you can get, helping you identify them so you know exactly what you should and shouldn’t do with your plastic.
Types of Card – Payment Processing Companies
Whichever kind of card you’ve got, and whichever card provider you’re with, you can and should take note of the electronic payment processing company that your card is operating with.
The big three processing companies are Visa, MasterCard and American Express. You’ll be able to see easily which you’re with by just taking a look at your card, which will have the processor’s logo clearly displayed on the front somewhere.
Each of these networks will have slightly different coverage, with Visa and MasterCard being more or less universally accepted, while American Express card holders will find their use somewhat more limited.
Within the UK, you’d be hard pushed to find a cash machine that won’t accept both Visa and MasterCard but once you head abroad, it becomes less certain. If you are going on holiday, it’s a good idea to take a Visa and a MasterCard where possible.
Types of Card – Debit and Credit Cards
The two basic types of card available are debit and credit cards.
Put simply, debit cards are attached to a bank account and allow you to spend existing funds, whereas credit cards allow you to spend credit that you then pay back at a later date.
They also differ in terms of intended usage:
Debit cards should be used for both cash withdrawals and in-store payments, whereas credit cards should only be used for the latter.
You will generally be able to withdraw cash with your credit card and this is known as making a cash advance. However, doing so will come with hefty charges and so you should only really ever do so when it is absolutely necessary.
Credit cards are great for making large purchases for two reasons. Firstly, they allow you to spend money you don’t have, meaning that you aren’t constrained by timing of pay cheques and you don’t have to save up for as long a time in order to buy expensive things.
Secondly, payments made on a credit card worth £100 to £30,000, are protected under Section 75 of the Consumer Credit Act. This means that if, for example, you make a payment online and your desired product never arrives, you should be able to claim the money back from your bank or credit provider.
Both Visa and MasterCard offer credit and debit cards.
MasterCard’s debit cards are usually branded as Maestro, though sometimes you will just see the word debit under the MasterCard logo.
Visa debit cards will also display the word debit under the Visa logo, though they also operate Visa Electron debit cards. Visa Electron debit accounts generally do not offer overdraft facilities, though this is the only real difference between them and conventional Visa debit cards.
Aside from the word debit printed on the card, another way to identify a debit card as opposed to a credit card is that they often have your eight digit account number and six digit sort code printed on the front.
Types of Credit Card
While debit cards all function in more or less the same way, the same cannot be said when it comes to credit cards. Credit cards vary greatly with different types of card available to suit different purposes.
Below, we’ll go through a few of the main types of credit card available:
- Standard Low APR Cards
- Credit Building Cards
- Reward and Cash Back Cards
- Credit Card Summary Box
The most basic type of credit card available will be a standard card with the lowest APR possible. APR, or annual percentage rate, is essentially the cost at which you borrow money from the credit card issuer.
To get the best APR, you’ll need a solid credit rating. If you have either a poor or limited credit rating, you’re probably better off with a credit building card.
Credit builder cards are designed to help people improve their credit score when their existing one is either bad or limited.
They tend to come with low credit limits (that is, the amount you’re allowed to borrow at any one time), and high APRs. This is to promote responsible use of credit. The idea is that as you use a credit building card and pay back the balance on time, your credit rating will get steadily better and better.
This will allow you to take out better, more useful forms of credit in the future, from low APR credit cards to high LTV mortgages.
Another type of card available to those with decent credit scores is the reward card. These cards come in various shapes and sizes; the common thread between them is that they earn your rewards or perks in return for spending money using the card.
The most popular reward cards offer you points that you can then redeem on international flights, though some will offer cash back and some totally different perks.
Head over to our credit card comparison page and click on the reward cards section to see what benefits you could enjoy by taking one out and spending.
If you’re still unsure as to the exact nature of your credit card, have a look at your credit card summary box. This is a standardised form of displaying information that is followed by all credit card providers and will tell you everything from your APR and other interest rates and fees to any rewards that you’re earning by using your card.
Compare Credit Cards
To get the best credit cards, regardless of the kind of card you’re after, use our credit card comparison service and we’ll show you the best cards available in each category.