Credit Card; Credit without collateral or security

Credit card is a form of Bankcard. A bankcard is a card issued by a financial institution. Cardholders can use the cards to access their financial resources, such as a checking account or a line of credit.

Credit Card is an electronic based plastic card bearing an account number assigned to a cardholder with a credit limit that can be used to purchase goods and pay for services with a credit facility and without cash/currency note transactions from the appointed merchants of issuer of the card and to obtain cash disbursements on credit, for which the card holder is subsequently billed by an issuer for repayment of credit extended at once or on an installment basis. It is an unsecured credit, i.e. Credit without collateral or security. And it is the safer substitute to cash and is the major mode of payment worldwide.

By definition, Credit Card is a continuous credit facility given to the card subscribers. People prefer the Credit Card transaction instead of cash because of its following advantages:

1. It increases purchasing power.

2. It eases the transaction process (money less transaction).

3. It allows for obtaining credit facility for a definite period (of maximum of 50 days and minimum of 15 days).

4. It is convenient to carry a plastic card rather than bundles of cash.

5. It lowers risks of losing money as often occurred through hijacking/snatching or forged currency notes.

6. It is usually issued for a year with renewal facility available.