What is a bank card?
A bank card is a payment card issued by a bank. Bank cards let customers access funds in checking or savings accounts, or make purchases against a line of credit. ATM cards, debit cards, and credit cards are all considered types of bank card.
For hundreds of years, banks have been issuing tokens that their customers may use in lieu of cash in order to buy goods and make payments, such as letters of credit. Rectangular bank cards with unique serial numbers are of a more recent vintage, and were first issued by Flatbush National Bank in Brooklyn in 1946, followed by New York’s Franklin National Bank in 1951. These early bank cards were limited to purchases at a short list of local retailers. The Diner’s Club card was created in 1950 for a select group of high-end restaurants, inspiring American Express to launch a similar payment card for business travel expenses.
These early payment cards were made of cardboard, but by the early 1960s bank and charge cards were made of plastic, with raised serial numbers that facilitated the use of carbon copy forms for registering payments. In the 1970s, magnetic strip technology was added to banks cards, and today nearly all bank cards include microchips and data storage to authenticate users and transactions.
Nearly all bank cards carry a Visa or MasterCard designation, regardless whether they are debit cards or credit cards. This designation lets merchants know which company processes the payments for the account. Certain ATM cards that are not debit cards or credits cards do not carry the Visa or MasterCard logo, because you cannot use them for purchases.
There are four categories of bank card:
- ATM cards: These cards allow you to withdraw, deposit, or transfer money from any automatic teller machines. In addition, ATM cards let you get a cash advance, check your account balance, and make a loan payment.
- Debit cards: Combining the functionality of an ATM card and a check, debit cards let you make purchases at retailers and also work as ATM cards. When used as a check, the funds automatically come out of your account.
- Prepaid debit card: A prepaid debit card carries a set amount of money and only allows you to spend the balance on the card. Once the money runs out, you must refill the card.
- Credit cards: A form of revolving loan, credit cards let you make purchases against a line of credit. If the balances is paid off before the end of the month, no interest is charged on the loan. Balances held longer than one month incur interest charges.
Bank card example
Bank of America is the largest bank in the United States. BoA serves approximately 47 million consumer and small businesses with approximately 4,500 retail centers,16,000 ATMs, and an award-winning digital banking unit with nearly 34 million active users. Besides debit cards and some ATM cards, BoA issues the highly regarded BankAmericard Cash Rewards credit card.