Credit Card
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Credit Card

Definition of Credit Card

Credit card refers to plastic payment card issued by a financial institution that allows the cardholder to borrow funds from a line of credit to make purchases or access cash advances.

Unlike debit cards that draw funds directly from the cardholder's bank account, credit cards enable users to make transactions on credit, subject to a predetermined credit limit.

Cardholders are required to repay the borrowed amount, usually with interest, within a billing cycle or by making minimum monthly payments, depending on their repayment terms.

What is Credit Card?

A credit card is a convenient and widely accepted financial tool that enables individuals to make purchases or pay for services without using cash.

It functions as a revolving line of credit, allowing cardholders to borrow funds up to a predetermined credit limit.

When a purchase is made using a credit card, the card issuer pays the merchant on behalf of the cardholder, and the cardholder incurs a debt to the issuer.

Cardholders have the flexibility to repay the debt over time, either in full or through minimum monthly payments, with interest charges applied to any outstanding balances.

What are examples of Credit Card?

Some well-known examples of credit cards include:


One of the most widely accepted credit card networks globally, offering a range of credit card products with various rewards and benefits.


Another popular credit card network with global acceptance, providing credit cards with diverse features and perks.

American Express

A major financial services company that issues credit cards known for exclusive benefits, premium rewards, and travel perks.


A prominent credit card issuer in the United States, offering cashback rewards and various credit card options.

Credit cards provide consumers with purchasing power and a convenient way to manage expenses, but responsible usage is crucial to avoid accumulating excessive debt and high-interest charges.

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