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Credit cards are cards which are used to pay for items on credit. The debt is incurred, not to the company from which the purchase is made, but to the credit card provider. The credit card holder is then responsible for repaying the debt to the credit card company. Usually this is done via a monthly payment. The borrowing arrangement is very flexible and the debt can continue to exist for a long time. Each month the credit card company will notify the borrower of the minimum amount which must be paid that month. This is typically of the order of 2 to 5% of the total sum outstanding.
Credit cards companies usually charge a significantly higher interest rate on debts than is typical for other debt instruments such as bank loans or mortgages. Despite this, the flexibility of credit card borrowing arrangements makes them extremely popular. Each credit card owner will be notified of a maximum borrowing amount for the card.
Each credit card has a unique number, carries data embedded in a magnetic strip and bears the signature of the borrower. Machines in retail outlets are used to read the information from the card, and sometimes the user must also enter a PIN number to verify that he or she is the card’s rightful owner.
4 Responses to “Information about Credit Cards”
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August 27th, 2008 at 12:49 pm
[...] three times since December and has left it static since the last cut in April. Officials state that credit card providers continue to take in the profits as they increase fees, charges, and rates for consumers, [...]
August 29th, 2008 at 11:03 am
[...] made with a debit card will be deducted directly from the owner’s bank account. In the case of a credit card, the amount of the payment becomes debt owed by the credit card holder to the credit card company. [...]
September 2nd, 2008 at 5:19 am
[...] having a credit card is something that most of people in the past have used because it offers convenience, ease, [...]
September 15th, 2008 at 6:43 pm
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