Types of Cards

The industry typically divides up cards by the business of the issuer. So there are bankcards (VISA, Master Card, Discover), Petroleum Cards (SUN Oil, Exxon, etc.) and Travel and Entertainment (T&E) cards (American Express, Diners' Club, Carte Blanche). Other cards are typically lumped together as "Private Label" cards. That would include department store cards, telephone cards and the like. Most private label cards are only accepted by the issuer of the credit card. People are starting to divide the telephone cards into a separate class, but it hasn't received widespread acceptance. (This is just a matter of terminology, and doesn't affect anything important.)

Cards are also divided by how they are billed. Thus there are credit cards (VISA, MC, Discover, most department store cards), charge cards (American Express, AT&T, many petroleum cards) and debit cards. Credit cards invoke a loan of money by the issuer to the cardholder under pre-arranged terms and conditions. Charge cards are simply a payment convenience, and their total balance is due when billed. When a debit card is used, the amount is taken directly from the cardholder's account with the issuer. Terminology is loose - often people use "credit card" to encompass credit cards and charge cards.

A recent phenomenon is third-party debit cards. These cards are issued by an organization with which the cardholder has no account relationship. Instead, the cardholder provides the card issuer with the information necessary to debit the cardholder's checking account directly through an Automated Clearing House (ACH), the same way a check would be cleared. This is sort of like direct deposit of paychecks, in reverse. ACH’s love third-party debit cards. Banks hate them.

Another recent addition is affinity cards. These cards are valid credit cards from their issuer, but carry the logo of a third party, and the third party benefits from their use. There are an incredible variety of affinity cards, ranging from airlines to colleges to professional sports teams.

Most credit card companies offer several kinds of cards:

• Secured cards, which require a security deposit. The larger the security deposit, the higher the credit limit. Secured cards are usually offered to people who have limited credit records—people who are just starting out or who have had trouble with credit in the past.
• Regular cards, which do not require a security deposit and have just a few features. Most regular cards have higher credit limits than secured cards but lower credit limits than premium cards.
• Premium cards (gold, platinum, titanium), which offer higher credit limits and usually have extra features—for example, product warranties, travel insurance, or emergency services.

Credit card numbers. Although phone companies, gas companies and department stores have their own numbering systems, ANSI Standard X4.13-1983 is the system used by most national credit-card systems. Here is what some of the numbers stand for:

The first digit in your credit-card number signifies the system:

 3 - travel/entertainment cards (such as American Express and Diners Club)
 4 - Visa
 5 - MasterCard
 6 - Discover Card

The structure of the card number varies by system. For example, American Express card numbers start with 37, Carte Blanche and Diners Club with 38.

• American Express - Digits three and four are type and currency, digits five through 11 are the account number, digits 12 through 14 are the card number within the account and digit 15 is a check digit.
• Visa - Digits two through six are the bank number, digits seven through 12 or seven through 15 are the account number and digit 13 or 16 is a check digit.
• MasterCard - Digits two and three, two through four, two through five or two through six are the bank number (depending on whether digit two is a 1, 2, 3 or other). The digits after the bank number up through digit 15 are the account number and digit 16 is a check digit.