Credit Cards

The term credit card refers to the cards granted by banks, retail stores and various other financial or business institutions or companies that elect to extend credit privileges to consumers. Visa and MasterCard are prime examples of credit cards that are used for the purpose of borrowing money, often called a cash advance, or purchasing goods or services on credit.

Purchases can be made with payments extending over time. This is accompanied by interest, the fee for credit, also referred to as one of the costs of credit. Other costs of credit include the annual percentage rate and the finance charge.

Understanding the costs of credit and being able to use this information in the evaluation of credit opportunities and credit use are very important skills for successful personal money management. There are many information outlets available on the Internet for consumer education in regard to these matters.