What is credit card?
Credit card is a payment card issued to the user (cardholder) to enable the cardholder to pay the merchant for goods and services based on the pledge of the cardholder to the card issuer to pay the amount and other agreed charges.
Card issuers (usually banks) create round accounts and provide credit lines to cardholders, from which cardholders can borrow money for payment to merchants or as cash advances. In other words, credit cards combine payment services with a credit extension.
Comprehensive payment structure in the credit card industry can restrict customer capabilities to comparison stores, helping to ensure that the industry is not competitive and helps maximize industry profits. Due to concerns about this, many legislative bodies have set up credit card fees.
The credit card differs from the charge card, which requires the balance to be fully repaid every month. Instead, credit cards allow users to continue their debt balance, subject to the benefits incurred.
Credit cards are also different from cash cards, which can be used as currency by card owners. Credit cards differ from charge cards as well because credit cards usually involve third-party entities that pay the seller and are repaid by the buyer, while the charge card only defer payments by the buyer until later on.
