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{{Short description|Card for financial transactions on credit}}
{{use American English|date=August 2022}}
{{multiple issues|{{Globalize |2=United States |date=January 2025}}
{{Copy edit|date=May 2025}}
{{Use dmy dates|date=March 2019}}}}
[[File:Credit-cards.jpg|thumb|Credit cards from the South African [[Absa Bank]]]]
{{Banking|accs/cards}}
A '''credit card''' (or '''charge card''') is a [[payment card]], usually issued by a [[bank]], allowing its users to purchase [[Goods and services|goods or services]], or withdraw [[cash]], on [[credit]]. Using the card thus accrues [[debt]] that has to be repaid later.<ref name=":0">{{cite book |last1=O'Sullivan |first1=Arthur |author-link=Arthur O'Sullivan (economist) |first2=Steven M. |last2=Sheffrin |author2-link=Steven M. Sheffrin |title=Economics: Principles in action |publisher=Pearson Prentice Hall |year=2003 |___location=Upper Saddle River, New Jersey |page=261 |isbn=0-13-063085-3 |type=Textbook}}</ref> Credit cards are one of the most widely used forms of payment across the world.<ref>{{Cite web |last=The World Bank |title=Credit card ownership (% age 15+) |url=https://genderdata.worldbank.org/indicators/fin7-t-a/ |access-date=2023-10-21 |website=World Bank Gender Data Portal |language=en |archive-date=4 December 2023 |archive-url=https://web.archive.org/web/20231204134303/https://genderdata.worldbank.org/indicators/fin7-t-a/ |url-status=live }}</ref>
A regular credit card differs from a [[charge card]], which requires the balance to be repaid in full each month, or at the end of each statement cycle.<ref>{{cite book | last = Schneider | first = Gary | title = Electronic Commerce | publisher = Course Technology | ___location = Cambridge | year = 2010 | isbn = 978-0-538-46924-1 | page=497}}</ref> In contrast, credit cards allow consumers to build a continuing balance of debt, subject to [[credit card interest|interest]] being charged at a [[Interest rate|specific rate]]. A credit card also differs from a charge card in that a credit card typically involves a third-party entity that pays the seller, and is reimbursed by the buyer, whereas a charge card simply defers payment by the buyer until a later date.{{Citation needed|date=August 2024|reason=Need a valid reference for this fact.}} A credit card also differs from a [[debit card]], which can be used like [[currency]] by the owner of the card.
{{as of|June 2018|post=,}} there were 7.753 billion credit cards in the world.<ref>{{cite web |url=https://nilsonreport.com/upload/issues/1140_0321.pdf |title=Payment Cards in Circulation Worldwide |work=Nilson Report |date=October 2018 |access-date=24 October 2022 |archive-date=3 November 2022 |archive-url=https://web.archive.org/web/20221103193837/https://nilsonreport.com/upload/issues/1140_0321.pdf }}</ref> In 2020, there were 1.09 billion credit cards in circulation in the United States, and 72.5% of adults (187.3 million) in the country had at least one credit card.<ref>{{cite web |url=https://nilsonreport.com/publication_chart_and_graphs_archive.php?1=1&year=2021. |title=Charts & Graphs Archive |work=Nilson Report |access-date=24 October 2022 |archive-date=12 May 2023 |archive-url=https://web.archive.org/web/20230512143334/https://nilsonreport.com/publication_chart_and_graphs_archive.php?1=1&year=2021. }}</ref><ref>{{cite web |url=https://nilsonreport.com/mention/1494/1link/ |title=Payment Cards in the U.S. Projected |work=Nilson Report |access-date=24 October 2022 |archive-date=24 October 2022 |archive-url=https://web.archive.org/web/20221024093602/https://nilsonreport.com/mention/1494/1link/ }}</ref><ref>{{cite web |url=https://fool.com/the-ascent/research/credit-debit-card-market-share-network-issuer |title=Credit and Debit Card Market Share by Network and Issuer |last=Gabrielle |first=Natasha |date=19 April 2022 |website=fool.com |access-date=24 October 2022}}</ref><ref name=KK>{{cite web |url=http://www.metasepia.com/wp-content/uploads/2019/11/Nilson-Report-1163.pdf |title=The Nilson Report |date=October 2019 |issue=1163 |access-date=13 October 2021 |archive-date=26 January 2021 |archive-url=https://web.archive.org/web/20210126210009/http://www.metasepia.com/wp-content/uploads/2019/11/Nilson-Report-1163.pdf }}</ref>
{{TOC limit|3}}
==Technical specifications==
[[File:CCardFront.svg|thumb|An example of the front in a typical credit card:
{{ordered list
| Issuing bank logo
| [[EMV|EMV chip]] (only on "smart cards")
| [[Hologram]]
| [[Bank card number|Card number]]
| Card network logo
| Expiration date
| Card holder name
| EMV Contactless indicator
}}]]
[[File:CCardBack.svg|thumb|An example of the reverse side of a typical credit card:
{{ordered list
| [[Magnetic stripe#Financial cards|Magnetic stripe]]
| [[Signature]] strip
| [[Card security code]]
}}]]
