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WHAT IS 'A Credit Card'

A credit card is a card issued by a financial company to a user that enables the cardholder to borrow funds to pay for goods and services on the condition that the cardholder will pay back the original amount plus agreed-upon additional charges. The credit company or bank also grants a line of credit to the cardholder from which the cardholder can borrow money in the form as a cash advance.  A credit card’s borrowing limits are usually pre-set according to the individual's credit rating.


Credit cards are also known to have higher interest rates than other forms of consumer loans and lines of credit. Interest on the amount charged to the card usually begins one month after a purchase is made. They remain one of the most popular forms of payment for consumer goods and services, and most every store allows for payment of goods and services through credit cards.

Most Common Types of Credit Cards:

Most major credit cards are issued through banks or credit unions and are usually affiliated with Visa, MasterCard, Discover or American Express. Many credit cards carry incentives that distinguish the cards from each other  and make them more attractive to consumers. With rewards geared towards specific interests, credit cards offer incentives like airline miles, hotel rooms, gift certificates to major retailers, and cash back.

Store credit cards are a type of credit card specifically intended to promote customer loyalty. Often it is easier to qualify for a store credit card than for a major credit card. However, many store cards can only be used for purchases from the retailer that issued the card.  That store loyalty can pay off, and retailers offer their cardholders special discounts or advance notice of promotions or sales.

Secured credit cards are a specific kind of credit card, where the cardholder secures the credit card with a deposit. The deposit ranges generally between 100-200% of the total line of credit. If you were to put down $5000, your line of credit would be between $2500-5000. For consumers with damaged credit, a secured card can help the cardholder rebuild his or her credit, while providing a way to make online purchases and eliminate the need to carry cash. Most secured cards report payments and purchase activity to the major credit agencies, and If the cardholder uses the card responsibly, he might be able to upgrade to a regular credit card in the future.

  1. Secured Credit Card

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  2. Credit Card Funding

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  3. Business Credit Card

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  4. Charge Card

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