Glossary
Credit Card
A credit card is a type of payment card issued by banks and financial institutions that allows cardholders to borrow funds within a pre-approved credit limit to pay for goods and services. Credit cards enable consumers to make purchases both in-person (Card Present or CP transactions) and remotely (Card Not Present or CNP transactions), such as online or over the phone. The flexibility offered by credit cards extends to various payment contexts, making them a staple financial tool globally.
Key Features of Credit Cards:
Usage of Credit Cards:
Credit cards are essential for building credit history, managing cash flow, and accessing short-term credit quickly. However, responsible management of a credit card is crucial to avoid high interest costs and potential negative impacts on credit scores due to missed payments or high credit utilization ratios. For many, they offer a convenient way to manage personal finance, earn rewards, and handle unexpected expenses, provided they are used wisely.