Understanding payment methods

Credit cards

Use - To pay for goods or services even if there’s not enough money in your account.

Where - Shops, online or ATMs (you can withdraw cash).

Who - You have to be at least 18 years old to apply for this type of card and must pass credit scoring.

Features -

• You can spend money that you don’t have, but you’ll pay interest if you don’t pay it all back within an agreed time

• If you withdraw cash you’ll be charged interest and a handling fee

• Interest rates can be high, so manage your credit card use carefully 

• Allow you to withdraw currency from an ATM when you are abroad

• Late or missed payments can affect your credit rating

Store cards

Use - To pay for goods or services in a specific shop.

Where - In shops or online.

Who  - People aged 18 or above who pass credit scoring when applying

Features -

• You can spend money that you don’t have, but you’ll pay interest if you don’t pay it all back within an agreed time

• Often high interest rates, so use store cards carefully          

• Operated by finance companies on behalf of the store 

• Late or missed payments can affect your credit rating

Charge cards

Use - To pay for goods or services even if there’s not enough money in your account.

Where - In shops or online.

Who - People aged 18 or above.

Features -

The balance needs to be paid at the end of each month

• Non-payment can mean high charges or the card may be cancelled

• You pay an annual fee for this type of card

• Late or missed payments can affect your credit rating

Pre-payment bank cards

Use - To pre-load money onto a card to pay for goods or services.

Where - ATMs, shops or online.

Who - People aged 18 or above, but some cards are available for younger people (not offered by all banks).

Features -

• You put the money ‘on’ to the card in advance, it cannot be used otherwise 

• You don’t always need a bank account

• There’s generally a charge to apply for or use this service

• Foreign currency cards

• can be used instead of taking cash or travellers’ cheques abroad

Smart cards

Use - To pre-load money onto a card to pay for certain goods or services.

Where -In specific places e.g. for transport, food in school canteens, at PayPoints or for mobile phone top-ups.

Who - Depends on the use e.g. a mobile phone ‘top-up’ card needed for pay-as-you-go phones.

Features -

• You put the money ‘on’ to the card in advance, it cannot be used otherwise

• Re-charged at designated places only, sometimes online

• No need for a bank account

• Various services use these cards, e.g. mobile phones, transport, gas, electricity and even some schools and universities

Gift and voucher cards

Use - A card pre-loaded with a set monetary value, used instead of cash.

Where - In shops or online, but with specified retailers only.

Who - For use by anyone.

Features -

• Sometimes pre-loaded with an amount or sold as a set amount

• Some gift or voucher cards can be reloaded, but not all

• No bank account necessary

• Allows people to choose what they buy

• Sometimes have a scratch panel with a voucher number

• May have an expiry date

• If a company closes before you use them, you won’t get your money back.