credit card

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credit card,

device used to obtain consumer credit at the time of purchasing an article or service. Credit cards may be issued by a business, such as a department store or an oil company, to make it easier for consumers to buy their products. Alternatively credit cards may be issued by third parties, such as a bank or a financial services company, and used by consumers to purchase goods and services from other companies. There are two types of cards—credit cards and charge cards. Credit cards such as Visa and MasterCard allow the consumer to pay a monthly minimum on their purchases with an interest charge on the unpaid balance. Charge cards, such as some American Express cards, require the consumer to pay for all purchases at the end of the billing period. Consumers may also use bank cards to obtain short-term personal loans (including "cash advances" through automated teller machinesautomated teller machine
(ATM), device used by bank customers to process account transactions. Typically, a user inserts into the ATM a special plastic card that is encoded with information on a magnetic strip or computer chip.
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). Credit card issuers receive revenue from fees paid by stores that accept their cards and by consumers that use the cards, and from interest charged consumers on unpaid balances.

Diners Club became the first credit card company in 1950, when it issued a card allowing members to charge meals at 27 New York City restaurants. In 1958, Bank of America issued the BankAmericard (now Visa), the first bank credit card. In 1965, only 5 million cards were in circulation; by 1996, U.S. consumers had nearly 1.4 billion cards, which they used to charge $991 billion in goods annually.

The growth of credit cards has had an enormous impact on the economy—changing buying habits by making it much easier for consumers to finance purchases and by lowering savings rates (because consumers do not need to save money for larger purchases). Oil companies, car makers, and retailers have also used the cards to market their goods and services, using credit as a way of encouraging consumers to buy. Concern has been voiced over widespread distribution of bank credit cards to consumers who may not be able to pay their bills; costly losses and theft of cards; inaccurate (and damaging) credit records; high interest rates on unpaid balances; and excessive encouragement of consumer debt that has cut savings in the United States. Legislation enacted in 2009 (and effective in 2010) imposed restrictions on credit card companies, including restricting how they could raise interest rates and placing limits on the issuing of cards to persons under 21 years of age, and attempted to make credit card bills clearer and more informative.

Technology advances have facilitated the use of credit cards. Recording and confirming purchases made using credit cards has progressed from taking a mechanical impression of the card on a paper slip to reading a magnetic strip and transmitting the data electronically to replacing the strip with smart cardsmart card,
small device that resembles a credit card but contains an embedded microprocessor to store and process information. Magnetic-stripe cards, which store a very small amount of information (most typically used to identify the owner) and have no processing capability of
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 electronic chip technology which can in some cases be read using radio-frequency identificationradio-frequency identification
(RFID), a technology that uses radio waves to transmit data and uniquely identify an animal, person, or thing. An RFID system typically consists of a tag and a reader.
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. Merchants, who once needed to telephone a bank office for approval, are now connected to banks by modemmodem
[modulator/demodulator], an external device or internal electronic circuitry used to transmit and receive digital data over a communications line normally used for analog signals.
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, so purchases are approved rapidly; on-line shopping on the InternetInternet, the,
international computer network linking together thousands of individual networks at military and government agencies, educational institutions, nonprofit organizations, industrial and financial corporations of all sizes, and commercial enterprises (called gateways
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 is possible with credit card payment. An alternative to credit cards is the debit carddebit card,
card that allows the cost of goods or services that are purchased to be deducted directly from the purchaser's checking account. They can also be used at automated teller machines for withdrawing cash from the user's checking account.
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, which is used to deduct the price of goods and service directly from customers' bank balances.

References in periodicals archive ?
Over the years, the profitability of bank credit card operations improved as operating efficiencies were developed and as credit cards were distributed and used more widely.
During the promotion period, for every QR1/- spent with the Lulu-Doha Bank credit card, cardholders will now receive 2 shopping points back which can be redeemed within Lulu stores to enjoy more free shopping on everything from freshly baked food to household items and electronics.
Jamal Al-Hazeem, Chief Executive Officer of BMI Bank said, "In line with our commitment to constantly enhance our products and services to better serve our customers financial needs, I am pleased to roll out our new facility that not only provides customers transferring in their outstanding on other bank credit cards with a ninety day reprieve from interest but also enables them to take advantage of one of the most competitive and rewarding credit card products that is currently available in the market.
Bank credit card write-offs peaked at nearly 13% in July 2010 and retail credit card write-offs peaked at more than 14% in July 2010.
The bank credit card association is hoping that VeriSign's so-called digital certificates will provide added security for purchases made over the Internet.
The other product is most often another liquid asset account or a bank credit card.
As of YE2005, it was the 12th largest bank credit card issuer in the US with the receivables outstanding of approximately $3.
The promotion will be available for Doha Bank credit card holders until August, the bank said.
Bank credit card origination volumes continue to remain strong, with the total number of new bank credit cards opened from January-August 2011 representing a 25%*** increase over the same period in 2010.
In the US, RBS Group owns Citizens Financial Group, the RBS National Bank credit card business and Lynk Systems, a merchant enquirer.
New Program Allows millions of account holders to Show Off Personal Photos and Images on their Credit One Bank Credit Card
He most recently founded Percolate, which is a marketing services company, and prior to that was chairman and chief executive officer of Fleet Bank Credit Card Services, where he had been since 1998.