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Plastic money: Credit cards, debit cards, charge cards and smart cards

Know all about a credit card.

Apnaloan.com Research Bureau

10 Aug 2007

Mention cards and most people will think of credit cards. Popular as they are, what with being accepted for payment at over 20 million shops worldwide, credit cards really represent just one type of card. the other types include debit cards, smart cards, and charge cards.

Credit card users get a free period of credit before they repay the credit card company. When you use a credit card, you have the option to pay only a part of the total amount spent and carry forward the balance, for which you pay interest.

A smart card is used to store cash electronic form. The charge card carries all the features of credit cards, except that you cannot defer your payment to the card company. A debit card is simply used as substitute for cash or check payments.

Not surprisingly then, it is the credit card that guarantees a free period of credit and allows customers to defer total payment of bills as well, which has made it highly popular.

At the heart of the credit card business is a mutually beneficial arrangement between card issuers and businesses, called merchant establishments in credit card parlance. With a credit card, one can take care of emergencies without bothering about immediate cash availability. Besides, credit cards also come with additional services and benefits like insurance, anytime cash and flexible payment plans.

All credit cards have built-in safety features like signatures and personal identification numbers. There are a host of specialised credit cards too. For instance, international credit cards are designed to give you financial flexibility when you travel abroad on personal and business trips.