CREDIT CARDS

A Credit Card gives you the power to buy goods or services now and pay for them later. It represents an approval by a bank or company to use their money. Credit card issuers are usually banks, even though the card may bear another company name or logo. The name of the issuer appears somewhere on the card.

A Credit Card is a universal payment method that allows the cardholder to make payments for goods and services and receive cash not only through the cardholder’s own account resources but also through credit from the card-issuing bank. Credit cards are commonly associated with either the VISA, MasterCard or BankCard credit card schemes. But trade names such as VISA and MasterCard are not actually Credit Card issuers. They are termed "membership associations." Banks use them for their payment processing services, policy setting and marketing assistance. Many different banks can package their own credit cards and different terms of credit using the logo and services of an association membership.

A credit card is different from a debit card in that the credit card issuer lends the consumer money rather than having the money removed from an account. It is also different from a charge card (though this name is often used to describe credit cards by the public) in that charge cards do not extend the user credit - the charges must be paid each month in full.

As well as convenient, accessible credit, Credit Cards offer consumers an easy way to track expenses, which is necessary both for monitoring personal expenditures and the tracking of work-related expenses for taxation and reimbursement purposes.

Credit card issuers (banks) cover their costs (including the interest costs for the money that is paid to merchants prior to the bank being paid by customers), and earn profits, by:

Charging interest on outstanding balances

Interchange fees

Fees charged to customers

The terms of a Credit Card issuance vary depending on your credit history. Nevertheless you may be surprised to find significally better rates in some credit card centers.