The size of most credit cards is {{convert|85.60|×|53.98|mm|in|frac=8}} and rounded corners with a radius of {{convert|2.88|–|3.48|mm|in|frac=80}}<!-- =1/8"±10% --><ref>ISO/IEC 7810:2003, clause 5, Dimensions of card</ref> conforming to the [[ISO/IEC 7810#ID-1|ISO/IEC 7810 ID-1]] standard, the same size as [[ATM card]]s and other [[payment card]]s, such as [[debit card]]s.<ref>{{citation
|url=http://www.iso.org/iso/catalogue_detail?csnumber=31432
|title=ISO/IEC 7810:2003 Identification cards — Physical characteristics
|access-date=30 August 2017
|archive-date=6 November 2016
|archive-url=https://web.archive.org/web/20161106084714/http://www.iso.org/iso/catalogue_detail?csnumber=31432
|url-status=live
}}</ref> Most credit cards are made of plastic, but some are made from metal.<ref name=HT>{{cite web |url=https://www.finder.com/the-most-exclusive-credit-cards-in-the-world|title=The 10 most exclusive credit cards in the world |website=finder.com |date=26 September 2017 |access-date=13 October 2021}}</ref><ref>{{cite web |url=https://www.payspacemagazine.com/banks/top-10-payment-cards-made-out-of-unusual-materials|title=Top 10 payment cards made out of unusual materials|work=Payspace Magazine |date=18 August 2020 |access-date=13 October 2021|archive-url=https://web.archive.org/web/20200929173149/https://payspacemagazine.com/banks/top-10-payment-cards-made-out-of-unusual-materials|archive-date=29 September 2020 |url-status=live}}</ref>
Credit cards have a printed<ref>{{cite web
|url=http://www.mastercard.com/ca/merchant/en/solutions/unembossed.html
|title=For Merchants - MasterCard Unembossed
|work=MasterCard
|access-date=11 August 2014
|archive-date=12 August 2014
|archive-url=https://web.archive.org/web/20140812211053/http://www.mastercard.com/ca/merchant/en/solutions/unembossed.html
|url-status=live
}}</ref> or [[Paper embossing|embossed]] [[bank card number]] complying with the [[ISO/IEC 7812]] numbering standard. The card number's ''prefix'', called the [[Bank Identification Number]] (known in the industry as a BIN<ref>{{cite web
|url=https://www.investopedia.com/terms/b/bank-identification-number.asp
|title=Bank Identification Number (BIN)
|access-date=23 July 2019
|archive-date=23 July 2019
|archive-url=https://web.archive.org/web/20190723170831/https://www.investopedia.com/terms/b/bank-identification-number.asp
|url-status=live
}}</ref>), is the sequence of digits at the beginning of the number that determine the bank to which a credit card number belongs. This is the first six digits for [[Mastercard|MasterCard]] and [[Visa Inc.|Visa]] cards. The next nine digits are the individual account number, and the final digit is a validity [[Luhn algorithm|check]] digit.<ref>{{cite web
|url=https://www.iso.org/standard/70484.html
|title=ISO/IEC 7812-1:2017 Identification cards — Identification of issuers — Part 1: Numbering system
|access-date=9 February 2021
|archive-date=26 February 2018
|archive-url=https://web.archive.org/web/20180226032040/https://www.iso.org/standard/70484.html
|url-status=live
}}</ref>
Both of these standards are maintained and further developed by [[ISO/IEC JTC 1/SC 17/WG 1]]. Credit cards have a [[Magnetic stripe card|magnetic stripe]] conforming to the [[ISO/IEC 7813]]. Most modern credit cards use [[smart card]] technology: they have a [[EMV|computer chip]] embedded in them as a security feature. In addition, complex smart cards, including peripherals such as a keypad, a display or a fingerprint sensor are increasingly used for credit cards.{{citation needed|date=November 2022}}
In addition to the main credit card number, credit cards also carry issue and expiration dates (given to the nearest month), as well as extra codes such as issue numbers and [[Card Security Code|security codes]]. Complex smart cards allow to have a variable security code, thus increasing security for online transactions. Not all credit cards have the same sets of extra codes nor do they use the same number of digits.{{citation needed|date=November 2022}}
Credit card numbers and cardholder names were originally embossed, to allow for easy transfer of such information to charge slips printed on [[carbon paper]] forms. With the decline of paper slips, some credit cards are no longer embossed and in fact the card number is no longer in the front.<ref>{{cite news
|last=Dunaway
|first=Jaime
|title=Why Are Credit Card Numbers on the Back Now?
|url=https://slate.com/business/2018/04/why-are-credit-card-numbers-on-the-back-of-the-card-now.html
|access-date=18 April 2018
|work=[[Slate (magazine)|Slate]]
|date=18 April 2018
|archive-date=18 April 2018
|archive-url=https://web.archive.org/web/20180418171654/https://slate.com/business/2018/04/why-are-credit-card-numbers-on-the-back-of-the-card-now.html
|url-status=live
}}</ref> In addition, some cards are now vertical in design, rather than horizontal.
