What Is a Cash Card? Definition, How It Works, and Types

What Is a Cash Card?

A cash card is an electronic payment card that stores cash for various types of payments. Cash cards include bank debit cards, prepaid debit cards, gift cards, and payroll cards. They do not include credit cards since credit cards are a form of debt.

Key Takeaways

• A cash card is a payment card that stores cash, such as debit, gift, or prepaid cards.
• Credit cards are not considered cash cards.
• Cash cards are a convenient way for cardholders to make electronic payments.
• Note that Square’s Cash App offers a debit card called a Cash Card.

How Cash Cards Work

Cash cards provide a convenient way for cardholders to make electronic payments. Standard branded cash cards can be used at all merchants where the network processor is accepted. Alternative cash cards may have limitations on their use.

Banking debit cards are the most common type of standard cash card. These cards are typically linked to a bank account and allow cardholders to make electronic payments that deduct cash from the account.

Standard cash cards can also be used at an ATM to withdraw cash. If tied to a bank checking account, cash card ATM transactions are generally fee-free at bank-operated or affiliated ATMs.

Gift cards are another type of standard cash card. These cards are pre-loaded with cash and can be purchased at select retailer locations, grocery stores, and convenience stores. Some gift cards may only be used at specific stores like Costco or Subway. Others, such as Visa, MasterCard, and American Express gift cards, can be purchased in various denominations with a service fee and used anywhere that accepts them.

Types of Cash Cards

Several alternative prepaid cards exist with varying terms and uses. These cards are known as prepaid cards and support the underbanked population by providing a cash card not linked to a bank account. Payroll cards are another type of cash card that employers may provide for their employees.

Payroll Cards

Payroll cards are provided by employers and are an employee benefit arranged through partnerships with prepaid debit card issuers. They allow employers to make scheduled payments to an employee’s payroll debit card.

These payments are a form of direct deposit and provide the cardholder with immediate access to funds. Payroll cards can be easily integrated into an employer’s payroll system and provide easy access to earned wages for employees. These cards carry a balance from month to month and can be used like a debit card.

Square Cash Card

Square is a leading provider of cash cards and prepaid cash card services. Square offers a debit card called Cash Card through its mobile payments application, Cash App. Square’s Cash Card allows users to make all types of electronic purchases.

Square is a leading provider of cash cards and prepaid cash card services. Square offers a debit card called Cash Card through its mobile payments application, Cash App. Square’s Cash Card allows users to make all types of electronic purchases.