A User’s Guide – Everything to know About Cash Cards Before Applying

Cash cards are an electronic payment card. They can be debit or gift cards or payroll cards. Credit cards are usually not categorized under cash cards. However, some financial organizations offer credit card as cash cards. It solely depends on the issuing institution.

How does a cash card work?

When the user chooses to pay with a cash card, the cashier swipes the card at the point of sale. Over a secure internet connection, the card is validated by the merchant. Validation is checking if the bank allows to purchase using the card. Once the card gets validated, the purchase gets completed and the user can carry the products bought

Merchants should pay fees to the bank to accept the cash cards. This money is added as a revenue to the banks or the financial organization issuing the card. 

For instance, if a Umay+ card is used at Walmart, Walmart has to pay to Umay+.

Are cash cards fee – heavy?

The biggest drawback of using a cash card is that the user is unaware of the fees. The company may not disclose the fees. So it is highly important to choose a transparent financial institution. 

However, recently the scenario has changed. In 2011 to 2016 there were 4300 complaints regarding inactivity fees, monthly fees, transaction charges, overdrafts, fees for balance enquiries, etc. This has changed. New protection rules came into effect from April 1 2019. 

How to choose the cash card according to the user’s lifestyle?

There is variety of cash cards with different benefits. One can always make a quick Google search. Get a low monthly fee cash card if the purpose is same as a debit card. Because most of such cards come with fee waivers. 

Is payroll card a cash card?

A payroll card is the card onto which an employer loads salary every pay day. Therefore, a cash card becomes a payroll card if it is used for salary purposes

Does a cash card hold interest?

A user gets interest from the bank or the financial organization when it comes to prepaid cash cards. The user must pay interest if the cash card is bought as a credit card. With heavy competition, the customer interest rates have become very low. For instance, interest ratesof Umay+ is 18% per year.

How do rewards work with cash cards?

Reward points are awarded to the users every time the card is used. The reward points increase with increase in number of uses and increase in amount being paid with the card. The points can be converted into cash and used for purchasing.

However, some cash cards have expiry period for the reward points after which the points cannot be converted into cash. The reward points for credit cash cards are greater than reward points of debit cash cards. 

Does a cash card need minimum payment?

Yes. However, the principal amount is meagre say 1 – 3% of the cash limit of the card.

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