==History==
{{Numismatics}}
===Early charge coins and cards===
Beginning in the late 19th century, ''[[charge card]]s'' came in various shapes and sizes, made of [[celluloid]] (an early type of plastic), copper, aluminum, steel, and other types of whitish metals.<ref>{{cite web|url=http://www.creditcards.com/credit-card-news/credit-collectible-coins-charge-plate-1264.php|title=Life before plastic: Historical look at credit card materials|work=creditcards.com|date=12 August 2021|access-date=12 January 2014|archive-date=13 January 2014|archive-url=https://web.archive.org/web/20140113005825/http://www.creditcards.com/credit-card-news/credit-collectible-coins-charge-plate-1264.php}}</ref> Some were shaped like coins, with a little hole enabling it to be put in a key ring. These charge coins were usually given to customers who had charge accounts in hotels or department stores. Each had a charge account number, along with the merchant's name and logo.
The charge coin offered a simple and fast way to copy a charge account number to the sales slip, by imprinting the coin onto the sales slip.<ref>{{cite web|url=http://shoppingdaysinretroboston.blogspot.com/2013/03/charge-coins-come-to-retro-boston.html|title=Shopping Days In Retro Boston|author=Charles Boston|work=shoppingdaysinretroboston.blogspot.com|date=6 March 2013|access-date=12 January 2014|archive-date=15 January 2014|archive-url=https://web.archive.org/web/20140115092705/http://shoppingdaysinretroboston.blogspot.com/2013/03/charge-coins-come-to-retro-boston.html|url-status=live}}</ref><ref>{{cite web
|url=http://departmentstoremuseum.blogspot.com/2010/11/charge-cards.html|title=The Department Store Museum: Charge Cards|work=departmentstoremuseum.blogspot.com|access-date=12 January 2014|archive-date=15 January 2014|archive-url=https://web.archive.org/web/20140115094420/http://departmentstoremuseum.blogspot.com/2010/11/charge-cards.html|url-status=live}}</ref> The Charga-Plate, developed in 1928, was an early predecessor of the credit card and was used in the U.S. from the 1930s to the late 1950s. It was a {{convert|2+1/2|×|1+1/4|in|mm|adj=on}} rectangle of sheet metal related to [[Addressograph]] and military [[Dog tag (identifier)|dog tag]] systems. It was embossed with the customer's name, city, and state<!-- Yes, no street address -->. It held a small paper card on its back for a signature. In recording a purchase, the plate was laid into a recess in the [[credit card imprinter|imprinter]], with a paper "charge slip" positioned on top of it. The record of the transaction included an impression of the embossed information, made by the imprinter pressing an [[typewriter ribbon|inked ribbon]] against the charge slip.<ref>{{cite web |url=http://cultureandcommunication.org/deadmedia/index.php/Credit_Card_Imprinter |title=Credit card imprinter |publisher=Cultureandcommunication.org |access-date=28 July 2011 |archive-date=25 July 2011 |archive-url=https://web.archive.org/web/20110725213317/http://cultureandcommunication.org/deadmedia/index.php/Credit_Card_Imprinter }}</ref> Charga-Plate was a trademark of [[Farrington Manufacturing Co]].<ref>{{cite web|url=http://law.justia.com/cases/federal/appellate-courts/F2/215/668/55263/|title=Hartford Charga-plate Associates, Incorporated, Plaintiff-appellant, v. Youth Centre-cinderella Stores, Inc., Defendant-respondent, 215 F.2d 668 (1954)|access-date=11 November 2014|quote=The only approach to any of this was an original contention by plaintiff's manufacturer, the Farrington Manufacturing Company, that defendant was violating its registered trade-mark Charga-Plate. But the defendant thereafter instructed its clerks to use some other term, e.g., charge plate or credit plate, and no claim of trade-mark infringement is before us.|archive-date=11 November 2014|archive-url=https://archive.today/20141111110202/http://law.justia.com/cases/federal/appellate-courts/F2/215/668/55263/|url-status=live}}</ref> Charga-Plates were issued by large-scale merchants to their regular customers, much like later department store credit cards. In some cases, the plates were kept in the issuing store rather than held by customers. When an authorized user made a purchase, a clerk retrieved the plate from the store's files and then processed the purchase. Charga-Plates sped up back-office bookkeeping and reduced manual copying errors.
