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What Is a Cash Card?

Written by, Marija Petkova

Updated September, 6, 2022

What Is a Cash Card? 

Today’s buyers have more payment options than ever before.

In the UK, cash remains one of the most-used methods of payment. But, recent numbers show there’s increasing use of cash cards payments which, according to some financial experts, might eventually make cash obsolete.

But, what is a cash card, how to use it, and is it reliable? 

Read on.

What is a cash card? 

A cash card is an electronic payment chip that gives cardholders access to their financial accounts and funds. Bank debit cards, prepaid debit cards, gift cards, and payroll cards are all examples of cash cards.

How does a cash card work?

Cardholders can use cash cards, like debit cards, to make contactless payments, electronic payments, and withdraw cash from ATMs. Conventional branded cash cards are accepted by most shops and stores.

However, alternative cash cards may be subject to certain restrictions.

When you pay with a cash card, the transaction’s total value will be withdrawn from your bank’s savings cash card account. Cardholders might have to input their personal identification number (PIN) for every purchase or set it to only require a PIN for purchases that exceed certain amounts.  

Some cash cards can only be used to withdraw cash from an ATM, check balances, and use other ATM services. These types of cash cards cannot be used to buy items in retail stores.

Cash vs Debit Card: What’s the difference? 

The main difference between a cash card and a debit card is that a basic cash card generally limits cardholders to withdrawing cash from an ATM.

On the other hand, debit cardholders can use their cards to pay for goods and services in any location that accepts your card’s payment network (Visa, Mastercard, Maestro, and similar). 

Types of cash cards

Whether you’ll be able to use your cash card to make direct payments at merchants or you’ll have to withdraw cash first, depends on the type of card that you have. 

Debit card

If you have a deposit account, your bank will most likely issue you a debit card that’s connected to your bank account. Debit cards are affiliated with a banking system, such as VISA or Mastercard, and are accepted as a form of payment in almost every store in many countries and locations around the globe. Retailers mostly accept debit cards too compared to mobile wallet payments. 

You may be interested in: Do Car Dealers Accept Credit Cards in the UK

You can also use them to get cash from an ATM but they can’t help you improve your credit history.

Gift card 

Gift cards come pre-loaded with money and can be obtained at a variety of retailers, supermarkets, and convenience stores. Some gift cards, such as those from Starbucks or Subway, can only be redeemed at their stores. On the other hand, Visa and MasterCard gift cards can be used anywhere at any retail stores that work with those card providers.

Prepaid debit card

Prepaid cards are similar to gift cards. The cardholder can spend as much as they’ve stored in the card and choose whether they want an open or a semi-closed card. Only banks can issue open prepaid cards where some of them may even offer an account opening bonus.

Cardholders can use prepaid cards to withdraw money from an ATM and make electronic and in-store purchases. They also allow domestic financial transfers, in some circumstances with certain limitations. 

Payroll card

Payroll cards are prepaid cards where employers make scheduled payments to employees. These cards are convenient, provide instant access to funds, can be used at an ATM or any retail store that uses terminals. 

Charge card

Charge cards provide large and often unrestricted credit limits to the cardholder. The main difference between a charge card and a credit card is that a charge card’s costs must be fully paid by the end of each month. 

A charge card can affect your credit score and you’ll need a good credit score to be eligible for one.

Bottom Line 

Credit cards and cash are the most used payment methods in most developed countries around the globe. If you’re not looking for ways to improve your credit score and want to consider other options, you might want to do a little research on what is a cash card and how to use it appropriately, especially if you only need a card to withdraw cash from ATMs and make electronic payments. 

My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.