Because they are simple to use, save time and facilitate access to funds in the accounts, payment cards are ever more present in our lives. The payment card is an instrument enabling, among other things, cash withdrawals, payment for goods or services with delayed payment or payment in several instalments, payment at a point of sale or remotely. What specific services you can negotiate depends, before all, on the type of the selected payment card and on the offer of the specific issuer.

However, aside from the numerous advantages ascribed to the individual type of payment cards, it is important to bear in mind and make enquiries about any costs related to use of the payment card and potential financial risks. Before deciding on the choice of the payment card, it is advisable to consider the choice of the card issuer and its terms and conditions, if you really need a payment card and what you need it for so that when deciding on a particular payment card you can be certain that it will not place unplanned and unexpected additional financial burden on you in the future.

Special attention should be paid to the following:

When considering a decision on submitting an application for issuing a payment card, it is necessary to collect information from more issuers, and depending on the type of payment card you are interested in, you should obtain detailed information on the following:

• all fees associated with the issuing and use of the credit card;
• annual fee;
• fees in the case of loss of payment card and issuing a new one;
• fees in the case of loss of the personal identification number (PIN);
• possibilities and fee for issuing an additional payment card;
• security features of the payment card;
• all possibilities offered by the specific payment card;
• the manner and frequency of submitting bills in the case of credit cards;
• the procedure to be followed when a credit card get stuck in an ATM;
• the conditions for settling obligations in the case of credit cards (such as, for instance, the interest rate) and the consequences of defaulting on bills due;
• type of exchange rate applied in international payments to cash withdrawals abroad, etc.

A payment card is a means of payment and as such should be watched carefully and used in such a way that its security is not compromised. For instance, the personal identification number (PIN) should not be carried together with the payment card or be disclosed to another person. You should also bear in mind the fact that the payment card may only be used by its owner, i.e. the person whose name it bears.

In case of loss or theft of a payment card, you should immediately notify the card issuer who will, following receipt of the notification, immediately block your payment card and prevent its further unauthorised use. The speed of notification of the payment card issuer about such events is extremely important as it diminishes the possibility of costs being incurred and reduces the amount of costs as a result of its abuse until notification of its loss or theft.

IMPORTANT: The use of a card by another person is not permitted. It is in your interest to follow the rules on the security of payment card use as by doing so, you spare yourself unnecessary trouble and greatly diminish potential abuse of your payment card.

Types of payment cards

Cards can be divided into debit, credit and prepaid payment cards. If you use a debit card, your account will be debited immediately upon the incurred cost, while in the case of a prepaid card funds need to be deposited in the account first, and in the case of credit cards, there is some form of delayed payment of the incurred costs. Payment cards are very broadly used because they are accepted at many points of sale in the country and abroad and are often used for Internet payments.

Debit payment card is issued when a transaction account – current or giro – is opened. You can use a debit card to withdraw cash and make purchases up to the amount that is available in the account. It is important to note that the available amount in the account also includes the amount of tacit or authorised overdraft, if it is contracted.

To ensure that you spend only available funds, it is important to keep your personal records on the balance of funds in the account or be informed via the statements and notifications on the balance and transactions on your account, which are provided by your credit institution.

Note: A debit payment card issuer (your credit institution) probably does not charge fees if you use your debit card to withdraw cash at its ATMs, but a fee is very frequently charged if you use ATMs of other issuers. To avoid this type of additional costs, when opening an account, you can select the credit institution that has ATMs in your neighbourhood (in the vicinity of your home or work), but before you use ATMs that are not within the network of your credit institution make sure that you are informed about the amount of the fee that might be charged for the service.

Credit card is a cashless payment system instrument, which may also be used to withdraw cash at ATMs, but its main feature is that it enables purchase of goods and services on credit. Depending on their type, we distinguish between credit cards used for the payment of a purchase in instalments, with delayed payment, in which case the whole amount is charged in the following month, or with a delayed payment but with the obligation to pay only a certain percentage of the amount in the next month, while interest is accrued on the remaining debt.

credit card is issued to a creditworthy consumer whose creditworthiness is assessed by the card issuer. When issuing a credit card, the fees most commonly charged include the one-off paid entry fee, while the annual membership fee is charged for each year of the card usage. Before negotiating the card, check the information on the manner of use and charges, as well as the accompanying costs and fees that depend on the selected type of credit card.

Since the terms and conditions applying to individual credit cards may differ substantially, it is necessary to pay particular attention to the amount of interest charge when using the credit card, the method of interest calculation, the amount of the annual membership fee and the terms and conditions in regard to payment of bills and the consequences which you may have to bear in case of failure to pay a bill on time.

IMPORTANT: The best way to making full use of the advantages and avoid the disadvantages of credit card use is to make a good assessment of your financial possibilities in relation to your wishes and needs. After you decide how to use your credit card, it is important that you understand all its features so that you can manage your costs responsibly.

Usual safety warnings relating to the keeping and use of credit cards

In daily use:

• sign your name on the back of the card;
• do not keep your personal identification number (PIN) together with the card and do not keep it in your mobile phone;
• keep your card in a safe place;
• do not keep all your cards together; and
• regularly check your payment card transactions and report any unauthorised transaction to the issuer.

When making a purchase or withdrawing cash at an ATM:

• when handing your card to the trader to pay for goods or services, make sure that you see your card all the time and that it has been returned to you after the transaction has been made;
• keep a receipt on each transaction made;
• take a copy of the bill paid by credit card and check if you have been charged the right amount;
• check if there is anything suspicious about the ATM from which you decide to withdraw cash;
• check if there is someone watching you; and
• when entering a PIN, protect the keyboard from view with your free hand.

When paying on the Internet:

• be particularly cautious in cases of very large discounts or particularly attractive online offers;
• always read the text written in small print and make sure you pay attention to the text next to the boxes already marked as pre-approved;
• do not respond to e-mail messages where someone asks for your account number, credit card number or date of its expiry;
• keep records of the transactions made and do not keep information on the credit card and PIN in your computer unless you have protected it with a password known only to you; and
• use your safe Internet search engines and avoid making transactions by publicly available computers.

In case of credit card loss or theft or if you suspect that someone knows your PIN or if your card gets stuck in an ATM, immediately contact your card issuer.

Destroy immediately the cards that you no longer use or which have expired by cutting them up with scissors. If you wish to cancel the service of using the card, destroying the card is not enough, you have to visit the card issuer personally and apply for the termination of the business relationship.

Prepaid card

To use a prepaid card, one first has to deposit a certain amount of money that you intend to spend. Once loaded, the card can be used for purchases until your card balance falls to zero. You are advised to get yourself acquainted with the terms and conditions so that you can select the card best suited to your needs and avoid unexpected costs.