In general, there are four types of spending cards available in the market which are credit card, commercial card, charge card and debit card. Your financial background determines your lifestyle and the type of card that best suit your needs. To help you decide better, please read below to find out the differences and some benefits between these types of cards.
1. Credit card
Instead of paying in cash, a credit card allows you to make a purchase using the credit limit available in your credit account. When your bill arrives, it is entirely up to you to either make full payment or any amount not less than the minimum amount or 5% of the total outstanding whichever is higher. Other than that, you will also be charged interest on the total outstanding balance due that you carry in your card.
2. Commercial card
A commercial card is very much similar to a credit card. However, it is often issued for business purposes such as corporate cards, purchase cards, business cards, travel cards as well as entertainment cards. Most of the time, a commercial card provides business-oriented rewards to separate business expenses from personal ones.
3. Charge card
A charge card is the same as a credit card. However, the total amount has to be paid in full and most importantly, you are not allowed to carry any balance in your card. It helps you to control your spending because no interest will be charged. Examples of charge cards in Malaysia are American Express and Diners Club.
4. Debit card
A debit card enables you to make any purchases with the total amount deducted directly from your bank account. This would mean that you must have a deposit account with the bank in order to have a debit card. A deposit account can be either a savings account or a current account.
However, you can only use a debit card for purchases if you have enough balance in your bank account. The good thing is, there will be no interest charges involved.
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