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A
credit card is a system of
payment, 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 user's
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.
As
well as convenient, accessible credit, the cards
offer consumers an easy way to track
expenses,
which is necessary both for monitoring personal
expenditures and the tracking of work-related
expenses and for
taxation
and
reimbursement
purposes. They have now spread worldwide, and are
offered in a huge variety of permutations with
differing credit limits, repayment arrangements
such as automatic payment from a personal bank
account (some cards offer interest-free periods,
while others do not but compensate with much lower
interest rates), and other perks (such as
rewards schemes
in which points earned by purchasing goods with
the card can be redeemed for further
goods
and
services
or
credit card cashback).
Some countries such as the
United States,
the
United Kingdom
and
France
limit the amount for which a consumer can be held
liable
due to fraudulent transactions as a result of a
consumer's credit card being lost or stolen.
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