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What is the definition of Credit Card? is it Worth or Not?

What is the Definition of credit card

A credit card is a plastic money like your currency notes to buy anything.

You can do online payments with credit cards like e-commerce platforms for shopping, bill payments, financial transactions, and much other payment you can do with a credit card.

The best thing to know about the credit card is you can withdraw cash from ATM by using a credit card.

A credit card looks like a debit card and the working process of both the card are the same to pay someone.

So in this amazing guide we will discuss the difference and what is the definition of a Credit Card.

My Name is Sarvesh Maurya and I usually write the article about personal Finance on My blog Taxinvestcare.

The debit card is linked with your bank account and the credit is not linked with your bank account.

Credit cards are provided by some companies and banks with a certain limit of amount on a limited period of time.


A Credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder promise to the card issuers to pay them for the amounts plus the other agreed charges.

A credit card is different from a charge card, which requires the balance to be rapid in full each month.

A credit card is also different from a cash card, which can be used as currency by the owner of the card.

History of Credit Card

The 1900s: Charge coins were the earliest recorded forms, Credit Card.

The 1930s: Charges plates were issued by merchants and took the form f a rectangle metal plate.

1946: Banker John Baggins developed the charge its card.

The 1950s: American Express Launch its travel and entertainment card in the 1950s.

2000: To present, New Technology, smartphones & another device can be used for payments.

Functions of Credit Card

v Economy in the use of Money
v Easy Exchange and re-maintained.
v Promotion of trade especially foreign trade.
v Expansion of Bank Credit.
v Benefits of Bank Consumer.
v Credit to the government sector.
v Stability.

Benefits of Credit Card

Here are some benefits of using Credit Card

No tension During Emergency

The benefits of using Credit The card is you can use it in a financial Emergency, Medical Emergency, Bill payment EMI Payment.

Safer to carrying than Cash

A credit card is a safe way to carry money; you don’t need to carry cash.

Let’s say you have a credit card with a limit of 1 lakh rupees so carrying the credit card will be very easy for you compare to carry hard paper money of 1 Lakh Rupees.

SafeGuard from Fraud Transaction

We use our credit card for online payments so its secure us with any type of online transaction fraud.

Improves CIBIL Score + Get More Loan

A credit card helps you to improve your CIBIL score which will be beneficial for you to get loans easily.

Get Discount

Most of the companies offer a special discount if the buyer pays the bill using their credit card.

Reward Point

Many online shopping platforms give some reward for the shop using a credit card.

These points you can redeem to buy something in the future and also use it in your next shopping.

Disadvantages of Credit Card

Credit is not only for Benefits there is down of the Credit card that you must know before buying the Credit card of any company and Bank.

High-Interest Rate

The interest rate of a credit card is very high compare to any other loans but these charges only apply if you are not paying the bill of credit card during the giving time period.

The interest rate of credit the card is about 36-40%.

Some hidden charges like late payment, the finance charge.

Bad effects on CIBIL score in case of Default

If you are not able to pay a credit card on time it will impact your CIBIL score and that is not good for you because once CIBIL scores impact it will take time to improve.

Feature of credit card

Transaction statement

You can use your credit card for tracking your previous transactions by using transaction statements.

The statement sent on your email at the end of every month that will help you to plan your next month's budget.

Secure Purchasing

The main feature of using a credit card is it gives you secure purchasing.

For example, you buy a product using a credit card and you got the fault on the product, so the credit card company will help you to return the product.


Credit Card Explain

Credit card is the same as debit car it is 16 digits Card Number, Expiry Date, and on the back Magnetic strips and CVV Number.

The invention of Magnetic Strip and Tape

Magnetic strip put on plastic card by IBM engineer forest parry in early 1960.

It is used to store the account holder's information in electronic form.

Types of Credit Card

Unsecured Credit Card

Most of a common type of credit card typically meant for people with fair to excellent credit.

