Credit Card

AAA

DEFINITION of 'Credit Card'

A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating.

INVESTOPEDIA EXPLAINS 'Credit Card'

Credit cards have higher interest rates (around 19% per year) than most consumer loans or lines of credit. Almost every store allows for payment of goods and services through credit cards. Because of their wide spread acceptance, credit cards are one of the most popular forms of payment for consumer goods and services in the U.S.

RELATED TERMS
  1. Credit Agency

    A for-profit company that collects information about individuals' ...
  2. Prepaid Credit Card

    A card issued by a financial institution that is preloaded with ...
  3. Credit History

    A record of a consumer's ability to repay debts and demonstrated ...
  4. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), ...
  5. Average Daily Balance Method

    A credit card accounting method where interest charges are based ...
  6. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
Related Articles
  1. What is the difference between a prepaid ...
    Credit & Loans

    What is the difference between a prepaid ...

  2. How To Dispute A Credit Card Charge
    Credit & Loans

    How To Dispute A Credit Card Charge

  3. Drawbacks Of Travel Reward Programs
    Budgeting

    Drawbacks Of Travel Reward Programs

  4. 8 Tips To Help You Control Holiday Spending
    Budgeting

    8 Tips To Help You Control Holiday Spending

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center