Here’S Your Guide To Understand The Increasing Complex Concept Of Credit Cards Nowadays:

Deblohit Deb
Jul 26, 2019   •  6 views

A credit card is based on the theme of cashless transaction that readily saves you from carrying cash in the time of purchase. In this system, the bank or the card issuer (such as credit union) generates a revolving account and permit a line of credit to the cardholder. While purchasing the card-holder borrow the amount as a cash advance to pay the merchant. It permits the card-holder to build up a continuous balance of debt which is subject to interest.

In 1887, we first find the concept of credit card in the novel Looking Backward by Edward Bellamy. Where the use of the card described more like a debit card. The practical form of the credit card was developed in 1928 named as charge cards, which remains in use from 1930 to 1950s in the U.S. than with times, the world saw different forms of it likeair travel cards, American express, master charges any many more. Earlier the cards were made up of plastic, metal, and fiber, and by now the cards we are using are made up of PVC plastic with a metal chip in it.

Size of most of today's cards is 3 3⁄8 × 2 1⁄8 with rounded edges. Its comes with a printed bank card number. The first six numbers specify the bank to which the card belongs to. The next nine digits determine the account number with the last digit that signifies the validity check code. Along with the main card number, it also carries the date of issue and date of expiration (in the mm/yy format).

Things banks consider before Issuing a Credit Card:

If you yet have not applied for a credit card and planning to do so, here is the list of factors that influence the card eligibility;

The eligibility rules may vary according to different banks and the purpose for which the card is used. The basic clauses are;

1. Age must be 18 or more

2. Must have a source of regular income (Salaried or self-employed).

3. Must have a minimum amount of savings in your name.

Usage of credit cards:

Whenever a purchase has been made, the cardholder agrees to pay the card issuer (bank/credit union). By signing the receipt after entering the personal identification number (PIN) cardholder allows the amount to be paid. By using electronic verification, the merchants verify whether the card is valid with a sufficient amount of credit to cover the purchase via a credit card payment terminal or point-of-sale (POS) system. All the data from the card is obtained by the magnetic strip/ chip present on the front side of the card. And at the end of each month, a statement of purchase using the card, with all details like total amount owed, outstanding fees are sent to the cardholder. And if a cardholder finds any data incorrect then he/she can readily dispute the charges.

Pros and Cons of Credit Card

Main satisfaction of having a credit card is its convenience. It allows short term loans to the cardholder, without thinking about the remaining balance after every transaction until total expense exceeds the maximum credit line. The advantages of the credit card vastly surpass the disadvantages of it. With a bit of knowledge, anyone can use credit card practically. Consider the pros and cons herein listed below;


1. Rewards

2. Online shopping

3. Travel Insurance

4. Emergency Protection

5. Foreign Currency Conversion

6. Fraud Protection


1. Debt

2. Late Fees

3. High-Interest Rate

In a concluding note, though credit cards have their own pitfalls using them judiciously can help you to build a credit history that makes buying simpler.