What is a credit card?

Credit cards

A credit card system is a type of retail transaction settlement and credit system, named after the small plastic card issued to users of the system. A credit card is different from a debit card in that it does not remove money from the users' account after every transaction. In the case of credit cards, the issuer lends money to the consumer (or the user). It is also different from a charge card (though this name is sometimes used by the public to describe credit cards), which requires the balance to be paid in full each month. In contrast, a credit card allows the consumer to 'revolve' their balance, at the cost of having interest charged. Most credit cards are the same shape and size, as specified by the ISO 7810 standard.

Credit cards

I once worked for American Express and we went through an extensive training on different types of cards.

First, you can do a search online to get more information on credit and credit cards.

Otherwise, there are two main types of cards: Credit and Charge. One you can make payments on and the other you pay in full each month.

A credit card is a responsibility as well as a priveledge. It gives you freedom to "pay later" if an emergency comes up or if you need something and don't have the money right then. In example: you're waiting on your paycheck at the end of the week but you need gas in your car (this is ONLY an example) and groceries. A credit card will allow you to get both and then will send you a statement each month with a balance due, minimum payment due on that balance, and what purchases were made, your fees, etc.

The way Credit Card Companies make their money is that they usually charge an APR (annual percentage rate), finance charges and other fees associated with using the card or paying late on the card.

I hope that this at least gives you a general idea of what a credit card is.

• What are the advantages of debit cards over credit cards?
• Why are credit cards dangerous to irresponsible people?
• How do cash back credit cards work?