Debit, credit, charge, prepaid - and the commercial cards underneath B2B. They look identical at the terminal, but the money underneath comes from four different places, at four different times, and at four very different prices.
Five cards, one tap. At the terminal they are identical plastic. Underneath, the money comes from five different places: your own balance (debit), the bank's money you repay later (credit), money you must clear in full each month (charge), money you loaded up front (prepaid), or a company's money with paperwork attached (commercial).
Why care? The card type sets the price the shop pays, and it decides whether the payment even goes through. A rewards credit card can cost a merchant roughly seven times what a regulated debit card costs on the same $100 sale. First the machine, then the quiet ways each card type fails.
Same tap, four funding stories. Step through debit, credit, charge and prepaid and watch which account moves - and when.
What each card really is, who profits from it, and why your rewards card is the expensive one.
"Spend what is already yours."
A debit card draws straight on your bank balance. In the US its interchange is capped by the Durbin Amendment for big banks - which is why merchants love it and its rewards are thin. Small banks (under $10B) are exempt and earn several times more. Elsewhere, debit is simply the default account-linked card.
"A loan at the point of sale."
Credit cards let you spend the issuer's money and repay later. The issuer earns three ways: interchange on every swipe, interest when you revolve, and fees. Rewards are funded largely by that interchange - which is why credit costs merchants the most.
"Access, not a loan."
A charge card must be paid in full each cycle - no minimum payment, no revolving interest. Classic American Express and corporate travel-and-entertainment cards are charge products; the value is spending power and float, and the revenue is fees and interchange, not interest.
"A wallet with a card number."
Prepaid is a stored balance: load it, then spend it. It powers payroll, gift, travel and benefit cards - and it brings the unbanked onto card rails. It is not a bank account, so deposit-insurance protection depends entirely on how the funds are held (see Field Notes).
"Cards that carry paperwork."
Purchasing, corporate T&E and fleet cards move business money. They carry higher base interchange but can qualify for lower Level 2/3 rates when the merchant passes line-item data (tax, PO number, item detail) - the B2B optimisation that AP teams live on.
"Whose logo is on it?"
A co-brand card (airline, hotel, retailer) runs on a network and splits rewards and interchange with the brand. A private-label store card is issuer-run and often accepted only at that retailer - the vehicle for deferred-interest promos and a surprisingly large lending business.
Six terms decide what a card costs and whether it works. Learn these and the price tables stop being a mystery.
The card type sets the price. Here is roughly what the same $100 sale costs, by what the customer taps.
Before you even tap, the first digits announce exactly what kind of card this is.
Same tap, five kinds of money — and five ways it goes wrong. Three failures that surprise people, then a tree for the moment a card gets declined at the counter.
Five questions people actually ask about the card in their pocket.
The families up close - the debit cap that landed in court, commercial data, prepaid's many species, and the virtual cards eating B2B.