===={{anchor|Air Travel Card}}Air Travel Card====
In 1934, [[American Airlines]] and the [[Air Transport Association]] simplified the process even more with the advent of the [[Universal Air Travel Plan|Air Travel Card]].<ref>{{cite magazine |author=<!--Staff writer(s); no by-line.--> |title=The Travel Card that gave "CREDIT" to the public |url=https://books.google.com/books?id=aXIHl--RuqkC&pg=PA11 |magazine=[[Flying (magazine)|Flying]] |date=June 1953 |volume=52 |issue=6 |page=11 |access-date=11 November 2018}}</ref> They created a numbering scheme that identified the issuer of the card as well as the customer account. This is the reason the modern [[Universal Air Travel Plan|UATP]] cards still start with the number 1. With an Air Travel Card, passengers could "buy now, and pay later" for a ticket against their credit and receive a fifteen percent discount at any of the accepting airlines. By the 1940s, all of the major U.S. airlines offered Air Travel Cards that could be used on 17 different airlines. By 1941, about half of the airlines' revenues came through the Air Travel Card agreement. The airlines had also started offering installment plans to lure new travellers into the air. In 1948, the Air Travel Card became the first internationally valid charge card within all members of the [[International Air Transport Association]].<ref>{{cite web |url=http://www.creditcardprocessingspace.com/history-of-the-credit-card/ |title=History Of The Credit Card |date=14 February 2013 |publisher=www.creditcardprocessingspace.com |access-date=14 February 2013 |archive-date=25 February 2013 |archive-url=https://web.archive.org/web/20130225085328/http://www.creditcardprocessingspace.com/history-of-the-credit-card/ |url-status=live }}</ref>
====Early general purpose charge cards====
The concept of customers paying different merchants using the same card was expanded in 1950 by Ralph Schneider and [[Frank X. McNamara|Frank McNamara]], founders of [[Diners Club]], to consolidate multiple cards. The Diners Club, which was created partially through a merger with Dine and Sign, produced the first "general purpose" [[charge card]] and required the entire bill to be paid with each statement. That was followed by [[Carte Blanche (credit card)#Carte Blanche|Carte Blanche]] and in 1958 by [[American Express]] which created a worldwide credit card network (although these were initially charge cards that later acquired credit card features).
===BankAmericard and Master Charge===
[[File:Mastercharge_and_Bankamericard.jpg|thumb|upright=0.8|right|Metal signs at a plant nursery in Los Angeles County, California marketing Mastercharge and Bankamericard]]
Until 1958, no one had been able to successfully establish a ''revolving credit'' financial system in which a card issued by a third-party bank was being generally accepted by a large number of merchants, as opposed to merchant-issued revolving cards accepted by only a few merchants. There had been a dozen attempts by small American banks, but all were short-lived.{{Citation needed|date=August 2024}} In 1958, [[Bank of America]] launched the ''BankAmericard'' in [[Fresno, California]], which became the first successful recognizably modern credit card.<ref>{{Cite web |last=Vanatta |first=Sean |date=2024 |title=How did America become the nation of credit cards? |url=https://aeon.co/essays/how-did-america-become-the-nation-of-credit-cards |website=Aeon |language=en |access-date=23 April 2024 |archive-date=23 April 2024 |archive-url=https://web.archive.org/web/20240423033348/https://aeon.co/essays/how-did-america-become-the-nation-of-credit-cards |url-status=live }}</ref> This card succeeded where others failed by breaking the [[chicken-and-egg]] cycle in which consumers did not want to use a card that few merchants would accept and merchants did not want to accept a card that few consumers used. Bank of America chose Fresno because 45% of its residents used the bank, and by sending a card to 60,000 Fresno residents at once, the bank was able to convince merchants to accept the card.<ref name=":0" /> It was eventually licensed to other banks around the United States and then around the world, and in 1976, all BankAmericard licensees united themselves under the common brand [[Visa Inc.|Visa]]. In 1966, the ancestor of [[MasterCard]] was born when a group of banks established Master Charge to compete with BankAmericard; it received a significant boost when [[Citibank]] merged its own [[Everything Card]], launched in 1967, into Master Charge in 1969.
Early credit cards in the U.S., of which BankAmericard was the most prominent example, were mass-produced and mass mailed unsolicited to bank customers who were thought to be low risk. According to ''[[Life (magazine)|LIFE]]'', cards were "mailed off to unemployable people, drunks, narcotics addicts and to compulsive debtors," which [[Betty Furness]], President Johnson's Special Assistant, compared to "giving sugar to [[diabetics]]."<ref>{{cite magazine |author=O'Neill, Paul |title=A Little Gift from Your Friendly Banker |magazine=[[Life (magazine)|LIFE]] |url=https://www.pbs.org/wgbh/pages/frontline/shows/credit/more/life.html |via=[[Frontline (American TV program)|Frontline]] |date=27 April 1970 |access-date=2023-05-13 |archive-date=13 May 2023 |archive-url=https://web.archive.org/web/20230513021328/https://www.pbs.org/wgbh/pages/frontline/shows/credit/more/life.html |url-status=live }}</ref> These mass mailings were known as "drops" in banking terminology, and were outlawed in 1970 due to the financial chaos they caused. However, by the time the law came into effect, approximately 100 million credit cards had been dropped into the U.S. population. After 1970, only credit card applications could be sent unsolicited in mass mailings.
