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La Diferencia Entre Las Tarjetas Financieras

The Difference Among Financial Cards

Today, there are a variety of cards that help us manage our personal finances. You may have received offers to apply for credit cards or debit cards by mail or phone, at your favorite store, or at a financial institution such as a credit union. With so many choices, it is difficult to know what the advantages of each card are and how they should be used. Before applying for or buying your next card, learn about the differences and benefits of each.

ATM Cards

The financial institution where you open your savings account may offer you an ATM card to access the funds you save in that account. ATM cards are only for the purpose of depositing and withdrawing funds to and from your savings account through an ATM. These cards typically do not have the logo of Visa ® or MasterCard ® and cannot be used in stores or to pay bills.

Debit Cards

Debit cards resemble credit cards, but the difference is that this card is linked to your checking account. Therefore, every expenditure you make with a debit card is automatically deducted from your checking account. Debit cards provide an additional option to writing checks and can also be used to withdraw funds from an ATM machine or at a point of purchase.   As Ivan Flores, a resident of San Jose, California points out, another benefit is that if your card has the Visa® or MasterCard® logo, it can be used internationally at ATMs or merchants that accept them.

When shopping with your debit card, you can also choose to get "cash back" if you need cash at the time and avoid taking an extra trip to the ATM. It's another convenience of this type of card.

Credit Cards

Credit cards such as Visa® and MasterCard® are essentially unsecured loans. Each time you use a credit card, you are using borrowed money which you must repay with interest. The cost of your expenses multiply as time passes because the interest will accrue if you do not pay off your balance every month.

"I request a credit card because my friends told me it was a good way to build credit and I now use my card frequently to buy gas for my car and clothing and other necessities for my child," says Flores of his credit card.

Credit unions offer credit cards and can help you find an option that is convenient for you. Visit your local credit union to speak with a representative.

Prepaid Cards

Prepaid cards are becoming very popular for people who do not have accounts at a credit union or a bank and seek the convenience of a card. These cards offer the ease of shopping at merchants that accept Visa® and MasterCard®, they allow you to pay bills and make purchases over the Internet. Typically, you must purchase the card and pay certain fees for its use. Therefore, it is important to know what the charges are associated with the card you buy. You may have to pay monthly fees to maintain your card active, for withdrawing cash from an ATM or for inquiring your balance, among other fees. But when you add all of these charges, typically it is more economical to use a prepaid card instead of continuing to pay your expenses in cash or having to buy money orders.

With a reloadable prepaid card, you can load funds to your card through a credit union, direct deposit of your paycheck or by transferring money from a savings or checking account. You can also use the card to withdraw cash at ATMs without having to worry about going over your limit because you can only access the funds loaded onto the card and nothing else. Gift cards are also prepaid cards and differ from reloadable cards because they can only be used until the original balance on the card is depleted. Visit your local credit union to see what prepaid card options they can offer you.

Repurposed by Allison Kane  

Published 10-17-2011


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