Updated on Thursday, July 30, 2020
A bank card is a type of payment card issued to you by your bank or financial institution, and it can be used to access the funds in your checking account, savings account or line of credit. Bank cards can include debit cards, ATM cards and credit cards. In other words, bank cards are a financial tool that make it possible for you to purchase everything from your morning coffee with a simple swipe to airline tickets online.
As the name suggests, bank card are payment cards issued by your bank or financial institution, giving you easy access to the funds you hold or to borrow funds from that particular financial institution. Bank cards can be used to make payments at stores or online, or to withdraw money from an ATM.
The most common types of bank cards are debit cards, ATM cards and credit cards.
Bank cards give you either immediate electronic access to the funds in your deposit account, or they allow you to immediately borrow funds via a line of credit, enabling you to make purchases. When you make a purchase with your bank card, funds can be instantly deducted from your linked account (such is the case with debit cards and checking accounts), or you will be required to make a minimum monthly payment on your line of credit (like with credit cards).
Depending on the type of bank card you have, you might be prompted to either enter a PIN, insert your cardâ€™s EMV chip into the machine reader or select whether you want to make the purchase via debit or credit when you use it. These are all safety measures designed to minimize fraud and theft.
When you receive your bank card, you will likely notice a logo on the card associated with a payment network, such as Visa, Mastercard, American Express or Discover. Serving as a middleman, these companies take care of processing the payments you make with your bank card. Whether you have a debit card or credit card, you will have a payment network associated with your card.
While the specific features of bank cards vary based on type, they typically share the following core characteristics:
In general, bank cards are safe methods of payment. There are differences in safety among the different types of bank cards, though.
Credit cards are often considered the safest mode of payment under the bank card umbrella. By law, your maximum liability for credit card fraud is $50. Meanwhile, if your debit card gets stolen, the thief could drain your entire checking account and potentially even put you in the red, racking up overdraft fees. With debit card fraud, you can be fully liable for fraudulent activity and charges if you do not report your card as stolen within 60 days of receiving your statement.
ATM cards boast the same safety features as debit cards. You generally are liable for up to $50 if you report your card as stolen within two days, up to $500 if you report it within 60 days and the entire amount if you wait more than 60 days to report a stolen card.
While credit cards may reign supreme in terms of safety, no matter how you slice it, bank cards are a much safer and realistic way to make everyday purchases compared with carrying around a stash of cash.