Highstreet Banks - These are regular banks, including Barclays, HSBC, etc.
Building Societies - These can be referred to as credit unions in Chinese; they are 'banks' with less substantial funding. Nationwide and Yorkshire fall into this category.
Online Banks - These do not have physical branches, operating only through call centers and online services. First Direct and Smile are typical examples.
Bank cards in the UK can be categorized into several types:
Cash Card: Generally used by individuals with no credit history in the UK. This card can only withdraw money from ATMs, and most are issued by basic accounts. However, some banks also issue Cash Cards with current accounts when the account is first opened, such as HSBC and RBS. Some Saving Accounts also use this type of card, like Citibank and HSBC's Web Saver, which allows easy withdrawals while offering a high interest rate.
Debit Card: Known as a debit card in Chinese, it requires funds to be available in the account for it to be used. Of course, overdrafts do not count.
Credit Card: A credit card, in simple terms, allows you to spend money first and pay it back later. Your credit card will come with a credit limit indicating how much you can spend, along with an interest-free period ranging from several days. If you repay on time, you will not incur any charges; otherwise, interest will be calculated based on the APR (Annual Percentage Rate, typically between 15.9% to 20%). For example, if you borrowed £1000, at an APR of 15.9%, the interest over a year would be £159. Daily, this translates to approximately £0.43. The benefit of credit cards is that they generally offer Internet Shopping Security, meaning if your purchased goods do not arrive, they usually provide compensation.
Charge Card: This is a more premium credit card that typically has no specific credit limit; however, you must pay on time with no delinquency.
Store Card: This goes beyond our scope, but it is still worth mentioning. These are credit cards issued by stores, for instance, Debenhams or Topshop, and can only be used in their shops. Having this card generally provides better discounts, but the interest rates can be quite high (usually ranging from 20.9% to 25.9%).
Bank cards can be categorized based on type, with the most common being Visa and MasterCard, in addition to American Express.
VISA Card Types:
Visa Electron: This is the basic debit card, essentially the same as Solo. However, it is less frequently accepted online compared to Solo, although still more than Solo. It seems Boots used to only accept this, not Solo.
Delta: Delta typically partners with Visa, similar to TSB with Barclays. Their debit cards have VISA on the front but also include Delta on the back. Specifically, this is not a VISA card but rather Delta Visa. The advantage is that it can be used wherever Visa is accepted, though it is not a credit card.
VISA: Smile has already summarized the issues related to credit cards.
Master Card Types:
Solo: This is also the most basic debit card. It is accepted in fewer locations, especially online.
Maestro/Switch: This functions similarly to Delta, acting as a two-in-one card with features similar to Delta.
MasterCard: This is the largest competitor to Visa and is also a credit card company. To attract customers, some places offer discounts when using MasterCard, and at others, they offer Free Gift Wrapping (especially during Christmas at Bicester Village).
Although American Express is accepted in over 130 countries, it is less commonly used in the UK due to the higher acceptance of Visa and MasterCard, and some retailers not accepting it. Therefore, aside from America, it is not considered widely in the UK [besides, their application requirements are quite high].
Additionally, it's important to note that some places selling airline tickets may charge a fee even if you are paying with a Visa debit card. In such cases, you can use Solo or Electron to avoid these extra fees. Therefore, it is advisable to carry a variety of card types in your wallet.
Lastly, I would like to explain Direct Debit, which is a bank payment method. For instance, your mobile payment method is usually through direct debit; this is managed by the payee, and you cannot set it up yourself. You need to request a form from the other party to fill out and sign, and they will contact the bank to assist in establishing it. The amount can vary; for example, this month you may pay £12, and next month it may be £13, but you can cancel it. Another payment method is Standing Order, which you can set up yourself via online banking or by consulting the bank. This is a fixed amount transferred regularly, such as monthly transferring £50 to a savings account.
