There are numerous cards in circulation that differ from one another. It is crucial to understand the many sorts of payment instruments in order to select the card that best meets your needs and, more importantly, to use it effectively. Here is everything you should know.
The different types of credit cards
A payment instrument is typically a card, even if it is dematerialized, that enables cash withdrawals and/or purchases at physical and/or online stores. The cards can be used inside a circuit, which is a collection of banks, physical stores, and online retailers who accept them: we are speaking of payment circuits, with Mastercard, Visa, American Express, and Pagobancomat being the most prominent.
There are numerous payment instruments on the market, with prepaid cards (which can potentially be issued to minors), debit cards, credit cards, and revolving cards being the most prevalent. There are also virtual cards and mobile payment applications.
Each type of card has its unique qualities, and you must select one based on your requirements. Moreover, the prices to be considered can vary: for a credit card, for instance, the annual charge can be significant, whereas with a prepaid card, it is the cost of the top-up that matters most.
We describe the primary characteristics of each card and offer tips for selecting and maximizing their use.
Debit cards
A debit card is usually linked to a specific checking account; in fact, it is the card that is typically issued to the consumer when they open a checking account. There are two circuits on the card: a national Bancomat/Pagobancomat circuit and an international circuit that may be Maestro, Visa Pay, Visa Electron, or Mastercard. With this card, you can withdraw cash from bank ATMs; typically, withdrawals from branches of the issuing bank are free, whereas withdrawals from branches of other banks incur a fee. In addition, these cards can be used to pay in-store and, less frequently, online, unless they are enabled for online purchases and are part of the Mastercard or Visa networks.
The primary characteristic of these cards is that their use is immediately charged to the cardholder’s checking account; if the account balance is exceeded, either the account drops into the red or the transaction is declined. Each has a monthly spending restriction, which is the maximum amount that can be paid online, in-store, or with a withdrawal. Actually, there are two; one for the national circuit and another for the international circuit.
How to Decide Upon a Debit Card
As we have seen, since the debit card is tied to the checking account, its selection is not arbitrary but contingent on the bank’s package. You can analyze the charges using the information contained in the expense disclosure documents on each bank’s website. Specifically, the issue costs, the yearly fee, and the cost of cash withdrawals from ATM of other banks, as well as the fees for payments and withdrawals in areas where the euro does not circulate, must be taken into account.
For additional information, you may find our current account comparison service handy.
Tips for making the most of its use
If you find that the fees associated with your debit card are too high, you can change them by switching your bank and account. Remember that the simple portability of the checking account guarantees that everything will be completed within 12 working days. If not, you are eligible for compensation.
If you use the card for cash withdrawals, utilize the ATM of the issuing bank to avoid paying a fee. In addition, keep in mind that the retailer must always accept the card, even for little sums, and cannot charge any additional costs. Whenever this occurs, please report it here.
Virtual cards
In the realm of payments, information arrives rapidly and quickly follows one another. In the distant future, we will no longer need actual cards; instead, we will pay with our fingerprints or iris. Clearly, while paying online, you do not need a physical card because you only need to enter the payment instrument’s identification codes to complete the transaction.
In addition, there is the option of using payment accounts (such as PayPal) that are linked to the cards and enable online shopping. In addition, cards can already be dematerialized, and there are new service providers offering unique services. In various versions, the smartphone has also become a payment method in stores. As well as the smartwatch. The directive on payment services stipulates the same rights for clients regardless of the payment method employed, even if only virtual codes are utilized. Additionally, the smartphone or smartwatch can be remotely locked, providing an additional layer of security in the event of loss or theft.