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Credit/Debit/Travel Cards

Credit Cards. © ALAN SCHEIN PHOTOGRAPHY/CORBIS

debit card states what happens to the bank account when tain information. Smart cards have many uses, but in gen-
the card is used—an immediate subtraction. eral are used for prepayment of an expense, such as when
A common function of the debit card is as an ATM a phone card is purchased. The phone card has so many
card. ATM stands for the Automated Teller Machine that dollars in it that have been paid for in advance of use. As
so many use today. ATMs allow for 24-hour banking. The the card is used, money value is deducted. Other applica-
card holder is able to make deposits, find out bank bal- tions of the smart card are for the payment of tolls and for
ances, transfer money from account to account, and make the purchase of gasoline. In both cases, the card can be
a loan payment. The ATM/debit card can also be used to waved at a reader that will record the toll or the purchase
obtain cash; the amount withdrawn is subtracted immedi- of gasoline. Food plans at colleges and transit cards on
ately from the bank account and thus is another use of a subway systems are other uses of the smart card. Using a
debit card. smart card saves that sudden search for change to pay a
The user of the debit card must take particular care in toll or to make a phone call.
keeping records of expenditures with the debit card.
Unlike the check that usually is recorded at the time of TRAVEL CARDS
payment, the debit card expense has its record in the form Travel cards, also called travel and entertainment cards,
of a sales slip, a register receipt, or a record of an ATM fall into two categories. The first is the charge card men-
withdrawal or deposit. Debit card expenditures must be tioned earlier. A charge card is issued by a firm whose
deducted from the bank account balance by the user in a main product is credit granting in order to purchase a
regular accurate manner to avoid losing track of the service. The first two companies in this field were Diners’
account balance. Club, Inc., and American Express Company. In both
A variation on the debit card is the smart card. While cases, one is issued a card based on a credit check and then
the debit card uses a magnetic strip, the smart card typi- uses the card at designated establishments and with desig-
cally uses an embedded semiconductor to store and main- nated types of firms to pay for services or products. Pay-

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