Debit cards are a fast growing alternative to traditional credit cards. As more people are turning towards financial alternatives due to recent global economic crises, they are also finding it easier to obtain a card. Debit cards are often seen as a cheaper option than a traditional credit card, particularly in terms of monthly outgoings. The following article will discuss the various types of debit cards and how they work.
A debit card is essentially a debit credit card. It works much like the normal MasterCard credit card but instead uses the same system as the ordinary MasterCard credit card, but doesn't have a preloaded balance to the client, instead relying instead on accumulated funds that are held in the account of the client. Each time a payment is made to the client's account is credited with the money. Unlike a regular credit card, debit cards don't charge interest on transactions.
The most common type of debit card is the VISA or MasterCard debit. This card allows the client to make purchases from any participating merchants. The debit card is issued by issuing banks usually with a PIN number issued by the merchant.
A bank issued debit cards can be linked with an online banking service such as PayPal or Interac. This allows clients to deposit funds directly into their account without having to provide a bank routing number and account number. Most debit cards also offer online shopping cart functionality, allowing the client to complete online shopping.
Cashback is also commonly included in the monthly fees of most debit cards. With cashback, the card holder is entitled to receive a certain percentage of the total amount of purchases made each month. The cashback percentage varies from one issuer to another. Some cashback programs are designed for particular retailers, whereas others are designed for customers to enjoy a certain percentage. The cashback percentage is usually set to a specific rate based on the issuing bank.
Some credit card providers may also include cashback in the monthly fees of the card for an introductory period. The cashback value is generally the same as that of debit cards. The only difference being that with a credit card the amount of cashback offered is lower than debit cards. It is important that if the issuer of your card is offering a credit line of credit, you do not opt to pay off the full balance of your credit line immediately because you could run into problems in the future when paying the credit line off.