subject: Merchant Account Reviews - Credit Card What Is Really A Credit Card? [print this page] Put simply, a charge card is just a little piece of plastic that simply fits in your wallet. Well, it is not 'just a piece of plastic'; it is a really powerful piece of plastic which can be regarded as a compressed form of cash. We can define credit cards like a credit system that enables the customer to borrow cash on the fly from a bank or a financial institution and use it to create payments towards the merchants.
In order to obtain a credit card, the consumer needs to fill-in an application form that's really like an agreement between the credit card supplier and the credit card consumer. The credit card supplier approves the application form and provides the customer having a small piece of plastic (i.e. the charge card). This plastic (or charge card) contains electronically encoded security information in the form of a magnetic strip (which is generally located at the back of the credit card). This info is used for authorizing payments whenever the customer uses the credit card. The consumer can use the credit card for shopping at merchant outlets or about the web etc. Obviously, this is subject to merchant's capability to accept charge card payments. Accepting the credit cards is, nevertheless, not enough. The merchant ought to be able to accept payments made via the credit card provided by that credit card organization (of which you hold the credit card) i.e. VISA, MasterCard etc. You are able to also use credit card to withdraw cash from ATMs (automatic money machines) - also known as cash machines or Day/Night machines.
There are eight primary charge card organizations and most of them operate in lots of countries world wide. These are American Express, Citi, Diners Club, Discover, JCB, MasterCard and VISA. Master card and VISA are probably the most popular ones. Then there are charge card suppliers or issuers who have tie-ups with these organizations and issue credit cards on their behalf e.g. you have various banks that issue VISA cards (like HSBC VISA card)
To create a payment using a credit card, the credit card has to become either swiped into special credit card processing machine (when purchasing in person at shops) or the details from the credit card have to be entered about the merchant's website (when purchasing on the internet). The charge card supplier sends across the bill for these transactions to the consumer who is then required to pay either the full quantity or a partial (minimum) amount. If you pay in full, the credit card supplier doesn't charge any interest on the quantity you owe, otherwise the pre-agreed interest rate is charged. If you do not pay even the minimum, you may land up having a late fee too. Moreover, the charge card supplier generally puts a limit on the maximum amount you are able to spend per month using your charge card.
