A credit card is a cashless form of payment made of plastic. This is given to clients by various banking or financial institutions and may be used to pay purchases with or other transactions in place of paying in cash.
Credit card size follows the dimensions guidelines set by the ISO/IEC 7810 for different card types. For credit cards, the standard size is 85.60 millimeters by 53.98 millimeters.
How Credit Cards Work
The issuing bank or financial institution will pay for any moneyed transaction that the client goes into with a third party merchant. The credit card company issues the payment as a form of cash advance for the user and the user will then pay whatever has been advanced by the card company.
The payments are offered on installment where the user is allowed to pay only the minimum charge, instead of paying for the entire amount charged to the credit card.
Merchants accepting credit card payments usually have a sign on display to inform consumers that credit cards are accepted as a form of payment in their establishment.
Before getting a credit card, it is advisable that you check the interest rates charged by the credit card company to users. Since the use of the card works pretty much like a loan, a corresponding interest rate is affixed to the charges usually on a per transaction basis.
The interest rates vary based on the issuing bank or financial institution. These are usually anywhere between 1 and
3 percent per transaction. There are special purchases that could be given higher interest rates so you’d best check this part of the agreement as well before signing on the dotted line and accepting your credit card.
In cases where payments are not settled within the allotted period of time, additional charges may be included in the next billing. This provision usually makes it harder for consumers to pay their minimum amount due on or before the due date.
This is another stipulation in the agreement contract between the financial institution and the user that you have to carefully study. Reading the fine print on contracts between you and your bank is therefore of the highest importance.
Another fee that may be charged to your is the annual fee. You may look at this as your membership fee for the financial institution or bank that issued your credit card.
Upon first activation, the annual fee is normally waived; but the following year and the years thereafter, you may already be charged for the annual fee.
Credit cards come in handy when you are strapped for cash and you need to purchase basic necessities or pay for medical emergencies. But it can also leave you heavily indebted to the bank.
This is why being a responsible cardholder should be taken seriously in order to enjoy the full benefits of a credit card minus the hassles of paying exorbitant fees for late payments or accumulating debts for non-payment.