What is Check Card? How is it different from ATM and Credit Card

What is Check Card? How is it different from ATM and Credit Card:

Check Cards are payment cards as useful as ATM Cards. Most people keep less cash and more plastic money in their wallet. Because every shop, hotel and service points are accepting online payment. So there is little need of cash. Check Cards are provided by banks to their checking account customers so that they can do electronic payments.

In order to get a Check Card, you must have a Checking Account. If you already own a Checking Account then request your bank or financial institution to issue a Check Card for you. When you pay a bill using your Check Card, the amount will be deducted from your Checking Account. The purpose of having a Check Card is to make virtual payments online and at various shops/stations.

What is Check Card?

Check Card is a type of plastic card issued against a Checking Account. When you open your Checking Account, the concerned bank will give you a Check Card to perform virtual transactions. Every time you swipe your Check Card, the money will be deducted from your Checking Account.

How Check Card is Different than ATM Card and Credit Card

Check Cards are also known as Debit Cards, because the money you spend is immediately deducted from your Checking Account. The Check Cards are neither Credit Cards not ATM Cards. They are much different then both these cards. If you have a confusion about Check Cards, ATM Cards and Credit Cards, don’t worry. Here we will explain the basic difference among all of them in brief.

Difference among Check Cards, ATM Cards and Credit Cards

Sl.

No.

CHECK CARDS ATM CARDS CREDIT CARDS
01 It is issued by bank against customer’s checking account. It is issued by bank or financial institution against customer’s savings account. It is issued by bank to provide facility to spend money on credit.
02 Checking account is must to get check card. It requires a savings account. It requires a savings or checking or relevant account.
03 Amount spent is deducted from checking account. Amount spent is deducted from savings account. Amount spent not deducted from any account.
04 It does not charge any interest on payments. It also does not charge any interest on payments. It charges interest on each payment as per bank rules.
05 There is no need to pay any bill at the end of the month. It does not cause any monthly bill. Amount spent is added to the credit card bill on monthly basis.
06 It does not cost any penalty as the money gets deducted immediately from checking account. There is no penalty as the money is already deducted from savings account. It creates credit card bill. If you don’t pay bill in given time, the bank will charge interest and/or penalty.
07 It has a daily spend limit or up to the balance available in your checking account. It also has a daily spend limit or up to the balance of your savings account. It provides spend limit based on your credit history. The better your history is, the more spend limit you have.

Places to Use Check Cards (Debit Cards)

As a Check Card Holder, you are eligible to use your card to make online and in-store payments. Here we provide the types of stores, stations and outlets which accept bills through Check Cards.

  • Restaurants
  • Hotels
  • Retailer Stores
  • Grocery Stores
  • E-Tailers
  • Pharmacy Stores
  • Concert & Movie Tickets Counters
  • Airline Tickets Counters
  • Gas Stations
  • Book Stores
  • Discount Superstores
  • Shopping Malls
  • Many Other Stores, Shops and Outlets.

Hold on Checking Account and Its Consequences

We will explain the Hold on Checking Account and Its Consequences in three parts as under:

>What is a Hold on Checking Account?

When you make payment using your Check Card, the bill collecting person may create a hold on your checking account. This hold is created in some amount of money that you can neither spend not withdraw from your checking account. The purpose of putting hold is to create security of payment. It may happen at a Gas Station, Restaurant, Hotel or any other store accepting Check Cards.

>How a Hold is Created on Checking Account using Checking Card

Let us understand it better with an example. You visit a gas station to pay the gas bill of $40 using your Check Card. The bill collecting person swipes your check card to accept payment of $40. S/he also puts $100 on hold in your checking account. You don’t know about this hold. Assume you had $250 in your checking account, but now $40 is deducted as gas bill and $100 on hold which is not available to spend.

>How to Prevent Putting Hold on Checking Account

So you have only $110 in your checking account. You cannot spend the money on hold until and unless the hold is removed. If you try to pay $120 at any store, it will be failed due to insufficient balance. It affects so much to your checking account and may cause you pay some charges or penalties. That is why, some financial advisers recommend not to use Check Cards at the Stores/Outlets which create a hold on your checking account.

Disadvantages and Risks of Check Card

Check Cards are issued by Bank with VISA or MasterCard logo to Check Account Holders. If you have lost your Check Card or it’s damaged, you can request your bank to issue a New Check Card. The Check Cards have lots of benefits and some disadvantages or risks. If somebody gets your PIN, s/he can use your Check Card and stole whole money of your checking account.

Thus, you must not disclose your Check Card PIN to anyone. It is also recommended to change your PIN time to time to make it more secure. If you Check Card is lost or stolen, you should immediately inform your bank and request to block it. Check Cards are beneficial in many different ways. But you should use it carefully to prevent any fraud or financial loss.

Updated: March 9, 2019 — 8:33 am

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