Credit Card

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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.

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RELATED FAQS
  1. What other sectors are most similar to financial services?

    Typically, the financial services sector allows countries to export goods and turn agricultural and manufacturing products ... Read Full Answer >>
  2. How often is my credit score updated?

    A consumer's credit score usually updates at least once every 30 to 45 days, and in some cases almost daily, depending on ... Read Full Answer >>
  3. What is the difference between a prepaid credit card and a gift card?

    Gift cards are a popular way for a gift giver to ensure the intended receiver gets the desired gift. One no longer has to ... Read Full Answer >>
  4. How is my credit score calculated?

    The credit score, commonly referred to as a FICO score, is a proprietary tool created by the Fair Isaac Corporation. This ... Read Full Answer >>
  5. Are credit cards and debit cards considered debt instruments?

    Consumer debt instruments allow people to borrow money at specific interest rates. In recent years, the credit industry has ... Read Full Answer >>
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