File ITR, invest & save upto
₹46,800 in taxes on the go
0% commission • Earn upto 1.5% extra returns
Reviewed by Nov 11, 2021| Updated on
A bank card is any card issued against a deposit account, such as a debit card or an ATM card. Usually, this term is also used for Visa and Mastercard since the banks issue them, but these are credit cards and are not linked to any depository account. Bank cards have limited use—some can only be used at ATM machines or certain purposes.
Any withdrawals or payments made through the bank cards will result in an immediate change in the balance of the account. This is in contrast to the function of credit card, which issues statements in the name of the cardholder on a monthly basis with certain dues, which must be paid by the due date.
Although payments using the bank card are debited from deposit accounts, purchases can be made as "credit" anywhere that accepts Visa or MasterCard.
Bank cards are used to withdraw funds from ATM machines or make e-commerce purchases. This allows the cardholder to use the funds of the account linked to their cards to complete online transactions or purchases. Banks offer a variety of incentives to cardholders to encourage the use of their bank cards as compared to benefits offered by credit card companies.
Say that a bank offers programs where purchases made with these cards associated with current accounts will fetch a small percentage of cashback. That is a small portion of the money spent each time with the card is added back to the cardholder's savings account.
Most of the bank cards now have EMV chips (that tiny shining chip embedded in your card), which has increased the level of security to save your account from being compromised. This will help keep your money safe from fraudsters. Also, some cards are prepaid cards that are loaded with money, that may be limited to a particular level.