Bewildered by
sheer variety of debit cards and credit cards? Here is a breakdown of some of main types of debit and credit cards available:Debit card
You can use a debit card to buy goods and services. A debit card is very much like a cheque, unlike a credit card, you pay for goods straight away and money comes out of your account quickly. The amount you spend using a debit card is immediately deducted from your current account.
A debit card allows you to make purchases whereby money is taken straight from your current account, benefit of a debit card is that your finances are kept up to date immediately, without having to wait for a monthly bill as is case with a credit card.
Your banking institution issues you with a debit card. Debit cards offer less protection than credit cards in event of a billing dispute. In addition, if your debit card is stolen, it is possible that your debit card account could be emptied. Most debit cards have a Switch/Delta/Solo/Electron symbol on them. If you become overdrawn you will pay interest on amount due.
Cash card
This lets you take out money from a cash machine (ATM). To use it, you'll need a Personal Identification Number (or PIN) which your bank sends you. Each time you use your card at a cash machine, you'll need to key in this number.
Credit card
A credit card lets you buy goods and services up to a set limit before you pay for them. A credit card represents a loan agreement where you are offered credit, providing you pay off a minimum amount each month. You can charge purchases up to amount of your credit limit and pay for them later.
If you clear your balance in full each month, you don't pay any interest on money you have spent. But, if you don't, you'll normally have to pay at least 3-5% of balance, and interest will be charged on outstanding balance. Some cards charge you an annual fee.
