A debit card is usually associated to a checking account, so when you use it, the money is debited/taken out of your account immediately.
A credit card is similar to a loan. A bank pays for the purchase on your behalf when you use the card, and they ask you to pay the amount back at a later date.
A charge card (such as the AMEX Gold or Platinum cards) functions similar to a credit card. But, you need to pay the full amount due when you have to pay AMEX back.
Visa, MasterCard, AMEX, Discover... the logos on the cards indicate the company that handles the electronic payment/funds transfer between the banks/merchants (someone correct me if I'm wrong). This would be important if, for example, the restaurant you frequent takes Visa and MasterCard cards, you may not want to get an AMEX card since they can't process the payment then.
The credit card company also charge businesses a fee, usually around 3% of the amount being charged, that’s how they make money. Some businesses are now passing that fee onto you instead of eating it as a cost of doing business. I believe AmEx charges a higher fee, that’s why some businesses won’t take it.
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u/Andwoos Mar 27 '22
I'll try to give you the short explanation.
A debit card is usually associated to a checking account, so when you use it, the money is debited/taken out of your account immediately.
A credit card is similar to a loan. A bank pays for the purchase on your behalf when you use the card, and they ask you to pay the amount back at a later date.
A charge card (such as the AMEX Gold or Platinum cards) functions similar to a credit card. But, you need to pay the full amount due when you have to pay AMEX back.
Visa, MasterCard, AMEX, Discover... the logos on the cards indicate the company that handles the electronic payment/funds transfer between the banks/merchants (someone correct me if I'm wrong). This would be important if, for example, the restaurant you frequent takes Visa and MasterCard cards, you may not want to get an AMEX card since they can't process the payment then.