What is Credit Card?
A credit card is one of the means of payment and it allows users to pay for goods in shops, and also on the internet. It’s like a type of loan where the money you spend is borrowed from the provider of the card known as the card issuer. It’s mostly Banks that issues the cards on behalf of the company or stores. Till this minute, some people still ask what is credit card. In this article, you’ll know what is credit card and other useful information about credit cards.
There’re lots of reasons why people need a credit card. From this post, you’ll get to discover why you too need a credit card. Not everyone knows about credit card or most of the benefits of credit cards. No wonder People ask ‘’what is credit card?
Who are the Credit card Providers?
Credit cards are provided by financial institutions and banks or other institutions to the card association. The card is issued to the interested individuals known as cardholders.
You can pay for goods and services with the cards with or without money and balance transaction on credit. This way of borrowing money depends on the cardholders promise to pay back as soon as stated.
The credit issuer will create an account for the cardholder for access to access the line of credit. This is what’ll enable the cardholder to make transactions in cash advance.
Credit Card technical specifications
It isn’t enough to know what is credit card. Also, you need to know the technical specifications of credit cards. Credit cards are known to have a standard size, following the standard of ISO/IEC 7810 ID-1 standard. It’s mainly 85.60mm x 53.98mm, and the rounded corners are radius 2.88-3.48mm. So, it’s just the same as the ATM and similar cards for making payments.
Components of a Credit Card
It contains a printed or with good structure embossed Card number called Security Code. The Cardholder name is writing with an inscription on the card and contains expiry date- all of this is what is called the credit card information.
In addition, a credit card carries the logo of the issuance Bank and that of the card network. Credit cards have a computer EMV chip in it as a security feature; you can find this in most of the modern credit cards.
How to Apply for a Credit Card
When applying for a credit card, the issuer uses two criteria in determining the approval of the application and the limit of the credit given to you.
These criteria are:
- Credit history: There’s always a strict check by the card issuer on the creditworthiness of the applicant. If there’s any sign of having a low credit score, there could be an outright refusal.
- Income: The issuer also checks the ability of the applicant to pay off his debts. This is a great determinant of deciding the credit limit that’ll be allowed the applicant.
Credit card issuer gives the consumer the privilege of a continuing balance of debt by paying the particular stated amount. Now if you fail to pay this minimum monthly amount, they’ll charge you interest.
But the card issuer can waive interest if the cardholder pays the complete amount in debt each month or in the interest-free- period in view
The Benefits of Using a Credit Card
There’re other benefits associated with using credit cards. Here are some of the benefits you’ll enjoy using a credible credit card from a trustworthy issuer.
- The credit cards offer an easy way to get access to instant credit
- It can be used for online or any telephone shopping
- It’s generally accepted in an online and offline transaction all over the world.
I must conclude by saying that choosing a credit card is a more credible and easy way to pay for online deals. In this 21st century, it’s the most popular payment system. It’s efficient, reliable, fun and confident to use.