A Review on types of bank cards
A Review on types of bank cards
1- Credit cards: which allows the holder to obtain credit, the consumer can use it to buy his supplies and then pay back later if he is unwilling to pay all that he borrowed (buy) in any month he is allowed to rotate part of the amount borrowed for the following month and in which case he will pay interest on the debit balance.
Granted flexibility to the owner in the settlement of his commercial transactions, which are cards issued by banks or international finance establishments granted to people with bank accounts and is one of the most famous modern banking services and under this card customers can get a free credit agreed with the bank to pay it after a period and divided into two sections:
1.1. Renewable credit card: These cards came into existence in the late 1960s in the United States of America through two monthly cards Visa and MasterCard, and this type is issued by banks within certain amounts, and in this type the card holder is a choice between a total payment of the card bill during the period of benefit or payment of only part of it, and is paid during a period or later periods and in both previous cases the first loan is renewed to the holder so it is called a renewable credit card and is characterized by providing both time. The effort to carry it, and increases the revenues of the bank issuing it with fees for services or the benefits of delay.
It is called a credit card guaranteed with interest-free deposits, the latter of which is used to ensure the line of credit that the card provides to the customer and is available to unqualified individuals or because they are listed in a low credit bracket due to financial problems.
Renewable credit cards provide great flexibility in financial transactions and provide permanent liquidity to the holder. Examples of renewable cards include:
Internet card: MasterCard and VisaCard have issued a special card for online shopping, as it has a virtual number that is delivered to the cardholder, a credit card for shopping through electronic means in general and with a low withdrawal limit compared to other cards approximately US$2000 in order to reduce the risk of fraud and fraud, and these cards are characterized by:
• Not used for direct purchases, but limited to online purchases or shopping.
• This type of card is limited to a relatively small amount, which reduces the risk to the owner if the card number is identified and used without his permission.
2.1. Non-renewable credit card: Such as the previous card allows this type of card to grant credits to the holder, and the main difference between this card and the previous type is that the holder cannot have an account with the issuing bank and then the individual uses it, then he automatically receives a loan (credit) equal to the value of the item or service and each customer has a maximum loan limit set by the contract and the credit line and the cardholder is obliged to pay the full amount of the bill within a period of not more than 30 days from the date of the date. In the event of procrastination, the issuing bank cancels the cardholder's membership and withdraws it from it, and in general there are four parties involved in the credit card, which is:
World Card Center: A global institution that creates and sponsors the card and approves the membership of banks around the world to participate in its issuance and act as a judge to resolve any disputes between card dealers.
Card source: Banks all over the world where they advertise them promotionally, settling them and contracting with merchants and connecting their ATMs to the world card organization network to facilitate the withdrawal process at any ATM in the world connected to the network.
Merchant: A term that is called companies and institutions with which the source is contracted to accept the sale to the cardholder.
Cardholder: The individual who gets the card to use in his various transactions.
The most important of these cards are:
The bank exchange card (CHARGE CARD): defines this card as a monthly exchange card because the customer must make full payments during the same month in which the withdrawal is made in the sense that the credit period granted by this card does not exceed one month, and therefore the customer does not bear any interest as a result and the first is the green card (AMERICAN EXPRESS).
This card, which allows the holder to purchase on the account immediately to be paid later, does not include any meaning of the credit, but the holder pays the value of his purchases directly once the invoice is sent to him and does not incur any interest in the period between purchase and payment and does not exceed the credit period for a month, since the accounting is carried monthly, and in the event of the customer's delay in payment within the specified period, the bank carries interest between 1.5 and 1.75% per month.
2- Non-credit cards: This type of card is considered the most widespread in the world because it reduces the risk of bad debt sits with card-issuing banks and this type is characterized by the fact that it does not give the customer any credit.
These are cards that are not granted to the owner to make the payment or settlement of his dues unless the funds corresponding to the settlement process are actually available and therefore do not give the owner any credit or loans and these cards are divided into:
1.2. Debit cards: these cards are based on the presence of physical balances of the customer at the bank in current accounts to meet the expected withdrawals of the cardholder customer
If the holder allows the payment of their purchases by withdrawing their current accounts in the bank directly, i.e. instead of borrowing from the source of the cards and paying later as in the credit card, the client transfers the funds belonging to him to the seller (merchant) when using this card. If the card is debited on the line, the transfer of funds is usually made within the same day as the purchase transactions are carried out, but if the card is debited off the line, the transfer takes place within several subsequent days.
This type of card requires a current bank account for the card holder where the use of the card allows the settlement or payment process by enabling the beneficiary (seller) to withdraw funds from the account of the cardholder whose account is supposed to be debited and in case of vice (creditor) the settlement process does not take place, the settlement process requires sufficient balance and cover for the expenses made by the card and this type is divided into:
• International Card: Such as Visa, MasterCard, Amex, Dinzclub, can be used inside and outside the exporting country.
