credit card


Also found in: Dictionary, Thesaurus, Legal, Financial, Acronyms, Wikipedia.
Related to credit card: discover, American Express

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.
..... Click the link for more information.
). 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
..... Click the link for more information.
 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.
..... Click the link for more information.
. 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.
..... Click the link for more information.
, 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
..... Click the link for more information.
 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.
..... Click the link for more information.
, which is used to deduct the price of goods and service directly from customers' bank balances.

References in periodicals archive ?
Co-brand/affinity credit card application influencers
They do that by inserting a thumbnail size chip that sends an encrypted code when the card or keychain is held within two to three inches of a scanner, usually attached to the credit card swiper.
In the past, if you handed a waiter a maxed-out credit card, he'd come back and tell you your card was declined, and you'd have to pay in cash, with another credit card, or by doing the dishes.
Law enforcement reports, postarrest interviews, analysis of evidence obtained from search warrants, and intelligence gathering have made it possible to describe a typical health club credit card theft scenario.
In addition, the Federal Reserve's Division of Research and Statistics monitors certain trends in the credit card industry.
She currently has a single VISA credit card, a brand new 1999 Toyota Camry, and the beautiful home that she's always wanted in the King's Glen subdivision of Decatur--all at the prime interest rate.
Credit card companies increased the credit they extended nationally by 17 percent last year and sent out 3.
The alumni association did not mass mail any credit card applications or marketing materials, but kept application forms in its office and mailed the forms to the one or two alumni who requested them.
To misquote Ross Perot, that sucking sound you hear each time you whip out your credit card is the sound of natural resources being converted into products.
The issue is the proper amortization period for qualified deferred credit card origination costs of cards with fees (including credit cards with fees waived for a limited time period) and without fees.
The rating reflects the credit quality of the collateral certificate, which is based on the quality of the receivables that make up BA Master Credit Card Trust II, the required credit enhancement, the servicing expertise of FIA Card Services, N.
India and Indonesia reported major increases in mortgage applications, consumer loans, and credit card purchases in 2002.