Cards

Cash, debit, credit and charge cards, ATMs

One of the most important innovations in banking in the last decade or so has been the introduction of cash and debit cards, which are routinely issued to all transaction account holders in Australia.

Cash Cards

A cash card allows you to withdraw up to around $500 per day from ATMs 24 hours a day, seven days a week (provided they don’t run out of money and you have money in your account).

Reloadable ‘electronic cash’ cards with a stored-value (also known as stored-value cards or SVCs) are being introduced in Australia.

Debit Cards

Most cash cards are also debit cards – known in Australia as Electronic Funds Transfer at Point Of Sale (EFTPOS) cards – which are accepted by most retailers and mail-order businesses in Australia and have largely replaced cheques. Over half of all card transactions in Australia are made with debit cards. There’s no limit to the amount you can pay with a debit card, but you must have the money in your account (or have an authorised overdraft). Many retailers, e.g. supermarkets, allow customers to obtain cash (known as ‘cash-back’) when they’re buying goods with a debit card. Many cards can also be used overseas, e.g. Visa or MasterCard ‘EFTPOS’ cards, to obtain cash and buy goods and services, although there’s a charge for obtaining cash.

Credit & Charge Cards

The most commonly accepted credit cards in Australia are Bankcard (Australia’s own credit card organisation), MasterCard and Visa (and affiliates). Most outlets that accept Bankcard also accept MasterCard and Visa. American Express, Carte Blanche and Diners Club charge cards are also widely accepted. All banks, building societies and many credit unions and major retailers, including most department and chain stores, offer their own credit cards in Australia; some stores don’t accept any cards other than their own. Interest rates on store cards are usually very high, e.g. up to double what you pay with Visa or MasterCard. It isn’t always necessary to have an account with a financial institution to obtain a credit card.

The main difference between the two types of card is that with a charge card you can defer paying the bill for a few weeks or months but must pay the total balance outstanding when it’s due (otherwise a penalty is payable), whereas a credit card allows you to defer payment for an indefinite period provided you repay a minimum amount (usually around 2 to 3 per cent of the outstanding balance) each month and don’t exceed your credit limit.

Bills

Most credit cards require you to repay a minimum of $10 or 2 to 3 per cent of the balance each month, whichever is the greater. If you pay the full amount outstanding, you won’t be charged interest and receive up to seven weeks’ free credit; on the other hand, if you repay only part of the balance, you’re charged interest on the full amount previously outstanding.

Automated Teller Machines

The big four banks’ ATM networks are: Autobank (Commonwealth), Flexiteller (National), Handybank (WBC) and Night & Day (ANZ). Some networks are linked so that you can use your cash (and debit and credit) cards in ATMs (commonly known as cash machines) belonging to different banks, giving you access to thousands of cash machines. For example, Commonwealth Bank and WBC are linked, as are ANZ and National Bank. Customers of building societies, credit unions and regional banks also have access through reciprocal arrangements. Most banks and building societies allow a certain number of free withdrawals per month (e.g. eight) from machines belonging to their own network, but there’s a charge (usually at least $1) for using an ATM belonging to another bank or network.