Debit / Credit Cards
Debit card
There are three main types of debit cards:
- Visa
- Mastercard
- Maestro
And when people opt to pay with one of these, the money they spend gets deducted straight from their bank balance.
All three varieties of debit card function in the same way: the customer pays with their card through a card machine (via chip & PIN, contactless, over the phone) or online and then the money’s withdrawn directly from their account – usually on the same day but in some cases, it can take 48-72 hours.
Debit cards can be a useful alternative to carrying cash, but research shows people typically spend more on impulse with plastic, as they’re less restricted.
Credit card
Credit cards are used in much the same way as a debit card but the key difference is customers are paying with credit i.e. money they’ll pay back at a later date.
When someone takes out a credit card they’ll be given a credit limit – how much they’re allowed to spend – and when they use it they’re agreeing to pay back the balance plus interest. The three most common credit card issuers are:
- Visa
- Mastercard
- Maestro
With a credit card people can pay online, using chip & PIN, contactless or over the phone. Credit cards can be useful for splitting the cost of higher value purchases but come with the risk of people spending money they don’t have and might struggle to repay.