Explanation of Card Types

Credit card and debit card: The most important difference between the two card systems is the way they are settled. But how and when does the money come out of the account? Is a Mastercard always the same as a credit card and what is the difference between a prepaid and a credit card? Everyone knows about the different types of cards, but what is the real difference? To clear up any confusion once and for all, we would like to give you a brief overview.

Debit card:

Debit cards are the most widely used payment cards in Germany and Europe. If the user wants to make purchases or withdraw cash with one, sufficient "liquid funds" must be deposited in the account linked to it. Put more simply - there must be enough money in the account. Each time a payment is made with a debit card, the amount is debited directly from the bank account.

The debit card is usually understood to be the bank card that one receives from banks or savings banks. Colloquially, it is often referred to as an EC card.

• Girocard: The best-known example is the giro debit card, which is linked to the current account of the respective bank. It is used for cashless payments or to withdraw cash from ATMs. The card can only be used by those who have the corresponding PIN. The Girocard is issued with most current accounts.

The Girocard system is a purely German system, so these debit cards actually only work in Germany. So that customers can also pay abroad with their card, they cooperate with payment systems from Visa or Mastercard, for example: Maestro as Mastercard's debit card system and V-Pay as Visa's debit card system. They allow direct access to the credit balance or the overdraft facility of the corresponding current account and thus payments and cash withdrawals abroad.

The credit card companies MasterCard and Visa also offer their own debit cards. 

• MasterCard Debit and Visa Card Debit: Recently, most banks and savings banks have also issued a debit MasterCard or Visa Card. Here, as with the Girocard, the bank account is debited directly. Compared to a normal bank card, however, these cards offer additional services. With these cards it is also possible to make purchases on the Internet and to use them when travelling abroad. You can identify yourself by online PIN, offline PIN or signature. They combine the cost control of a debit card with the ability to make online payments and worldwide acceptance, which until now was only known from credit cards. Visually, they are based on the layout of a credit card.

Credit card:

Debit cards should not be mixed up with credit cards. With credit cards, the account of the house bank is not directly debited, but the collected amount spent is debited once a month. The user is granted a short-term credit in the form of a credit line, so to speak. Most credit cards can be used worldwide offline as well as online. They offer the possibility of contactless payment through NFC, shopping on the internet, booking hotels, etc.

Important to know: Difference in repayment. Depending on the type of credit card, the corresponding invoice amount must be paid either in total (charge card) or in instalments (revolving card). Depending on the credit card contract, it is also stipulated whether the invoice amount is automatically collected or has to be transferred.


Most known credit cards:

• Classic credit card: With this type of card, the holder receives a monthly bill that is due within the following 30-40 days. So you get an interest-free credit with a very short term. In Germany, this is the most common type of credit card. Nowadays, almost all banks and savings banks offer credit cards when you open or have a current account, but not without checking your Schufa file. As a rule, a credit limit of between 2,000 and 5,000 euros is agreed. 

• Premium credit card: This card is a classic credit card that offers additional services, for example travel cancellation, foreign travel health or luggage insurance.

• Prepaid credit card: This card works on a credit basis, i.e. you can only use the amount that was previously loaded onto the card account, e.g. by bank transfer. As soon as the credit has been used up, payment is no longer possible until the next top-up. This prevents the card from being overdrawn. It is not linked to an account at the bank. They can also be ordered in case of Schufa entries and for minors.