Banking: Credit Cards and Debit Cards

One of the most popular and mostly used way of banking is the usage of payment cards. A payment card is not only another space-waster in your wallet or purse, but it is your connection to your money anytime and anywhere even, when they are safely placed on your account in the bank. There are two main types of payment cards in slovak finnancial market:
- Debit card
- Credit card
By contrast debit cards are widespread and still more popular than credit cards. Therefore also the offer of credit and debit cards is uneven, with probably every bank offering very similar range of domestic or international debit cards and only a few of them offer credit cards. A lot of people still do not know differences between credit and they even confuse debit cards with credit cards.
In this research I have closer focused on differnces between these types of cards in two banks, which are offering their services in slovak republic: Všeobecná úverová banka and Slovenská sporiteľňa. Debit card – they may be divided into two main types:
- Domestic, non-embossed card – Maestro, Visa Electron
- Internationl, embossed card – MasterCard, Visa
Both of this types have the same characteristics such as: customer able to withdraw money in cash from cash mashines and make clearing transactions in Slovakia, simply use them for paying at stores and shops, or even book an accommodation in hotels. Domestic non-emmbossed payments cards (nc) are Maestro and VISA Electron. With MasterCard and Visa, which are international emmbossed cards (ec), clients are able to take advantages of more using possibilities than in nc. Customers are allowed to withdraw money everywhwere in the world instead of only Slovak’s cash machines and the transactions can be proceeded, without involving cash register connected to the network. Another difference is in controling the right owner of payment card. When is client paying by nc he/she has to enter PIN code, but when paying by ec he/she has to sign the receipt as a documentation. Of course, the terms and conditions are more strict to obtain ec. than nc.

While obtaining non-embossed debit card the client usually has to have only current account in the bank, where is he/she requesting to issue one, the conditions in obtaining embossed debit cards are individual in each bank.
Credit cards allow customers to exceed the zero balance which means that he/she is able to take out money, that the client does not dispose with. This overdraft may be paid off by making one or several payments. The credit limit is set to its credit line automaticaly after the borrowed amount is paid back. The customer’s solvency determine his/her credit line. Of course, there are another determinants such as: the client’s age, employment, annual income and also clients credit history to be considered. In these part of my research I am going to compare and cotrast advantages of my selected banks. Všeobecná úverová banka

Všeobecná úverová banka (VUB) - is traditional slovak bank. It has sufficient exeperience with clearing transactions to provide these services. In 1992, VUB was the bank which brought cash mashines to this country. Nowdays it offers to its customers large variety of both credit and debit cards.
VUB offers to its clients two types of non-embossed debit cards: Maestro and VISA Electron. With these cards customer will be able to withdraw money from cash mashines everywhere in the Slovakia, but any withdrawal made from a cash mashine owned by another bank costs the client 30 SKK.
To obtain or renew a nc., the client should has a current account opened with VUB and must pay 150 SKK per year, as an annual fee. If a customer wants to cancel the card before the 'valid through date', he/she is requested to pay 200 SKK. The scale of offered international embossed card is more various. Client can choose from two basics ec: Visa and MasterCard. For customers with higher satifactory level there is possibility to obtain the following cards:
- silver Visa Business card
- silver Eurocard/MasterCard
- gold Visa card
- gold Eurocard/MasterCard

VUB offers to its clients two main types of credit cards: MasterCard Electronic and MasterCard. MasterCard Electronic is for domestic use only and is non-embossed. On the other hand, there is MasterCard international, which is embossed credit card and the usage is international. It is not necessary to have a current or deposit account opened with VUB. The bank offers the following limit of credit drawings of finnancial resources in intervals:
MasterCard Electronic - credit line range from 15 000 SKK to 40 000 SKK
MasterCard - credit line range from 30 000 SKK to300 000SKK
Both of these types have the same charges. Obtaining of primary and secondary credit cards is free of charge. Client pays annual sum - 360 SKK for administration for MasterCard Electronic and 750 SKK for MasterCard.

If a customer makes overdraft in both credit cards types, he/she has 30 days payment holiday. After these 30 days the client must decide how much money he/she wants to pay back in the first 10 days as a minimum payment. The rest is charged by 1,5% interest at the end of the month. Late payments are charged by interest rate of 29% each month.
VUB also provides credit cards for special clients (VIP): Diners Club Internacional and AMEX cards. Slovenská sporiteľňa
Other bank offering payment cards is Slovenská Sporiteľňa. This bank dispose with strong tradition in the Slovakia. Non-embossed Debit cards issued by this bank are: VISA Electron Euro<26, Maestro including chip, VISA Electron, VISA Classic, MasterCard Mass and exclusive embossed debit cards: VISA Gold and MasterCard Gold.

Non-embossed debit cards

VISA Electron Euro<26
This card is also known as a student card because it is designated for people in the age range from 15 to 26 years and is used as a student ID, too. To obtain this card, a current account in SLSP is needed. Daily limit for cash withdrawals is 15 000 SKK and for non-cash payments is 45 000 SKK. It is issued for 1 year period. Maestro with chip and VISA Electron
These are standard debit cards and a cardholder has to have an account in SLSP. They have the same limits as VISA Electron Euro<26 but its validity is 3 years. Bank offer travel insurance not only for cardholders but also for family members.

Embossed cdebit cards

VISA Classic and MasterCard Mass
Both standard embossed debit cards have daily cash withdrawal limit 30 000 SKK and non-cash payment limit 90 000 SKK. Their validity is 2 years and offer travel insurance also for family members abroad and additional services of IAPA and ECI.

Slovenska Sporitelna also issues credit cards and these are: VISA Excelent Classic, Silver, Gold and Diners Club.

VISA Excelent Classic
Client pays annual sum of 700 SKK. In this amount of money is counted charges for obtaining primary card and leading an account. Secondary credit card is obtained to the client after paid sum of additional 200 SKK. Credit limit period without interest is 40 days but standard interest on unreturned credit is 19 % and sanction interest is 28 %. VISA Excelent Classic has daily withdrawal limit of 30 000 SKK, 90 000 SKK on non-cash payments. Expiry period is 2 years. Conclusion
For choosing the best bank I observe several aspects which should be considered. VUB has more available credit cards for its customers they can choose from and there are also lower conditions.

Interest rates are on the VUB side too. In case of debit cads are withdrawals made from other cash mashines than VUBs are increased by 30 SKK. These charge is in Slovenská sporiteľňa set on 10 SKK, but on the other hand side there are much more chashmashines owned by VUB in Slovakia, so it is on customer which conditions suit him/her better.
If it was up to me, which bank is more suitable to its customers, I would say that Všebecná úverová banka. More informations can be obtained at:
http://www.slsp.sk
http://www.vub.sk
Slovenska Sporiteľňa and Všeobecná úverová banka pamphlets.

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Credit Cards and Debit Cards - VÚB, SLSP