This system was computerized in 1973 under the leadership of [[Dee Hock]], the first CEO of Visa, allowing reduced transaction time.<ref name="pricenomics">{{cite web |last=Mayyasi |first=Alex |date=8 January 2016 |title=How Credit Cards Tax America |url=http://priceonomics.com/how-credit-cards-tax-america/ |website=Pricenomics |access-date=11 January 2016 |archive-date=11 January 2016 |archive-url=https://web.archive.org/web/20160111072113/http://priceonomics.com/how-credit-cards-tax-america/ |url-status=live }}</ref> However, until always-connected [[payment terminal]]s became ubiquitous at the beginning of the 21st century, many merchants accepted all charges, especially those below a threshold value or from known and trusted customers, without verifying them by phone. Books with lists of stolen card numbers were distributed to merchants who were expected in any case to check cards against the list before accepting them, as well as verifying the signature on the charge slip against that on the card. Merchants who failed to take the time to follow the proper verification procedures were liable for fraudulent charges, but because the procedures were cumbersome, merchants often skipped some or all of them and assumed the risk for smaller transactions.
The early credit card industry in the [[United States]] was characterized by regional monopolies. Several landmark anti-trust court cases, including the 1978 Supreme Court case ''Marquette National Bank of Minneapolis v. First of Omaha Service Corp.,'' led to substantial reforms that made the credit card industry more competitive. A 2024 study estimated that these competitive reforms resulted in substantial welfare gains, in particular for the poor.<ref>{{Cite web |date=2024 |title=Who Bears the Welfare Costs of Monopoly? The Case of the Credit Card Industry |url=https://www.restud.com/who-bears-the-welfare-costs-of-monopoly-the-case-of-the-credit-card-industry/ |website=The Review of Economic Studies |language=en-GB |access-date=29 October 2024 |archive-date=7 November 2024 |archive-url=https://web.archive.org/web/20241107163617/https://www.restud.com/who-bears-the-welfare-costs-of-monopoly-the-case-of-the-credit-card-industry/ |url-status=live }}</ref>
===Development outside North America===
The fragmented nature of the U.S. banking system regulation under the [[Glass–Steagall Act]] made credit cards an effective way for those who were travelling around the country to move their credit to places where they could not directly use their banking facilities. There are now countless variations on the basic concept of revolving credit for individuals (as issued by banks and honored by a network of financial institutions), including organization-branded credit cards, corporate-user credit cards and store cards. In 1966, [[Barclaycard]] in the [[United Kingdom]] launched the first credit card outside the United States.
Although credit cards reached very high adoption levels in the U.S., Canada, the U.K., Australia, and New Zealand during the latter 20th century, many cultures were more cash-oriented or developed alternative forms of cashless payments, such as [[Carte Bleue|Carte bleue]] or the [[Eurocard (payment card)|Eurocard]] (Germany, France, Switzerland, and others). In these places, the adoption of credit cards was initially much slower.<ref name=CashOrientedHistory>{{cite news|newspaper=[[The New York Times]]|url=https://www.nytimes.com/1979/09/30/archives/taking-money-abroad-in-a-new-era-practical-traveler.html|title=Taking Money Abroad in a New Era|author=Paul Grimes|date=30 September 1979|access-date=31 August 2022|archive-date=31 August 2022|archive-url=https://web.archive.org/web/20220831164122/https://www.nytimes.com/1979/09/30/archives/taking-money-abroad-in-a-new-era-practical-traveler.html|url-status=live}}</ref> Due to strict regulations regarding bank overdrafts, some countries, France in particular, were much quicker to develop and adopt chip-based credit cards which are seen as major anti-fraud credit devices. [[Debit card]]s, [[online banking]], [[Automated teller machine|ATM]]s, [[mobile banking]], and [[installment plan]]s are used more widely than credit cards in some countries. It took until the 1990s to reach anything like the percentage market penetration levels achieved in the U.S., Canada, and U.K. In some countries, acceptance still remains low as the use of a credit card system depends on the banking system of each country; while in others, a country sometimes had to develop its own credit card network, e.g. U.K.'s Barclaycard and [[Australia]]'s [[Bankcard]]. [[Japan]] remains a very cash-oriented society, with credit card adoption being limited mainly to the largest of merchants; although stored value cards (such as [[telephone cards]]) are used as [[Telephone token|alternative currencies]], the trend is toward [[RFID]]-based systems inside cards, cellphones, and other objects.
