Credit card

A credit card is a peace of plastic with magnetic strip or smart chip that allows to make payments. Most credit cards work through regional or international payment systems like Visa, Mastercard, American Express, JCB, etc. They are issued by banks and credit unions.

Credit card is different from a debit card in that the credit card issuer lends the consumer money rather than having the money removed from an account. For money lending the issuer charge APR (annual percentage rate) and annual fee. Credit limit for each customer is determined by his or her credit score and household income. Credit score is calculated based on previous behavior as borrower. People with bad credit score, after bankruptcy or with debts can apply only for secured credit card. Secured credit card is issued when you deposit some money on a bank account to secure the loan.

A debit card is a ISO 7810 card which physically resembles a credit card, and, like a credit card, is used as an alternative to cash when making purchases.

There is also a charge card. Charge card is used like a credit, but total balance is have to be paid each month.

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  Credit cards

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  Credit card / Smart card

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  Credit card / Smart card with inset showing enlarged chip