Apart from coins and banknotes, which we referred to in the previous section, in the past years, money has entered our lives for good in the form of payment cards (aka “plastic money”). The three main categories of payment cards, which you will surely have heard of, are the debit card, the credit card and the prepaid card. So let’s go and see some important information about them, which will surely be useful to you in the future!
A debit card is a withdrawal card. With that card we can get money from the ATMs. We can also use it directly for our transactions. The debit card is linked to one of our bank accounts. Every time we “withdraw” money from the ATM or spend an amount of money charging our card, the money is automatically deducted from our account. It is very important to remember that if the purchase we want to make with this card exceeds the money we have in our linked bank account (available balance), then this purchase can’t be made. Finally, the debit card typically has a daily limit on how much money we can take from the ATM or spend on our purchases.
On the other hand, the credit card is a “loan” card. This means that we can buy things and services without having to give the money at that exact time. We pay later, either the full amount or little by little in the form of installments. The bill is delivered to us at home or electronically, usually at the end of the month. It is crucial to know that you have to pay the bill on time; if not, you should pay the bank an extra amount of money every month (interest). Also, for your own security this card has a limit of money that you can spend (called credit limit), so that you never get charged to an excessive extent.
This card, as you already know from your Woli card, is very similar to the debit card. But there is an important difference. It is not linked to a bank account but we “charge” it, we put money in it every time before using it. There is even a predetermined limit of money with which we can charge the card, which we can’t exceed in a single purchase. We use this card both in online and in-shop transactions and it can often be intangible (virtual), simply having in our possession a 16-digit number and the security details to pay online.