Secured Credit Card

Typically requires a cash security deposit, which may serve as the cardholder’s limit.

Typically for people with no credit or those whose credit need’s works.

Balance Transfer Credit Card

Allow users to transfer their credit card balance to a new card, usually to save money on interest.

The new card has a 0% introductory annual percentage rate(APR) for a specific period.

Travel Rewards Credit Card

Offer miles or points that can be redeemed for travel-related purchases, such as airfare and hotels.

Student Credit Card

Starter the card that can be a good first Credit Card option generally comes with a small credit card.

0% interest APR Credit Card

Allow you to pay no interest on purchase and/or balance transfers for a certain period.

Retail Card

You earn points for services or products that you buy from a particular retailer for example(a warehouse club, department store, or gas station.

Billing Cycle of a Credit Card

 Bill Date

Due Date

Minimum Amount

50 Day Process Cycle

Now There one more most important term I am gonna introduced about a credit card is the Billing Cycle.

Billing is an important thing to know after purchasing the credit card.

Different-different bank and companies have their billbug cycle.

What is the Billing Cycle of a Credit Card?

Billing Cycle is a time of period to pay the bill of Credit Card since the generating of Bill date.

It’s around 30-50 Days of the Billing Cycle period.

It decided by Bank and Credit card companies’ terms and conditions.

Points on Billing Cycle

Bill Date

Bill Date is a fixed date which id decided by default from banks or companies.
It will be 1-30 days of every month.

It would be 1st Days of the, 15th Days of the month and can be the last days of the month.

On this date your credit card bill generates.

For example, your bill date is 1st May of the month and you purchase something with your credit card so your bill The generation date will be 1st June.

Due Date

Bank and companies provide you days of the time period to pay the credit Card Bill after generating Bill Date The last will be the due date.

Minimum Amount

The amount charged on our shopping any case, I can’t pay.

it around 12% of the shopping amount.

Let’s suppose you pay the purchase something of Rs.20, 000 and you are not able to pay the bill of the due date.

so the bank will tell you to pay the minimum of the shopping amount.

50 Days Process Cycle

This process is a key term to understand credit cards.

This process cycle includes Bill date, Due Date, and Minimum amount.

To better understand let’s see a simple but easy to understand example
A man has a credit card and he buys some products around 50,000 amounts on 1st January.

Bill Generating Date is 15th of every month as I mentioned above.

So the Due date will 15th February and if the cardholder wants to pay the minimum amount so the amount will be 6000 at 12% of the charge rate.

This whole process is known as the 50 Days Process Cycle.

How to choose the Best Credit Card

How to choose Best Credit Card

A credit card is a good thing and there is something to consider when applying for a credit card.

Always choose the Credit Card according to your lifestyle and Financial Condition.

A credit card is good or bad is totally depends on how you use it. If you use it smartly then it will beneficial for you.

But of the person using the credit to buy essential things.

Amazing Things you need  to know before credit Card Apply

Cash Back

Debt Settlement

Minimum Charges

Other Charges

Cash Back

Cashback is like free money.

Many banks and companies provide huge cash Back so always for cash Back term before applying for a credit card.

Debt settlement

Debt settlement is like time to pay the EMI or Installment.

Always look for those companies that give you sufficient time to settle your debt with an easy process.

Minimum Payment

Minimum payment means different companies charge rate of charges so compare these charges first.

Other Charges

Always look for low charges of Credit cards.

Eligibility Criteria for Credit Card apply

Now let’s see some eligibility criteria for getting credit card approval.

Income Source

a person who has an income source like a job, Business, etc.

Then it will help to get credit card approval.


CIBIL Score is one of the important for getting a credit card. The good CIBIL Score is to Increase the chances of getting a Credit Card.

Normally it’s around 7+.

 You can easily check your CIBIL Score.


The overall Conclusion about the definition of a credit card. It is a new trending and safe option to save money and fulfill your dreams also the easy way to get short term loans with a 0% interest rate.

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