As long as your padded bag total thickness including cards stays under the "envelope" maximum thickness listed on the price list it can go as as an envelope price. If it's thicker, it has to go as a parcel.
Eg Large Letter is up to 260x360x20mm
If your padded bag is under 20mm thick it can be sent as a large letter.
No tracking as standard on letters, you used to be able to pay registered to provide tracking, but haven't sent cards for a while so someone else may be able to confirm.