credit card

(noun)

A plastic card with a magnetic strip or an embedded microchip connected to a credit account and used to buy goods or services. It's like a debit card, but money comes not from your personal bank account, but the bank lends money for the purchase based on the credit limit. Credit limit is determined by the income and credit history. Bank charge APR (annual percentage rate) for using of money.

Examples of credit card in the following topics:

  • Credit Cards

    • A credit card is a payment card issued to users as a system of payment.
    • A credit card also differs from a cash card, which can be used like currency by the owner of the card .
    • As all credit cards charge fees and interest, some customers become so indebted to their credit card provider that they are driven to bankruptcy.
    • Merchants may charge users a "credit card supplement," either a fixed amount or a percentage, for payment by credit card.
    • A credit card is a payment card issued to users as a system of payment.

  • Consumer Misbehavior

    • Consumer misbehavior is specifically related to retail and other markets, and includes things from cutting in line to fights between customers to credit card fraud.
    • Credit card fraud is a wide-ranging term for theft and fraud committed using a credit card or any similar payment mechanism as a fraudulent source of funds in a transaction.
    • Estimates put the cost of credit card fraud to billions of dollars .
    • Credit card fraud is a form of consumer misbehavior that can cost billions of dollars a year.

  • Loyalty Marketing

    • To the general public, many airline miles programs, hotel frequent guest programs and credit card incentive programs are the most visible customer loyalty marketing programs.
    • CLOs connect offers or discounts directly to a consumer's credit card or debit card, which can then be redeemed at the point of sale.
    • To receive and use CLOs, consumers must willingly opt in to a CLO program and provide their credit/debit card information.
    • After consumers make a purchase at the designated retail location, the savings appeared are credited directly to their bank, credit card or PayPal account.
    • Moloney shows that nearly half of all credit card users in the US utilize a points-based rewards program.

  • Collection from Delinquent Payables

    • If an individual does not repay borrowed money to a credit card company and 6 months of nonpayment have passed, the credit card company may declare a "charge-off. " This means that the debt is "written off as uncollectable," so that the credit card company will get a tax exemption on that debt.
    • A charge-off is the declaration by a creditor (usually a credit card account) that an amount of debt is unlikely to be collected.
    • A charge-off is one of the most adverse factors that can be listed on an individual's credit report, greatly impacting an individual's ability to get credit in the future.
    • A charge-off is the declaration by a creditor (usually a credit card account) that an amount of debt is unlikely to be collected.
    • Explain the ramifications of failing to repay credit card and loan debts

  • Short-Term Loans

    • A credit card is a payment card issued to users as a method of payment.
    • For smaller businesses, financing via credit card is an easy and viable option.
    • Compared to debit cards and checks, a credit card allows small short-term loans to be quickly made to a customer.
    • The customer then need not calculate a balance remaining before every transaction, provided the total charges do not exceed the maximum credit line for the card.
    • These loans are also sometimes referred to as "cash advances," though that term can also refer to cash provided against a credit card or other prearranged line of credit.

  • Obtaining Credit

    • A credit card company, which is a type of creditor, will look at information about the potential customer, or debtor, from a credit bureau in order to determine if the company will lend to the potential customer.
    • The credit card company uses the credit report, provided by the credit bureau, to determine if the lender is likely to pay back the loan.
    • Types of credit include: bank credit, consumer credit, public credit, and investment credit.
    • In the U.S., when a customer fills out an application for credit from a bank, store or credit card company, their information is forwarded to a credit bureau.
    • This information is used by lenders such as credit card companies to determine an individual's credit worthiness; that is, determining an individual's ability and track record of repaying a debt.

  • Depository Institutions

    • Many borrowers seek bank loans for mortgages, car loans, or credit cards.
    • Credit unions are another depository institution.
    • Credit union extends membership to people who share a common interest.
    • For example, many states have credit unions for schoolteachers.
    • Consequently, the commercial banks want credit unions on equal grounds with commercial banks because a credit union does not pay income taxes on its profit.

  • Setting a Credit Policy

    • To establish a credit policy, a company must establish credit standards, credit terms, and a collection policy.
    • There are three steps a company must undergo when developing a credit policy:
    • Management must decide on credit standards, which involves decisions on how much credit risk to assume.
    • Another important factor in determining credit standards involves a company evaluating the credit worthiness, or credit score, of an individual or business.
    • To reduce its risk, the seller may perform a credit check on the buyer or require the buyer to put up collateral against credit extended.

  • Credit Operations

    • Organizations that offer credit to their customers frequently employ a credit manager .
    • A line of credit is any credit source extended to a business or individual by a bank or other financial institution.
    • A line of credit may take several forms, such as overdraft protection, demand loan, special purpose, export packing credit, term loan, discounting, purchase of commercial bills, traditional revolving credit card account, etc.
    • Lines of credit can be secured by collateral or may be unsecured.
    • The use of credit is a necessity in business and should be managed wisely.

  • Credit Ratings

    • Credit ratings are determined by credit ratings agencies.
    • A credit score is primarily based on credit report information, typically from one of the three major credit bureaus: Experian, TransUnion, and Equifax.
    • Income is not considered by the major credit bureaus when calculating a credit score.
    • The credit bureaus all have their own credit scores: Equifax's ScorePower, Experian's PLUS score, and TransUnion's credit score, and each also sells the VantageScore credit score.
    • In addition, many large lenders, including the major credit card issuers, have developed their own proprietary scoring models.