What is a credit card?

What is a credit card?

The average person keeps 3-5 plastic cards in their wallet, but how much do we know about them?

A credit card is a tool for repeatedly borrowing money from a bank. It can be used to pay for goods and services, as well as to get cash at an ATM. The loan amount is limited by the bank – the maximum loan amount is determined based on your ability to pay.


The credit card is a plastic rectangle with rounded ends sized 85.6 x 53.98 mm. On its surface it has a magnetic strip. Microchip cards have become widespread, allowing you to store 80 times more account information than is possible on magnetic media.

On the front side there is a graphic image (picture or photo), the name of the bank that issued the card, the logo of the payment system, usually a 16-digit number (sometimes 8, 18 or 20 digits), the month and year of expiry, the name and surname of the cardholder. On the back side there is contact information of the bank, a strip with the signature of the cardholder and in some cases the CVV2 security code.


Credit cards have a wide range of possibilities. You can use them to pay anywhere in the world where there are terminals that accept cards, as well as to withdraw cash from ATMs of any bank.

The main advantage of most cards is the grace period, a period during which the bank charges no interest for using the credit (usually 50-60 days). You do not have to report to the bank for the use of money, and after paying the debt there is an opportunity to get a new loan.

You can apply for a credit card at most banks. To do this, you need to submit your application through the office of the institution, its website, or by telephone. You will need a passport.

The difference in terms

A credit card is often called a “credit card.” However, some people confuse it with a debit card. A debit card usually always contains a positive balance of funds that are the property of the cardholder. With debit cards, people save money, get their salary or deposit income on them. Credit cards, on the other hand, imply access to the bank’s money, and are used when there is a shortage of your own funds.

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