A credit card is a system of payments issued to users of the system. Credit cards are issued after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting the card. An electronic ratification system allows merchants to check that the credit card is legit and the credit card user has sufficient credit  to cover the purchase in a few miliseconds , which allows the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or Point of Sale system with a communications link to the merchant’s acquiring bank.

Each calendar month, the credit card user is sent a statement showing the purchases undertaken with the card, any outstanding fees, and the total amount they owe . Credit cards allow modest short-term loans to be quickly made to a customer who needs not calculate a balance remaining before every transaction , provided the total charges do not exceed the max Edit line of credit for the card. Credit cards are accepted worldwide , and are available with a large variety of credit limits, repayment scheme, and other perks . In recent times, credit card portfolios have been very fruitful for banks , largely due to the booming economy of the late nineties.

However, in the case of credit cards, such high returns go hand in hand with risk, since the business is essentially one of making unguaranteed loans, and thus dependent on borrowers not to default in large numbers. The conception of the credit card itself has become a major merchandising point in recent days. The value of the card to the issuer is often related to the customer’s usage of the card, or to the customer’s financial worth.

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