===Design and vintage credit cards as collectibles===
[[File:Credit card receipt - old style.jpg|right|thumb|Receipt from 1997 – card physically swiped and information imprinted on the receipt]]
The design of the credit card itself has become a major selling point.<ref>{{Cite news |url=https://www.marketwatch.com/story/the-latest-american-status-symbol-metal-credit-cards-2017-04-25 |title=Metal credit cards: The latest American status symbol |last=LaMagna |first=Maria |work=MarketWatch |access-date=7 March 2018 |language=en-US |archive-date=7 March 2018 |archive-url=https://web.archive.org/web/20180307214332/https://www.marketwatch.com/story/the-latest-american-status-symbol-metal-credit-cards-2017-04-25 |url-status=live }}</ref> A growing field of [[numismatics]] (study of money), or more specifically [[exonumia]] (study of money-like objects), credit card collectors seek to collect various embodiments of credit from the now familiar [[plastic card]]s to older paper merchant cards, and even [[metal]] tokens that were accepted as merchant credit cards. Early credit cards were made of [[celluloid]] plastic, then metal and [[fiber]], then paper, and are now mostly [[polyvinyl chloride]] (PVC) plastic. However, the chip part of credit cards is made from metals.<ref name=NotPlayDough>{{cite news |newspaper=[[The New York Times]]|url=https://www.nytimes.com/2018/04/08/business/credit-card-signatures.html |url-access=subscription |title=Credit Card Signatures Are About to Become Extinct in the U.S.|quote=embedded with computer chips ... [[microchip]]s|author=Stacy Cowley |date=8 April 2018 |access-date=31 August 2022}}</ref>
==Cash advance==
{{redirect-distinguish|cash advance|payday loans}}
A '''cash advance''' is a credit card transaction that withdraws [[cash]] rather than purchasing something. The process can take place either through an [[automatic teller machine|ATM]] or over the counter at a bank or other financial agency, up to a certain limit; for a credit card, this will be the credit limit (or some percentage of it). Cash advances often incur a fee of 3%-5% of the amount being borrowed. When made on a credit card, the interest is often higher than other credit card transactions. The interest compounds daily starting from the day cash is borrowed.<ref name=":1">{{Cite news |last=Carrns |first=Ann |date=2020-04-24 |title=Beware the Fees That Come With Some Money Transfers on Apps |url=https://www.nytimes.com/2020/04/24/your-money/fees-mobile-app-payments.html |access-date=2025-07-01 |work=The New York Times |language=en-US |issn=0362-4331}}</ref> <!--- NYT: "Updated Nov. 6, 2020" -->
Credit-card purchases of items that are viewed as cash are sometimes deemed cash advances in accordance with the credit card network's guidelines, thereby incurring the higher interest rate and the lack of the [[grace period]].<ref>{{Cite news |last=Jr |first=Robert D. Hershey |date=1998-04-26 |title=SPENDING IT: FOCUS ON BANKING; That Layered Look In Cash-Advance Fees |url=https://www.nytimes.com/1998/04/26/business/spending-it-focus-on-banking-that-layered-look-in-cash-advance-fees.html |access-date=2025-07-01 |work=The New York Times |language=en-US |issn=0362-4331}}</ref> These often include [[money order]]s, [[Debit card#Prepaid debit cards|prepaid debit cards]], [[lottery]] tickets, [[gaming chip]]s, mobile payments<ref name=":1" /> and certain taxes and fees paid to certain governments. However, should the merchant not disclose the actual nature of the transactions, these will be processed as regular credit card transactions. Many merchants have passed on the credit card processing fees to the credit card holders in spite of the credit card network's guidelines, which state the credit card holders should not have any extra fee for doing a transaction with a credit card.
Under card scheme rules, a credit card holder presenting an accepted form of identification must be issued a cash advance over the counter at any bank which issues that type of credit card, even if the cardholder cannot provide his [[personal identification number|PIN]].
A Japanese law enabling credit card cash back came into force in 2010. However, a legal loophole in this system was quickly exploited by online shops dedicated to providing cash back as a form of easy loan with exorbitant rates. At first, the online store sells a single inexpensive item of glass marble, golf tee, or eraser with an 80,000 yen wire transfer for a 100,000 [[Japanese yen|yen]] (1,200 US dollar) credit card payment. A month later, when the credit card provider charges the card owner with the full fee, the online store is out of the picture with no liability. In effect, what the online cash back services provide are loans with a 300% annual interest rate. On 19 October 2010, Hideki Fukuba became the first operator of such an online cash back service to be charged by the police. He was charged on tax evasion of 40 million yen in unpaid taxes.<ref>{{cite web |url=https://trulytokyo.com/getting-money-in-japan |title=Getting Money in Japan |access-date=31 August 2022 |archive-date=31 August 2022 |archive-url=https://web.archive.org/web/20220831162731/https://trulytokyo.com/getting-money-in-japan/ |url-status=live }}</ref><ref>{{citation|url=https://asia.nikkei.com/Business/Business-trends/Bad-debt-from-cash-advances-piles-up-at-Japan-s-megabanks|title=Bad debt from cash advances piles up at Japan's megabank|date=21 June 2018|access-date=31 August 2022|archive-date=31 August 2022|archive-url=https://web.archive.org/web/20220831162729/https://asia.nikkei.com/Business/Business-trends/Bad-debt-from-cash-advances-piles-up-at-Japan-s-megabanks|url-status=live}}</ref><ref>{{citation|url=https://www.japan-guide.com/forum/quereadisplay.html?0%2B125146|title=Cash advance on Visa cheapest way in Japan|date=3 May 2015|access-date=31 August 2022|archive-date=28 March 2023|archive-url=https://web.archive.org/web/20230328153933/https://www.japan-guide.com/forum/quereadisplay.html?0+125146}}</ref>
==
[[File:Credit card logos (2015-12-1816-27-350044).jpg|thumbnail|upright=0.8|right|[[Visa credit card|Visa]], [[MasterCard]], and [[American Express]] are card-issuing entities that set transaction terms for merchants, card-issuing banks, and acquiring banks.]]
