Gone are the days of writing checks. When it’s time to cash out, customers reach for their wallets and pull out their favorite plastic money. Plastic rules among consumers, for both convenience and for security.
Debit cards are widely popular in the United States, and banks prefer them because it’s less paperwork to keep up with. With a simple swipe of the card, customers can access funds in their bank account without stopping by an ATM or writing out a check. The funds are automatically deducted from your bank account.
A credit card works like a debit card, allowing customers to make a purchase by simply swiping the card. However, instead of withdrawing funds from your bank account, it adds to the line of credit you have with the bank that issued the credit card. A credit card will work up until you go over your credit line. Credit cards sometimes charge fees to consumers, and you can expect to pay interest on any purchases made.
A gift card is purchased at a particular store, and it works much like a debit card or a credit card. It has the same size and look as a debit and credit card, but it only works in the store that’s purchased. A gift card cannot be used beyond the amount loaded onto the gift card, but consumers can add more money to the gift card to extend its use.
A smart card functions very similarly to a debit card or a credit card, but it offers more bells and whistles. A smart card can link purchases to your bank account, or even to your line of credit with a bank, because all of your financial information is stored on a chip inside the card. You can also use the card to store identification and medical records.