The different types of bank cards

Bank cards are a very popular payment method, particularly in France (72.2 million were in circulation in 2020). Consumers like paying for their purchases with their bank card: €490 billion were spent in shops and online using this payment method, according to figures from the CB Observatory for 2020.

However, there is actually a wide range of bank cards on offer. Debit card or credit card, systematic authorisation card, prepaid card or dematerialised card: what are their different characteristics?

Payment and cash withdrawal cards

Withdrawal cards are used to withdraw cash from ATMs run by bank networks. It is important to know whether withdrawals are limited to your bank's own ATM network, or whether they can be made from any ATM.

Payment cards are used to pay for purchases in shops or on e-commerce sites. They can also be used to withdraw cash from ATMs.

The account agreement signed between the bank and the customer sets limits for both card types. These are thresholds that must not be exceeded, for both payments and withdrawals.

In pricing brochures, withdrawal limits are expressed over a rolling 7-day period. Payment limits are calculated over a rolling 30-day period. Withdrawal and payment limits can be adjusted, but requests must be studied and approved by your bank adviser beforehand.

Good to know: what is a rolling day period?

A rolling day period is the number of consecutive days between two uses of the bank card. The electronic chip contained in the card records all transactions carried out using the card, going back 7 days prior to the date of a withdrawal, and 30 days prior to a payment being made. If the bank card limit is exceeded, transactions are no longer authorised until the situation is corrected.

Debit and credit cards

Although common usage tends to confuse or lump them together, debit cards and credit cards are two very different types of bank card.

The debit card is the most widely used, and the most widely distributed by banks. It is characterised by the fact that expenses (i.e. debits) are deducted from the account to which it is attached as they are made. This is known as an immediate debit card.

Credit cards are also payment cards. What makes them special is that expenditure is recorded and deducted from the current account balance on a single occasion, on the last working day of the month. Credit cards are the equivalent of what was formerly known as deferred debit cards. The change of name is the result of new regulation on interbank fees (Interchange Fee Regulation or IFR).

Good to know: immediate debit or deferred debit, what should you choose?

Being debited as you go along means that you need to check your account balance more regularly, while grouping all debits together requires having sufficient funds available in your account on the day they are debited. 

However, managing your finances is easier with a deferred debit card, which works like a monthly cash advance. It is an effective way of avoiding overdrafts or dipping into savings to cover unexpected expenses.

There is a difference between the debit date and the cut-off date. The debit date is the day on which the balance is debited for all bank card transactions up until the cut-off date.

For example, if the cut-off date is the 20th of the month and the debit date is the 30th, what happens? On the 30th of the month, your bank will debit your current account for all payments and withdrawals made up to the 20th of the same month.
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Cards with systematic authorisation

A systematic authorisation card (also known as a balance control card) works in a slightly different way. When a payment is made, the payment method checks the balance on the current account. If the balance is sufficient, the transaction is approved. If the balance is insufficient (negative), the payment is blocked.

These types of bank cards have come back to prominence thanks to the offerings of online banks and fintechs. The idea is to make banks more secure, by preventing holders of systematic authorisation cards from spending money they don't have.

Balance control cards are also practical for cardholders, as it is impossible to have a negative balance, and therefore wind up paying fees for unauthorised overdraft. It's a great way of keeping control over your bank account, but there is still the risk of having a transaction cancelled when you pay for a purchase in-store or online.

This type of bank card is an immediate debit card, which can be used in France and abroad. However, split payments are not available, and neither are overdrafts.

Good to know: can a systematic authorisation card be refused?

Yes, in certain instances in which balance control cards cannot be used. This is the case at certain service stations, toll booths, car parks and car rental agencies. Cardholders will therefore need to carry cash for such situations.  
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Prepaid bank cards

The main feature of a prepaid bank card is that it is linked to an electronic money account, not a current account. You therefore need to open a rechargeable electronic money account and top it up via:

• bank transfer;
• credit card transfer;
• cheque deposits;
• cash deposits.

Prepaid bank cards can be used to make payments and withdrawals, on one condition: you can only use the funds available in your account.

To obtain a prepaid bank card, you can go to:

• a tobacconist;
• a convenience store;
• an online payment institution;
• a bank.
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By going through a bank, the prepaid card has the advantage of being linked to a bank account. The cardholder has greater flexibility and is issued with a personal bank account number (RIB in France) and an IBAN, so that he or she can receive transfers (wages, social security benefits, etc.) or set up direct debits (rent, subscriptions, etc.).

Good to know: nominative or anonymous prepaid card?

Prepaid cards marketed by banks are automatically nominative, which means that you have to provide supporting documents (identity, address). Cards purchased from convenience stores or tobacconists may be anonymous. 

However, regulations do not allow deposits of more than €250 per month and per card, as part of the anti-money laundering policy introduced on 1 January 2017. 
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International bank cards

An international bank card allows you to make payments and withdrawals in foreign countries using a currency other than the euro. The cardholder can choose an international card with either  immediate or deferred debit.

These payment methods come with insurance and assistance guarantees covering all or part of the costs in the event of problems arising during a trip abroad:

• medical assistance;
• repatriation assistance;
• rental car insurance;
• hospital expenses insurance;
• flight cancellation or delay insurance;
• theft or loss of luggage insurance;
• legal assistance;
• death benefits.
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Cards linked to revolving credit

This type of credit card is offered by large retailers when you make an in-store purchase, but also by banks, whenever a revolving loan is taken out. Revolving credit is an amount  of money lent by an organisation that is replenished over time.

A revolving credit card can be used to pay for purchases :

• cash, with immediate or deferred debit ;
• on credit, at the interest rate specified in the loan agreement (APR).
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Virtual bank cards

The digital world is gaining ground on the physical world, and the same is true for payments. Several virtual card solutions are available:

• The virtual card is a payment method stored solely on your smartphone to pay for purchases using contactless technology (mobile payment). It has its own details (number, code, expiry date);
• The digital card is a digital copy of a physical debit card, stored on your smartphone;
• A disposable card or ephemeral card is a virtual card (with its own contact details) that can only be used for a single transaction.

Understanding the different types of bank cards is essential to understanding the differences and nuances in their day-to-day use. Technological breakthroughs continue to bring forth innovations to physical bank cards, as shown by the new biometric bank cards that require the cardholder's fingerprints to pay.

Compare the various solutions available (Visa, Mastercard, American Express), bearing in mind your needs. And don't forget: the more you upgrade, the more your bank card will come with attractive services (extended guarantees, higher payment and withdrawal limits, cashback, exclusive offers with partner retailers, etc.).

If you require assistance on the matter, don’t hesitate to contact our advisers who will be delighted to help.

_{(1) https://observatoirecb.cartes-bancaires.com/}

_{(2) Electronic money replaces cash. It is deposited on a remote server (online account) or on an electronic medium (‘swipe’ card, smart card or mobile phone, etc.).}