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 ?
Our Platinum Card Members count on us to elevate their travel experience from the time they book their trip until they return home, said Lisa Durocher, senior vice president, Charge and Benefits for American Express.
As a result, the QuicksilverOne card, the Classic Platinum card and the Venture Rewards card are currently the only personal cards that Capital One offers that carry an annual fee.
com to quickly and easily compare Barclaycard's Platinum Card against a range of credit card offers from across the market.
It's a pretty short-term incentive and could be a way to encourage those taking out the 20-month 0% balance transfer deal on a Platinum card to spend money instead of just using it to pay off debt.
Anthony Tangorra, the company chief executive officer, said, 'Airspace Lounge looks forward to introducing American Express Platinum Card members and their guests to our first US lounge located at Baltimore Washington International Airport.
Consumer and business American Express Platinum Card members will enjoy complimentary access to the lounge, which is located on Concourse D, which currently serves AirTran, Cape Air, Continental, United and US Airways.
The Platinum card lets cardholders earn two miles for every US dollar spent internationally and 1.
Rani Wahbeh, to platinum card, in gratitude for his frequent visits and loyalty to the group's outlets.
MUSCAT Eoe1/4" UAE-based United Arab Bank (UAB), National Bank of OmanEoe1/4aos strategic ally, has won the Eoe1/4Y[pounds sterling]Best New Credit Card DesignEoe1/4ao award for its Sadara Platinum Card.
Students who get three gold awards consecutively qualify for a platinum card, which means students can go into the games room at break and lunchtimes.
9 per cent could save about pounds 230 by moving to Lloyds TSB's Platinum Card.
To qualify for Capital One Bank's No Hassle Platinum Card, for example, you need a minimum income of just pounds 10,000 and the interest charged is a market-leading 5.