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A credit card is essentially a plastic card that entitles the holder to borrow money from the issuer, usually at the point where the credit card is used.  Credit cards are a type of unsecured personal loan between the credit card issuer and the credit card holder. 

Typically, a credit card is used at the point of sale as a means of paying the seller for goods or services in lieu of payment by cash or check. Because of their ease of use, credit cards have become one of the most popular payment methods in the United States.

Credit cards are issued by financial institutions such as banks, but also may be issued by retailers and oil companies for store-specific use.  General-purpose credit cards, such as Visa and MasterCard, have been around since the 1950s, when technology advancements made efficient management of the entire payment and collection process possible for the credit card issuers.

Credit cards companies have standard terms for the loan agreements they have with their customers.  Frequently, an annual fee is charged for use of the card.  Interest is charged for any outstanding balance at the end of the charge cycle, which is usually one month, although not necessarily corresponding to the calendar month.  Most credit cards have an upper limit, determined by the customer’s creditworthiness.  Finally, since credit cards are a form of unsecured credit, they are riskier loans for financial institutions, and so their interest rates are normally considerably higher than other types of loans.   

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