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Types Of Plastic Money

A credit card is a method of payment and it can make payments on behalf of cash. And you can use your credit card in any time for to buy a product or a service and it’ll be the standard payment method to your merchant or service provider. But it should be an acceptable credit card for that merchant or service provider. And you can get cash withdrawals using your credit card and normally we called it a Cash Advance.

So a credit card is a legal payment method and it’s designed on a standard to accept by the merchants and other banks like a check or a paper money or a coin. You can see cardholder’s name, credit card number and expire date in face side of a credit card and the signature on its backside.

There are three kinds of payment cards based on their payment method. Those are credit card, Debit card and the Charge card.

1. Credit Card

When you do a transaction using a credit card, you don’t need to pay your hard money to merchant or to Credit Card Company instantly. That transaction amount will paid by credit card company to merchant and then you can pay it to credit card company in next month or during your billing period. And credit card company offer the facility of paying your payments during given period and in installments.

To the installments Credit Card Company adds there monthly interests and then you have to pay your balance with their interest monthly. The previous month bill including the interest was the subject of the loan in the following month.

A credit card has the provisions of the limit that applied to all the member depended on the card type (Silver, Gold and Platinum), minimum amount to pay from the total balance of the bill (like 5%, 10%) and if not paid that amount then fall due that was determined. And if not paid during the billing due date bill amount would subjected to the late payment fee as big as certain percentage from minimum amount and some times it will be a fixed amount for a month.

2. Debit Card

To use a debit card you may have a bank account with the credit card company or the bank, because this transaction proceed as like the cash transaction, because of this only if this card holder had the enough available balance to cover the transaction amount can transaction could be only carried out, after the transaction, transaction amount directly credited from the card holders account and debited to merchant’s account in the very same time.

If you use a debit card you can do card transactions if have the balance in your account for the transaction and when you did a sale transaction using the card it is a cash transaction by not using cash but the paying off or payment was carried out by means of reduce (debiting) from the balance of the account of the credit card holder and then increase (Crediting) the account of the merchant as much as the transaction to the manager of the bank.

3. Charge Card

When use a charge card, it could be used as the payment implement of a trade transaction of product or the service. Then the cardholder has to set off the entire outstanding amount fully at the end of that month or in the following month with or without the additional chargers and fees.

Normally, the charge card don’t have the provisions of the credit limit and card holder has to do full payment of all the transactions before the next statement and without used percentage the interest, but card holder not paid full outstanding amount then he has to pay a additional charge called delay fine for his next statement.

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