is part of a system of paymentsnamed after the small plasticcard issued to users of the system. It is a card entitling itsholder to buy goods and services based on the holder's promise to payfor these goods and services.
The issuer of the card grants aline of creditto theconsumer (or the user) from which the user can borrowmoney for payment to amerchantor as acash advanceto the user.A credit card is different from acharge card, where a charge cardrequires the balance to be paid in full each month. In contrast, creditcards allow the consumers to 'revolve' their balance, at the cost of havinginterestcharged. Most credit cards are issued by local banksor credit unions, and are the shape and size specified by theISO/IEC7810standard as ID-1. This is defined as 85.60 × 53.98 mm in size.
How credit cards work
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Credit cardAn example of the front in a typical creditcard:1.Issuing bank logo
Credit cards are issued after an account has been approved by thecredit provider, after which cardholders can use it to make purchasesatmerchantsaccepting that card.When a purchase is made, the credit card user agrees to pay the cardissuer. The cardholder indicates consent to pay by signing areceiptwith a record of the card details and indicating the amount to be paidor by entering a personal identification number (PIN). Also, manymerchants now accept verbal authorizations via telephone andelectronic authorization using the Internet, known as a'Card/Cardholder Not Present' (CNP) transaction.Electronicverificationsystems allow merchants to verify that the cardis valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at timeof purchase. The verification is performed using acredit card paymentterminalor Point of Sale(POS) system with a communications link tothe merchant'sacquiring bank . Data from the card is obtained from amagnetic stripeor chipon the card; the latter system is in theUnitedKingdomandIrelandcommonly known asChip and PIN, but is moretechnically anEMVcard.Other variations of verification systems are used byecommercemerchants to determine if the user's account is valid and able to acceptthe charge. These will typically involve the cardholder providingadditional information, such as thesecurity codeprinted on the back of the card, or the address of the cardholder.