Payment Cards Explained from Types to Security

Payment cards come in various types, each with its own unique features and benefits. There are debit cards, which allow you to spend only what's in your account, and credit cards, which let you borrow money from the issuer to make purchases.

Debit cards are linked directly to your checking account, so you can't spend more than you have. For example, if you have $100 in your account, you can only spend $100 with a debit card.

Credit cards, on the other hand, offer rewards and cashback programs to incentivize spending. You can earn points or cash for every dollar you spend, which can be redeemed for travel, merchandise, or other rewards.

To keep your payment cards secure, it's essential to monitor your statements regularly and report any suspicious activity to the issuer. This can help prevent identity theft and unauthorized transactions.

Payment cards have different types, each with its own features. Credit cards, for example, are linked to a line of credit that the cardholder can draw from to make purchases or take cash advances.

In the US, credit cards are usually issued by local banks or credit unions, but some non-bank financial institutions also offer them directly to the public. Most credit cards come with a minimum payment requirement, and interest is charged on the outstanding balance if not paid off by the due date.

Interestingly, in France, the distinction between debit and credit cards is based on when the customer's account is debited for the transaction.

In the US and other countries, a credit card is linked to a line of credit created by the issuer for the cardholder.

Most credit cards are issued by or through local banks or credit unions, but some non-bank financial institutions also offer cards directly to the public.

The cardholder can either repay the full outstanding balance or a lesser amount by the payment due date, but the amount paid cannot be less than the "minimum payment."

Interest is charged on the portion of the balance not paid off by the due date, and the rate of interest and method of calculating the charge vary between credit cards.

Many credit cards can also be used to take cash advances through ATMs, which also attract interest charges, usually calculated from the date of cash withdrawal.

In other countries, such as France, the distinction between debit and credit cards is based on when the customer's account is debited for the transaction.

A debit card debits the customer's account as the transaction is made, while a credit card debits it at the end of the month automatically.

Credit scores or credit history do not exist in France, which means there is no need to build a credit history.

Personal information cannot be shared among banks in France, which means there is no centralized system for tracking creditworthiness.

Debit cards have become a popular choice for many people, and it's easy to see why. They allow you to make purchases directly from your bank account, without having to repay the money later.

Funds are withdrawn from your account with each purchase, so you need to make sure you have enough money in your account to cover the costs. This can help you avoid overspending and stay within your budget.

Debit cards can also be used to withdraw cash from ATMs, making them a convenient option for when you need cash on hand. Merchants often offer cashback facilities, allowing you to withdraw cash along with your purchase.

Debit cards are widely accepted for telephone and internet purchases, making them a great option for online shopping. They're also used for transactions in stores, restaurants, and other businesses.

Merchants usually don't charge a fee for purchases made with a debit card, which can save you money compared to using a credit card.

Payment cards are usually plastic cards, measuring 85.60 mm × 53.98 mm with rounded corners and a unique card number conforming to the ISO/IEC 7812 numbering standard.

They typically also have the cardholder's name, card expiry date, and other security features. Historically, this information was embossed to produce an imprint on multi-part paper forms, and some cards are still produced this way.

The standard size of payment cards is 85.60 mm × 53.98 mm, with rounded corners and a radius of 2.88–3.48 mm, as specified by the ISO/IEC 7810#ID-1 standard.

Here are some of the common types of payment cards accepted by Square:

Charge cards offer a unique payment option, allowing cardholders to pay the full balance shown on the statement by the payment due date. This can be a convenient option for those who can pay off their balance in full each month.

With charge cards, you don't have to worry about interest charges, as they usually aren't applied. However, if you don't pay the full balance, you may face a late payment fee, and in some cases, your future transactions might be restricted or your card could be canceled.

Charge cards typically have no limit on the total amount that can be charged, giving you more flexibility with your purchases.

Payment cards are usually plastic cards, 85.60 mm × 53.98 mm (3.370 in × 2.125 in) and rounded corners with a radius of 2.88–3.48 mm, following the ISO/IEC 7810#ID-1 standard.

They usually have a unique card number that conforms with the ISO/IEC 7812 numbering standard.

In addition to the card number, payment cards typically display the cardholder's name.

The card expiry date is also usually printed on the card.

Some payment cards are still produced with the cardholder's information embossed, which produces an imprint on multi-part paper forms.

Changing Defaults is a straightforward process that can be done on your iPhone or Apple Watch. You can change the default card for Apple Pay on your iPhone by opening the Wallet app and touching and holding the payment card you want to set as your default card.

To do this, drag the card in front of your other cards. This will instantly make it your new default card. I've found this process to be surprisingly easy and convenient.

If you want to change the default card on your Apple Watch, you'll need to use your iPhone. Open the Apple Watch app and navigate to the My Watch tab. From there, tap Wallet & Apple Pay and select Default Card under Transaction Defaults.

Tap a card to set it as your default card. Alternatively, you can open Wallet & Apple Pay settings on your Apple Watch and select a new default card.

Embossing is a payment card feature that was once a crucial part of the processing process. American Express introduced embossed plastic cards in 1959, making processing faster and reducing errors.

The information typically embossed on cards are the bank card number, card expiry date, and cardholder's name. This information was used for manual processing, which involved the cardholder signing the payment voucher and the merchant checking the signature against the cardholder's signature on the back of the card.

Cards that conform to the ISO/IEC 7810 ID-1 standard are embossed. This standard also includes guidelines on embossing, as specified in ISO/IEC 7811. Additionally, card numbering follows the ISO/IEC 7812 standard.

Embossing has been largely replaced by more advanced technologies, but it's still used in some cases for manual processing.

Stored-value cards are a type of payment card that stores monetary value directly on the card. This is different from prepaid debit cards, which are issued in the name of individual account holders.

One major distinction between stored-value cards and prepaid debit cards is that stored-value cards are usually anonymous. This means you don't need to provide personal information to use them.

The value stored on a stored-value card can be accessed using a magnetic stripe, radio-frequency identification, or by entering a code number printed on the card. This makes it easy to use the card for transactions.