Many millions of consumers use a credit card, but they are often unaware of the exact functions and that there are different types of credit cards. The various credit cards that are on the market can be divided according to different criteria. One criterion is, for example, which services the respective credit card contains. On this basis, the numerous credit cards that customers use today are primarily divided into the three groups of standard, prepaid and premium credit cards. Another possible form of deposit is based on the fact that there are different settlement methods. In this area, the credit cards can be divided into four groups, namely prepaid, credit, debit and charge cards.
Charge card – what is it
The most commonly used credit card variant in Germany is known as a charge card. The charge card essentially means that the dispositions made using the credit card are settled once a month. Up until the time of billing, the customer has the option of using a credit limit and thus a delay in payment. In contrast to this, for example with a real credit card, the customer is given a one-time credit line that he can use as he wishes.
There is no fixed repayment agreement or monthly statement, however, it is often agreed that the open balance must be repaid, for example five percent of the target balance. Another billing variant, which is not particularly common, is the debit card. The debit card works in principle exactly as many customers know from their normal bank card as a MaestroCard. With the debit card, it is so that any disposition made using the credit card is debited to the customer’s checking account just a few days later. Settlement takes place immediately, as is the case with a normal bank card.
Wha is debit cards?
Debit cards are primarily issued to customers who, from the bank’s point of view, do not have a particularly good credit rating, but can still receive a credit card with a limit function. The immediate debiting of the amounts available ensures, above all, that the customer keeps an overview of his expenses and there is a lower risk that payments will accumulate that may not ultimately be balanced can be. The main disadvantage for the customer of the debit card is that there is no delay in payment, as is the case with the charge card described above, for example.