• Local card: Used within the local currency-exporting country.
2.2. Instant debit card: This type of card is used as a loyalty tool only, as the customer must have an account in the bank with a balance, as the bank issuing this card can deduct from it what the card holder receives when using it and the balance of his account must not be reduced from the amount that the credit card can provide, i.e. the maximum credit is the balance of the bank account, so the bank account balance is similar to a cash guarantee. The cardholder has a loan and is not allowed to use it except within the limits of his balance and whenever the cardholder uses it the source of the bank withdraws directly from his account to pay the bill of purchases that reach the bank by the merchant and obviously this card is very similar to the check that is worth paying just to see it and the merchant accepts the value of the goods or services once you see the card.
3.2. ATMs (CASH CARD): have developed significantly to reduce the number of transactions within the bank and then look for a competitive advantage where atms were created to enable the client to withdraw cash from his account at a maximum agreed to its sole function of withdrawing cash from the automatic cash dispensers and automatic windows of the issuing bank and can include other services including checking the balance, making account statement request transfers, requesting and receiving a cheque book..
This card is transferred to its owner the possibility of withdrawing cash from his account up to a maximum agreed through special devices where the client enters his card to the computer which asks him to enter his pin number and determine the amount he wants to withdraw to be exchanged the amount of money and register this amount in the debit side of the customer's account directly.
4.2. Cheque cards (CHAQUE GUARANTEE CARD): and through it the bank undertakes to pay the cheques issued to the customer this bank in accordance with the terms of issuing cards to the customer under certain conditions, and this card usually contains the name of the customer and his signature and his account number and the maximum that the bank undertakes to meet in each cheque written by the customer, and the customer presents the card to the beneficiary and sign the check in front of him..
The beneficiary also writes down a number with the card number on the back of the check in addition to making sure that the card is valid for use, and if these conditions for editing the cheque in accordance with the maximum allowed and writing the card number on the back of the check and the validity of the withdrawal sign, the bank withdrawn is obliged to pay the value of the cheque to the beneficiary regardless of whether there is sufficient balance he has or not.
5.2. Discount Card: This type of card is characterized by no credit, but the value of the transaction is deducted from the customer's bank account immediately as in the case of automated exchange cards, and it is noted that this type of card can be used on the same networks as previous machines and the high rate of use is due to the following:
• The increasing demand from customers and traders and their increased familiarity with them.
• Increasing use of aggressive marketing methods by banks.
6.2. Payment cards: These are cards that entitle the holder to pay for goods and services, where that return is transferred from the customer's account to the merchant's account, so this card depends on the existence of actual bank customer balances, and it is noted that the payment of this card is done in two ways, one directly and one indirect.
The first is to measure the buyer by handing over his card to the merchant who passes the card on the device to make sure that there is a balance for this customer in his bank in order to pay for the customer's purchases, and that the customer entered the pin number in the device and authorized the bank to transfer the amount from his account to the merchant's account, the other way is indirect where the customer provides for His card to the merchant the latter writes down the data on the card (the customer, the name of the authority or bank issuing the card, the card number) on an invoice signed by the customer and consists of several copies of it to the customer's bank or the issuer of the card to pay for the purchases, and then refer to the cardholder afterwards.
7.2. Prepaid cards (STOKED VALUE CARDS): are based on the introduction or installation of a specified amount in the card and the amount is automatically reduced whenever the card is disbursed or used, for example, the telephone call card and the public ride card.
It is also known as this card, which is based on the installation of a specified amount and is used by transactions at different stores by inserting it into a reading machine for these cards and deducting the value of the transaction from the value stored on them such as telephone cards and means of transportation and some of these cards may be limited to use by a single process such as cards used for a special purpose such as telephone card and the reason for the increasing and successive versions of these types of cards it is not easy to reach an accurate count of their current size.
8.2. Cards according to the standard of service provided
Credit card (Affinity card): card specifically designed to bring specific groups to credit for associations, associations or social organizations, encouragetheir use and in return for encouraging members to acquire this type of card, the association receives a commission in percentage of the income earned through the use of the card.
Grace cards (Bonus/double brand card): a plastic card issued by banks or financial institutions in union with commercial or service institutions to their customers or prospective customers to encourage them to deal with banks or institutions, as well as giving customers a reward for their use while the double brand card is granted the same permits, but it is offered by the exporter in cooperation with the retail establishment the source achieves to reduce the marketing costs of the card and increase the number of its campaign sought while the customer benefits from installing its name on the card as a means of promotion.
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