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Bank cards Act. 26 Nov 2020

What types of bank cards exist and how they're different


Bank cards form part of the daily lives of hundreds of millions of people. The keys to  their success are their comfort and simplicity for carrying out all kinds of operations:  cash withdrawals, purchases, payments ...When it comes time to choose one, it is important to know what types of bank cards there are and their characteristics.

Debit cards

These are the most common type of bank cards and the simplest to use. They are associated with a bank account and allow you to pay in both physical and online stores and to withdraw cash at branches or ATMs, along with other features.

The amount of the transaction is automatically deducted from the available balance. Therefore, if there was not enough money in the account, the transaction could not be carried out. For security reasons, the debit card usually has a daily limit associated with it, especially when withdrawing funds from an ATM.

Credit cards

These cards are instruments that allow you to defer a payment when making a purchase, to finance specific operations, or to have money to cover your expenses within a certain time and credit limit. This is the main difference with respect to a debit card, in which the operations are automatically deducted from the available balance. In the case of credit cards, it is not necessary that the amount be available at the time of purchase.

Credit cards allow you to pay a given amount of money in two ways. You can choose the total payment without interest option so that all purchases made with the card are deferred or you can choose the deferred payment option, or postponement of a specific purchase, which consists in paying back the amount of money agreed upon in several installments with interest.

In this case, you can choose a fixed fee to pay each month or, in the case of postponing a certain purchase, set a deadline to return the entire amount. Using this deferred payment method would be like the bank giving you a small loan that must be repaid. So it is wise to use this funding responsibly to be able to meet the fees.

Since it is a financial product, banks usually ask for a series of requirements before granting a credit card. By taking into account the client's profile, the bank will accept or deny its concession based on the risk criteria.

The basic requirements to get a credit card are: being of legal age and having a bank account to direct the payment of the borrowed money, although the conditions vary depending on the needs of the person. For example, if you need a higher credit limit than the pre-set one or more payment flexibility. Another important requirement in order to be granted the card is to have the financial capacity to meet the payment obligations. For this reason, the bank will always make a creditworthiness assessment for responsible lending.

One of the advantages of credit cards is that they are usually associated with additional benefits, such as customer loyalty points programs, travel or theft insurance or the possibility of managing your payment installments.

Revolving or deferred payment cards

This payment method allows you to postpone purchase payments or make cash withdrawals when you use the card. You can choose to pay the amount of the monthly installment or a percentage of the outstanding debt. As you pay, the credit is made available again. Since it's a line of credit, the agreed interest rate and corresponding fees will always be applied, and therefore, there is always a cost.

Prepaid cards

This is a very convenient and useful payment instrument for your daily expenses, online purchases or for withdrawing money from an ATM. This type of card can be loaded with the amount you want to make purchases of products and services, within the limits established by the bank itself.

One of their great advantages is that the user can control expenses, since these cards do not allow spending more money than is available. Prepaid cards can be recharged as many times as necessary.

Virtual cards

These payment instruments are designed to make online purchases, avoiding the use of cash or physical cards. Virtual cards do not have a physical format, but they have an associated series of data for them to operate, similar to those of physical cards, such as the card number, the expiration date or the CVV code (Card Verification Value).

Digitization has taken the field of payment methods by storm. Physical bank cards have given way to mobile payments and other functionalities such as Bizum, and biometric payment has already become a reality as we move beyond the physical. But in any of these means of payment, the instruments behind them are bank cards. That is why it is important to know what types exist and their differences in order to make the best decisions and take care of your financial health.

Aqua, the first card without numbers in Spain

BBVA recently launched a new line of pioneering credit cards in Spain. Aqua is the first card that does not contain card numbers (PAN) or expiration dates printed on them, but features a dynamic CVV code. This reinforces security both for its digital and physical versions since not having this data prevents possible fraudulent use of them.

The card will be issued in recycled plastic, thus fulfilling BBVA’s objective of reducing environmental impact. BBVA was the first bank in Spain to distribute cards made from recycled plastic from various industries such as packaging, printing, automotive and windows.