Whats the difference between a debit card, and a cheque card?

[guest2013-1]

Cheque Cards works and are exactly the same as a credit card.

Transactions when swiping a credit (or cheque card) are exactly the same. It goes into the "Authorization" stage whereby the retailer tells the bank it intends to credit money off of your account into theirs. The bank then authorizes and allocates their portion on your card.

The ONLY DIFFERENCE is, that if you have a R0 balance in your cheque account the transaction fail. With a cheque card (usually underwritten by Visa or Mastercard and looks and acts the same way as a normal credit card) your "limit" is R0 and cannot go into the negative.

With a Credit Card your limit is -R5000 (for example)

So once the authorization goes through and the amount is allocated, it's up to the retailer to "settle" the transaction. For example, if you purchase goods with kalahari.net with your cheque card (OR credit card) the amount of R200 (assuming that's the price of the goods) gets "authorized" to check if you have enough funds available. The bank says "sharp, this bro has R250 available in his cheque account (or R250 credit available in his credit card) and we're going to put aside R200 so this ******* cannot spend more than we allow him to or his account allows"

Now, once kalahari.net then ships the book or CD to you, only then do they "settle" the amount and it then reflects as a valid payment off of your account.

If you went to pick'n'pay for example and bought a dildo, the amount would usually be settled immediately as you have the goods in hand when leaving the shop.

Now, with credit cards you get R0 per swipe. The only reason for this is because they nail you on interest, so they don't care how much you swipe!

IMO, getting a cheque card is best. You have the normal access of a credit card which you can use anywhere and you have a better "grip" on your accounts. Credit cards can run you in very quickly, whereas having the cheque card can't.

The cheque card does incur a per swipe fee depending on the type of account you have. So make sure you ask the bank what the monthly fee you pay them is for.

I have a Standard Bank Achiever account and I get 10 "swipes" (counts with internet transactions) free. Which is more than enough for me to do my monthly stuff if I have to. Otherwise I debit order or EFT.

It also makes me think twice in swiping my card because I know there's going to be an extra charge if I swipe like a demon-crazed-woman-on-a-shoe-shopping-spree

Can't really see the confusion caused by this as it's clear when reading the details and asking the bank these things

 

[guest2013-1]

I think that's the case.

You also pay interest on credit card payments, while on the overdraft facility on a cheque account, you don't.
A credit card has a flat fee per month, while a cheque / debit / current account is charged per transaction.

Other than that, I think they're nearly identical...

Actually you do pay interest on this, but not as much as you would a credit card. Also, the minimum payments of a credit card means, if you pay it off at minimum, you'll probably take 3-12 years depending on your credit limit to pay it off.

Overdraft has certain fee's associated with it (I can only say from Standard Bank perspective) which is R21 (to use the facility) and the monthly interest paid for being in your overdraft. At roughly R35000 you will be paying around R700 a month in interest.

Remember, there is fundamentally nothing different between the two cards. And we're just splitting hairs now with the overdraft facility and speculating about the man in the moon.

Technically you can have a debit card (Visa Electron) on the same account and also spend well into your overdraft facility. Except, your debit card won't be accepted by millions of retailers worldwide etc etc etc etc.

 

[Smooth Criminal]

To add to what others have said:
If you have an overdraft facility, you can go below zero.

A cheque account will also allow you use of a cheque book. Cheque cards work in exactly the same way as credit cards do. It even contributes to your credit record if you have an overdraft facility. Although you don't typically earn interest on a cheque account as you do with a debit balance on a credit card.

The type of price plan you decide on your cheque account will decide how much you get charged per transaction.

It's already been mentioned that cheque cards are linked to Visa or Mastercard, and therefore offer you the protection. But the card also looks identical to a credit card. It has a CVV number and all the details are elevated, not printed on some piece of plastic that later wears off. You can have a debit card linked to your cheque account, but good luck trying to buy online or from retailed who don't accept Maestro/Electron.

 

[genetic]

Thanks for clearing that up .. It can get confusing very quickly!


I just got my cheque account opened at Standard Bank last week. They gave me my debit card, just waiting for the Visa Electron card...

 

[Smooth Criminal]

Thanks for clearing that up .. It can get confusing very quickly!


I just got my cheque account opened at Standard Bank last week. They gave me my debit card, just waiting for the Visa Electron card...

Why didn't they give you a cheque card? Are you a foreign citizen? It's so much more convenient man, ask them to order one for you.

 

[genetic]

Why didn't they give you a cheque card? Are you a foreign citizen? It's so much more convenient man, ask them to order one for you.

I'm 100% South African. They gave me the debit card at the bank, they said I'd have to wait 7 days or so for the Visa card.. Not sure why it's a Visa and not a Master Card..

It's a business account though, so I'm not sure if that has anything to do with it?

 

[Zwieback]

If you manage your finances well, then a credit card is the best option. If you pay the full balance every month you can essentially get your purchase interest free for a few weeks. Also, their can be significant benefits with a credit card. I have a Discovery Card, and get 6% back from Pick 'n Pay, 10% from Cape Union Mart and many others. Further to that I earn miles which can be used to buy products or vouchers. All in all I probably get an average of 5% back on all my purchases every month.

 

[Smooth Criminal]

I'm 100% South African. They gave me the debit card at the bank, they said I'd have to wait 7 days or so for the Visa card.. Not sure why it's a Visa and not a Master Card..

It's a business account though, so I'm not sure if that has anything to do with it?

Oh ok, so the debit card is just so that you can use the account in the interim until your Visa card arrives. It took about 3 days from the time they ordered mine until it was ready for collection. They should send you an sms telling you that it's arrived (not sure if std bank does that though).

 

[guest2013-1]

If you manage your finances well, then a credit card is the best option. If you pay the full balance every month you can essentially get your purchase interest free for a few weeks. Also, their can be significant benefits with a credit card. I have a Discovery Card, and get 6% back from Pick 'n Pay, 10% from Cape Union Mart and many others. Further to that I earn miles which can be used to buy products or vouchers. All in all I probably get an average of 5% back on all my purchases every month.

Yes, I'd recommend using a credit card if you can manage your money (which most cannot) and if that credit card has some kind of benefit (like you mentioned)

HOWEVER

NBNBNBNBNB!

If you have a cheque card, your purchase is still interest free because you didn't go into credit to make the purchase. It's from money you already have in your bank (forget about overdraft's here for a second)

If you have R100 in your bank, you can only spend R100 with your cheque card. Nothing more (definitely less) so by fooling yourself into thinking you're making a good decision by buying "interest free" and paying the full balance... na-a... does not work that way.

The reason why you get more interested earned on debit in your credit card is because the interest rate charged on credit in your credit card is so ****ing high... rather get a savings account if you need to save some cash.

I would highly recommend not getting a credit card

The NCA act requires all creditors to take into account the total credit you can incur before issuing a lone. Gone are the days of having to open a few Edgars accounts or getting a credit card to "create a credit rating"... it works differently now.

That unused credit card you have lying around that has a nice R50k credit limit on it ways against you when it comes to anything you'd like to do and it weighs against you in terms of credit score... yes... unused... because you CAN incur that much credit if you wanted to.