Types of Payment Cards
There are four main types of payment cards.
A debit card operates much like cash. When a debit card is used the money is deducted directly from the cardholder’s current account. In Ireland, debit cards include MasterCard Debit and Visa Debit. Debit cardholders can only spend funds available in their current accounts.
Debit cards usually also allow for instant withdrawal of cash at ATMs and most offer a cashback facility when making purchases in retail outlets that allow customers to withdraw cash along with their purchase. Many debit cards are now contactless, which means a PIN number is not required for low value purchases.
A credit card is used to makes purchases or to withdraw cash using a credit facility provided by the card issuer. Credit is used up when a purchase is made and made available again once a payment is made. Credit cards have a minimum monthly payment that must be paid by a certain due date to avoid late-payment penalties.
Cardholders may pay their outstanding balance in full, a minimum amount required as outlined in their bill or another amount of their choosing.
The cardholder pre-loads the card with funds via the card issuer and can then spend the value of those funds when using the card. Some pre-paid cards are for single use only while others can be re-loaded. Businesses can accept pre-paid cards in a similar way to other payment cards.
Charge cards work in a similar way to credit cards however cardholders are required to pay off their full balance upon receipt of each bill.
Many cards in Ireland now include contactless technology. Cards that have contactless technology will have the contactless symbol on them. Contactless is a quick, easy and secure way to pay for items up to €30. To make a payment using contactless technology, the cardholder simply holds their card up to a secure reader in a shop. Less than a second later, they’ve paid for the goods. Contactless eliminates the need to insert the card in to the payment terminal, enter the PIN or sign a receipt when paying.
- Convenient and safe
- Reduce the need to carry cash or use an ATM
- Chip and PIN technology makes it difficult for an unauthorised person to use your card
- Payment cards and current account statements provide a record of spending which assist in the management of finances
- Payment cards are widely accepted and thus reduce the need to purchase foreign currency or travellers cheques
- The majority of debit cards provide a cash back facility.
- Payment cards also enable individuals to pay for goods or services on the Internet, over the phone and by mail order
Government Stamp Duty & ATM Withdrawal Fees
Irish residents are subject to stamp duty on credit cards. Stamp duty is no longer applicable to ATM cards and combined ATM & debit cards. However from January 2016, ATM withdrawals are subject to a new Government ATM withdrawal fee. Both of these fees are collected annually by your bank or card issuer on behalf of the Irish Government.
Credit cards: €30 per account (up to 4 cards)
ATM Withdrawal Fee
A withdrawal fee of 12c for each ATM withdrawal applies. ATM withdrawal fees will be capped over the course of a year at €2.50 for ATM cards and €5 for combined ATM & debit cards.