Banks of today offer a variety of services, products, and offers. One such product is the bank card. A standardized-sized rectangular piece of plastic gives you the power of mobility, convenience, and flexibility to manage your money. You can be given an array of different cards to choose from depending on your eligibility and need. We will examine the various card types provided by banks in this post, as well as their significance.
Why are bank cards important
- There are several circumstances, such as in a restaurant or shopping center, where we might not have enough cash in hand to make the payment. Since banks only function in certain locations and at certain hours, it is not always possible to withdraw money from them. To resolve this, bank issues different types of bank cards. These cards allow the customer to either withdraw cash from the machine or carry transactions 24*7 seamlessly.
- E-commerce has witnessed exponential growth and many vendors demand the full invoice price to be paid before delivery. During such times having a bank card comes in handy. It allows people to make oversea purchases.
- Additionally, bank cards offer security. When dealing in cash, there is nearly always a chance of theft, loss, or money tampering. Every time you want to use your bank card to make a purchase, you must enter your PIN [neumeric password], of the card. This implies that even if your card is stolen, it will be useless until the thief discovers your PIN. You can entirely block your card via your mobile bank application or by directly contacting the bank, which adds a layer of security. In this situation, the card in question is worth nothing more than a piece of plastic, even if the robber manages to figure out your PIN.
Types of bank cards
Debit card
- The debit card is one of the most basic types of card issued by a bank. The only eligibility required to hold a debit card is to open an account in the bank. This card can be issued to even minors who have a minor bank account. The primary purpose of a debit card is to allow consumers to use the money which is available in their bank account.
- The maintenance fee or other fees associated with this card type are typically either completely free or nominal. Since you can only use what you already have there are no worries about accidentally overspending. This is an ideal card for daily use or to give to children and students.
Credit card
- You might be in a situation where you need a certain amount of money at a specific time. You know for sure you will have the money by the end of the month but the need has arrived at the given moment. For moments like these, a credit card comes in handy. As the name suggests it gives you money on credit, which means if your bank account doesn’t have the required amount, the credit card helps you to pay the entire bill. By the end of the month, you pay your credit card bill all at once. Credit card bill includes credit usage, taxes, and bank charges.
- Credit cards compare to short-term loans with predetermined monthly repayment. Given that you must pay the bill each month, if you are granted a credit limit of, say, 70,000 Rs, that credit limit will be made available to you each month.
- There are specific requirements to meet to qualify as a credit card holder, so this card cannot be provided to everyone. You must be at least 18 years old and be financially independent. The bank determines your credit limit based on your income, existing debt, and history of payback. Depending on changes in your monthly income and repayment history, that limit is subject to change.
Forex card
- Forex cards and debit cards share a similar purpose with only one key distinction. Debit cards hold and allow you to carry transactions in your local currency while forex cards enable you to hold various currencies of the world. This is ideal for people who are traveling internationally. It may not be the best option to carry the physical currency of the country you are visiting, mainly because of the restriction on carrying physical cash and secondly, since more and more places worldwide use and prefer digital payment. There are various types of forex cards, based on a person’s needs. You can read about that here.
- Imagine that you want to travel to the US. You will be needing US dollars. You can recharge your Forex card with 500 USD. Based on the conversion rate and other bank charges you will be charged a certain amount in your local currency. Once done, now you have the card with 500 USD which you can use just as you would with a debit card.
Electronic card
- These cards are issued against an OD, which is like taking out a loan against an asset. Based on the valuation of your asset you get a card with a set limit. Henceforth you can continue using it as a regular debit card. Based on the amount you use, you are charged on the account. It allows you to manage the amount of your OD account. In simple words in OD account money may be taken from this account even when the real amount is zero, this is what makes it special. Usually your past credit history is also evaluated in determining the limit on the money which you can get.
Conclusion
There are practically endless choices for you to pick a card. It all comes down to the purpose. Once you know exactly where to use your bank card, it will become easier for you to pick one. Failing to understand your use could lead to picking the wrong card and ending up paying unnecessary fees.
Finally, now that you have a wealth of information about various cards, you may decide to obtain multiple. In this situation, you should also consider a compact card wallet. No problems! We have one suggestion for you. Try this one, which is for all genders and reasonably priced at less than 500 rupees.