Table of Contents
Table of Contents

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 may 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 rather than cash.

Key Takeaways

  • A cash card is a term for a payment card that stores cash, such as debit, gift, or prepaid debit 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 that's called a Cash Card.

How Cash Cards Work

Cash cards provide a convenient way for cardholders to make electronic payments. Standard branded cash cards are typically allowed for use at all merchants where the network processor is accepted. Alternative cash cards may have certain 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 at a financial institution. They allow a cardholder to make electronic payments that deduct cash from a bank account.

Standard cash cards can also be easily used at an ATM to withdraw cash from an account. If tied to a bank checking account cash card ATM transactions are generally offered without fees if made at a bank-operated or affiliated ATM.

Gift cards are another type of standard cash card. These cards are pre-loaded with cash and can be purchased at certain retailer locations, grocery stores, and convenience stores. Some gift cards may only be used at a particular store such as Costco or Subway. Other gift cards, such as those offered by Visa, MasterCard, and American Express can be purchased in various denominations along with a service fee and can be used anywhere that accepts these cards.

Types of Cash Cards

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

Payroll Cards

Payroll cards are a type of cash card that can be provided by an employer. Payroll cards are an employee benefit that employers arrange for through partnerships with prepaid debit card issuers. They'll allow an employer to make scheduled payments to an employee’s payroll debit card.

These payments are a simple 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 while also providing easy access to wages earned for the employee. These cards carry a balance from month to month and can be used the same way as a debit card.

Square Cash Card

Square is one of the leading providers of cash cards and prepaid cash card services. The name of Square's debit card that it offers is Cash Card. This service is provided through Cash App, Square’s mobile payments application. Square's Cash Card allows users to make all types of electronic purchases.