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3 Latest Tips You Can Learn When Attending The Meaning Of Credit Card | the meaning of credit card

The meaning of credit card is basically a plastic card that enables the consumer to instantly access a predetermined line of credit granted by his credit card issuer. These cards enable consumers to do transactions instantaneously on virtually any credit approved with them. In simpler terms, a credit card means an IOU that the consumer is selling to the financial institution. Credit cards normally come with a fixed credit limit that is predetermined by the issuer depending on consumer's age, past credit history and monthly income.

Most financial institutions use four unique factors to determine the credit limit for the consumer i.e., his payment history, the amount of previous purchases, the type of transactions completed and the type of account the consumer has. These factors are also used to calculate the interest rate. The availability of the credit card numbers in the system is very crucial and so the financial institutions make it mandatory for the consumers to give these credit card numbers whenever they request for any kind of loan or credit card. This is the most basic requirement needed by the issuer and all other lenders and financial institutions use this factor in calculating the risk that the consumer poses.

However, these factors mentioned above are not the only factors that the financial institutions take into consideration. They also make use of factors like the billing address, nationality, employer, occupation and many more to make payment easier and convenient to the individual. In short, these factors do not make payment 100% transparent to the individual but at the same time do not make the risk that the individual may misfavor with the issuer. Sometimes, the individual might have a bad habit of not paying the bills on time which the issuer finds out very quickly and fines him. In such cases, the issuer makes payment through different methods to different individuals thus making it very complicated for the individual to make payment.

All the individual needs is to make payment when he/she receives his/her bill. At times, there are situations where an individual receives a bill and he/she does not have the complete information about the exact balance due and the due date. However, the financial institutions are equipped with means to make payment simpler for the individuals by deducting a certain amount from the salary or even using electronic methods. Thus, the individual need not have to wait for the payment as the amount will be deducted from his pay slip before it reaches the bank. This also saves the embarrassment that the person will face if he cannot make payment.

These debit cards or visa cards are also widely used by the people in the foreign countries so that they can avoid the inconvenience of dealing with cash in their local currency. In fact, debit cards have become so popular that the major financial institutions in the US are using the Visa or MasterCard digits in making the payment for their customers. The major reasons behind this are mentioned as below:

The foreign currencies involved in the transactions are different in the various countries. Hence, the foreign currency represents issuer instead of the credit card number. For instance, if the currency representing the issuer is Euro, then paying by credit card number would be difficult. However, the same transaction in the case of the Debit card number would not be difficult.

Another factor that makes the debit cards popular is the fact that they can be used worldwide without any trouble. The cards do not have to be physically present in the user's wallet so that the payment can be done instantly. The only thing that has to be done is to insert the cardholder's bank number along with the Visa or MasterCard digits and the money will be transferred to the account of the cardholder. Hence, this account numbers is the only thing that has to be noted when the person wants to make a purchase.

The meaning of Credit Card and debit cards are very much similar to each other but are very different from debit cards. For example, it is easy to make the payment using debit card because the money will be transferred to the account of the cardholder after inserting the account number instead of the first or second digit. Thus, it is believed that debit card will be the first digitized industry identifier. On the other hand, the credit card industry identifiers will be the second digitized industry and will also be the first digitized industry identifier.

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