Operation of Credit Card
A credit card is a payment card issued to users rs as a system of payment. It allows the cardholder to pay for goods and services based on the holder’s promise to pay for them. Credit cards are a convenient and flexible way to pay for things without having to carry cash. And if you use them wisely, credit cards can be one of the cheapest sources of credit available. You can get more information on how credit cards work and how to get the best from them.
It is a card issued by a financial company which enables the cardholder to borrow funds. The funds may be used as payment for goods and services. Issuance of credit cards has the situation that the cardholder will pay back the original, borrowed amount plus any additional agreed-upon charges. The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to other users. The credit company provider may also grant a line of credit (LOC) to the cardholder which allows the holder to borrow money in the form of a cash advance. The issuer pre-sets borrowing limits which have a basis on the individual’s credit rating.