A credit card issuer, such as a bank or credit union, enters into agreements with merchants for them to accept its credit cards. Merchants often advertise in signage or other company material which cards they accept by displaying [[acceptance mark]]s generally derived from logos. Alternatively, this may be communicated, for example, via a restaurant's menu or orally, or stating, "We don't take credit cards".
The credit card issuer issues a credit card to a customer at the time or after an account has been approved by the credit provider, which need not be the same entity as the card issuer. The cardholders can then use it to make purchases at merchants accepting that card. When a purchase is made, the cardholder agrees to pay the card issuer. The cardholder indicates consent to pay by signing a [[receipt]] with a record of the card details and indicating the amount to be paid or by entering a [[personal identification number]] (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a [[card not present transaction]] (CNP).
[[Electronics|Electronic]] [[Credit card verification|verification]] systems allow merchants to verify in a few seconds that the card is valid and the cardholder has sufficient credit to cover the purchase, allowing the verification to happen at time of purchase. The verification is performed using a [[credit card terminal|credit card payment terminal]] or [[point of sale|point-of-sale]] (POS) system with a communications link to the merchant's acquiring bank. Data from the card is obtained from a [[Magnetic stripe card|magnetic stripe]] or [[Smart card|chip]] on the card; the latter system is called [[Chip and PIN]] in the [[United Kingdom]] and [[Ireland]], and is implemented as an [[EMV]] card.
For [[card not present transaction]]s where the card is not shown (e.g., [[Electronic commerce|e-commerce]], [[mail order]], and telephone sales), merchants additionally verify that the customer is in physical possession of the card and is the authorized user by asking for additional information such as the [[Card Security Code|security code]] printed on the back of the card, date of expiry, and billing address.
Each month, the cardholder is sent a statement indicating the purchases made with the card, any outstanding fees, the total amount owed and the minimum payment due. In the U.S., after receiving the statement, the cardholder may dispute any charges that are thought to be incorrect (see {{USC|15|1643}}, which limits cardholder liability for unauthorized use of a credit card to $50). The [[Fair Credit Billing Act]] gives details of the U.S. regulations.
Many banks now also offer the option of electronic statements, either in lieu of or in addition to physical statements, which can be viewed at any time by the cardholder via the issuer's [[online banking]] website. Notification of the availability of a new statement is generally sent to the cardholder's [[email]] address. If the card issuer has chosen to allow it, the cardholder may have other options for payment besides a physical check, such as an electronic transfer of funds from a checking account. Depending on the issuer, the cardholder may also be able to make multiple payments during a single statement period, possibly enabling him or her to utilize the credit limit on the card several times.
===Minimum payment===
The cardholder must pay a defined minimum portion of the amount owed by a due date or may choose to pay a higher amount. The credit issuer charges [[interest]] on the unpaid balance if the billed amount is not paid in full (typically at a much higher rate than most other forms of debt). This impact accounts for roughly 8% of all interest ever paid. Thus, hiding the minimum payment option for automatic and manual payments and focusing on the total debt may mitigate the unwanted consequences of default minimum payments.<ref>{{Cite journal |last1=Sakaguchi |first1=Hiroaki |last2=Stewart |first2=Neil |last3=Gathergood |first3=John |last4=Adams |first4=Paul |last5=Guttman-Kenney |first5=Benedict |last6=Hayes |first6=Lucy |last7=Hunt |first7=Stefan |date=August 2022 |title=Default Effects of Credit Card Minimum Payments |url=http://journals.sagepub.com/doi/10.1177/00222437211070589 |journal=Journal of Marketing Research |language=en |volume=59 |issue=4 |pages=775–796 |doi=10.1177/00222437211070589 |s2cid=245303167 |issn=0022-2437 |archive-date=11 November 2023 |access-date=18 July 2023 |archive-url=https://web.archive.org/web/20231111140743/https://journals.sagepub.com/doi/10.1177/00222437211070589 |url-status=live }}</ref> In addition, if the cardholder fails to make at least the minimum payment by the due date, the issuer may impose a [[late fee]] or other penalties. To help mitigate this, some financial institutions can arrange for automatic payments to be deducted from the cardholder's bank account, thus avoiding such penalties altogether, as long as the cardholder has sufficient funds.
In cases where the minimum payment is less than the finance charges and fees assessed during the billing cycle, the outstanding balance will increase in what is called [[negative amortization]]. This practice tends to increase credit risk and mask the lender's portfolio quality and consequently has been banned in the U.S. since 2003.<ref>{{cite web|url=https://www.federalreserve.gov/boarddocs/press/bcreg/2003/20030108/attachment.pdf|title=Credit Card Lending|access-date=15 June 2019|archive-date=8 August 2019|archive-url=https://web.archive.org/web/20190808170809/https://www.federalreserve.gov/boarddocs/press/bcreg/2003/20030108/attachment.pdf|url-status=live}}</ref><ref>{{cite web|url=https://www.creditcards.com/credit-card-news/minimum-credit-card-payments-1267.php|title=Understanding how credit card minimum payments are set|access-date=15 June 2019|archive-date=29 June 2019|archive-url=https://web.archive.org/web/20190629131528/https://www.creditcards.com/credit-card-news/minimum-credit-card-payments-1267.php}}</ref>
===Advertising, solicitation, application and approval===
Credit card advertising regulations in the U.S. include the [[Schumer box]] disclosure requirements. A large fraction of junk mail consists of the credit card offers created from lists provided by the major [[credit reporting agency|credit reporting agencies]]. In the United States, the three major U.S. credit bureaus ([[Equifax]], [[TransUnion]] and [[Experian]]) allow consumers to opt out from related credit card solicitation offers via its [[Optoutprescreen.com|Opt Out Pre Screen]] program.
