Paying with plastic
Once you have a bank account you can have certain cards that make paying for things easier.
Select a card type:
Cash
Debit/chequeCreditChargeStoreLoyaltySmart
They allow you to take cash out of ATMs (cash machines) using your PIN (Personal Identity Number). Cash cards are available with some accounts for young people aged 11 years and over.
Some banks give 11–18s cash cards with the Solo logo on them. This means that you can pay for things in shops and online wherever the Solo logo is displayed.
When you are 18 you can apply for a card that acts as a cash card, and also a debit / cheque card. This looks something like this.
- The long number across the middle of the card is your own personal card account number. This is the 16 digit card number which banks can use to identify your account number. Most cards now have no reference to your actual account number on the card.
- The six digit number is the bank’s sort code – every branch has its own code number.
- Valid from – this is the date from which you can start using your card.
- Expiry date – this is the date when you have to stop using this card. A new one is sent to you automatically when it expires.
- On the back of the card you will see a seven digit number which offers extra security so that no-one else can use your card. When shopping online or over the phone you are usually asked for the last three digits.
- Make sure you sign all your cards as soon as you receive them, otherwise you make it easier for someone else to forge you signature.
This guarantees payments by cheque and makes it harder for someone else to use your cheque book. It also means you can pay for things by taking money out of your account automatically – the money is taken directly from the cardholder’s bank account when a transaction is made with the card. However, if misused they can cause an account to become overdrawn.
If you use your card in a shop or restaurant you can pay using Chip and Pin, if your card has a Maestro symbol like this. Your card will be entered into a small machine which reads the information chip it carries, and you will have to enter your PIN.
Credit cards are issued by banks and building societies who are members of an international payment organisation e.g. Visa or Mastercard.
The card allows the purchase of goods on credit from many different stores. The account can be paid in full each month or by smaller payments, if you don’t pay the account in full you will be charged interest on the remaining balance. You need to be at least 18 years old to apply for a credit card.
Credit cards can also be used to take cash out of ATMs. Interest will be charged as soon as the cash is withdrawn and a handling fee could also be charged.
You can find out more about how credit cards work – and how you can make them work for you - in Credit worthy.
Charge cards are issued by banks or other financial institutions to allow credit payments to be made for goods and services. The balance of the account must be paid in full at the end of every month.
You will also probably come across other types of cards operated by organisations other than banks.
Store cards are issued by individual shops and are operated by finance companies. The account can be paid in full each month or by smaller payments, if you don’t pay the account in full you will be charged interest on the remaining balance.
A store card is used like a credit card to make instant purchases from the store. You can pay the money back over time.
Loyalty cards are issued by individual shops. Every time a customer makes a purchase they get their card swiped and earn points. They can collect these points to earn discounts or rewards.
“Smart cards” can be inserted into a machine, loaded up with money and used to pay for goods or services. When the money is used up, more can be loaded onto the card.
Some schools and universities issue students with smart cards to pay for meals, and some large cities around the world, including London and Hong Kong, use smart cards to pay for public transport.
