Payment cards are payment instruments issued by payment service providers duly authorised – credit institutions, payment institutions or electronic money institutions – which make them available to holders through a contract.
The holder of a card may, among other operations, make payments for goods and services at point of sale (POS) terminals or over the Internet.
In Portugal, the cards that include the Multibanco brand also allow a wide range of card-based transactions to be performed in the ATMs connected to that network, such as service payments, payments to the State and ‘ATM transfers’.
As a rule, cards are issued with a certain validity period, indicated on each card, usually not less than one year.
The card is valid for the entire period indicated in the validity period and may, as a rule, be used until the last day of the month mentioned on it.
The card is the property of the payment service provider, issuer of the card, which assigns the right of use to its holder, the payment service user.
The costs associated with the issuance and use of the cards (interest, annuities and other fees) must be included in the price of the payment service provider issuing the card.
There are different categories of payment cards, with different usage rules.
A debit card is associated with a payment account (for example, a current account) and allows the holder to withdraw money, make payments, enquiries and, depending on the network used, initiate transfers and other transactions.
When a debit card is used, the associated account is debited by the corresponding amount, which means that this amount is immediately subtracted from the account balance.
A credit card has a previously contracted maximum credit limit.
The credit card allows you to make payments of goods and services and, in some cases, to make cash withdrawals on credit (cash advance operation) at the counters of payment service providers or ATMs.
The use of credit cards for cash withdrawals (cash advance) usually takes place within the maximum credit limit, although it involves the charging of fees (usually a fixed amount per transaction and a percentage of the amount made available), in addition to the possible collection of interest.
When a credit card is used, the holder receives a credit, which is repaid on the date and under the conditions agreed with the card issuer.
To pay a partial amount on the deadline, which implies payment of interest on the amount used and not paid by this deadline.
The general conditions of use of the credit card, including the possibility of a cash advance, must be reflected in the respective agreement.
A deferred debit card is a credit card subtype.
This card is associated with a payment account (usually a current account) and allows you to withdraw cash and make payments for goods and services.
Transactions made with the card are not immediately reflected in the account. The amounts in question are subsequently debited on the date agreed between the holder and the issuer of the deferred debit card, with no interest being payable.
The deferred debit card has a maximum credit limit associated with it.
A prepaid card has an amount available that was previously delivered by the cardholder to the issuer.
As a rule, as long as you have an available balance, this card allows you to make payments and cash withdrawals in a similar way to a debit card.
When a prepaid card is used, the amount corresponding to the operation performed is deducted from the amount available.
Dual or multi-function cards combine debit and credit functions.
A card that has a single function (debit, credit or prepaid) is a single function card, i.e. purely debit or credit card.
As a rule, the dual or multi-function card allows you to perform debit transactions on the associated payment account (on the same terms as simple debit cards) and credit transactions (in a similar way to simple credit cards).
A dual or multi-function card is a co-badged payment card, usually combining a debit payment brand and a credit payment brand (e.g. Multibanco and Visa or Visa Electron and Visa).