===Interest charges===
Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.
For example, if a user had a $1,000 transaction and repaid it in full within this grace period, there would be no interest charged. If, however, even $1.00 of the total amount remained unpaid, interest would be charged on the $1,000 from the date of purchase until the payment is received. The precise manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement. The general calculation formula most financial institutions use to determine the amount of interest to be charged is (APR/100 x ADB)/365 x number of days revolved. Take the [[annual percentage rate]] (APR) and divide by 100 then multiply to the amount of the average daily balance (ADB). Divide the result by 365 and then take this total and multiply by the total number of days the amount revolved before payment was made on the account. Financial institutions refer to interest charged back to the original time of the transaction and up to the time a payment was made, if not in full, as a residual retail finance charge (RRFC). Thus after an amount has revolved and a payment has been made, the user of the card will still receive interest charges on their statement after paying the next statement in full (in fact the statement may only have a charge for interest that collected up until the date the full balance was paid, i.e., when the balance stopped revolving).
The credit card may simply serve as a form of [[revolving credit]], or it may become a complicated financial instrument with multiple balance segments each at a different interest rate, possibly with a single umbrella credit limit, or with separate credit limits applicable to the various balance segments. Usually, this compartmentalization is the result of special incentive offers from the issuing bank, to encourage [[balance transfer]]s from cards of other issuers. If several interest rates apply to various balance segments, then payment allocation is generally at the discretion of the issuing bank, and payments will therefore usually be allocated towards the lowest rate balances until paid in full before any money is paid towards higher rate balances. [[Interest rate]]s can vary considerably from card to card, and the interest rate on a particular card may jump dramatically if the card user is late with a payment on that card ''or any other credit instrument'', or even if the issuing bank decides to raise its revenue.{{citation needed|date=July 2018}}
===Grace period===
A credit card's grace period<ref name=BadAdvanceNYT>{{cite news |newspaper=[[The New York Times]]|url=https://www.nytimes.com/2017/05/19/your-money/credit-and-debit-cards/cash-advances-on-credit-cards-are-an-expensive-form-of-debt.html|title=Steer Clear of This 'Bad Idea': Cash Advances on Credit Cards|author=Ann Carrns|date=19 May 2017|access-date=28 August 2022}}</ref><ref name=":1" /> is the time the cardholder has to pay the balance before interest is assessed on the outstanding balance. Grace periods may vary but usually range from 20 to 55 days depending on the type of credit card and the issuing bank. Some policies allow for reinstatement after certain conditions are met. Usually, if a cardholder is late paying the balance, finance charges will be calculated and the grace period does not apply. Finance charges incurred depend on the grace period and balance; with most credit cards there is no grace period if there is any outstanding balance from the previous billing cycle or statement (i.e. interest is applied on both the previous balance and new transactions). However, there are some credit cards that will only apply finance charges on the previous or old balance, excluding new transactions.
===Parties involved===
* Cardholder: The holder of the card used to make a purchase; the [[consumer]]. Do not pay fraudulent charges on the US credit cards.
* Card-issuing bank: The financial institution or other organization that issued the credit card to the cardholder. This bank bills the consumer for repayment and bears the risk that the card is used fraudulently. American Express and Discover were previously the only card-issuing banks for their respective brands, but as of 2007, this is no longer the case. Cards issued by banks to cardholders in a different country are known as [[offshore credit card]]s. In the U.S., credit card issuers do not have to inform cardholders when they close any credit card even cards with balances.
* Merchant: The individual or business accepting credit card payments for products or services sold to the cardholder.
* [[Acquiring bank]]: The financial institution accepting payment for the products or services on behalf of the merchant.
* [[Independent sales organization]]: Re-sellers (to merchants) of the services of the acquiring bank.
* [[Merchant account]]: This could refer to the acquiring bank or the independent sales organization, but generally is the organization with whom the merchant deals.
* [[Card association]]: An association of card-issuing banks such as [[Discover Card|Discover]], [[Visa (company)|Visa]], [[MasterCard]], [[American Express]] that set transaction terms for merchants, card-issuing banks, and acquiring banks.
* Transaction network: The system that implements the mechanics of electronic transactions. May be operated by an independent company, and one company may operate multiple networks.
* Affinity partner: Some institutions lend their names to an issuer to attract customers that have a strong relationship with that institution, and get paid a fee or a percentage of the balance for each card issued using their name. Examples of typical affinity partners are sports teams, universities, charities, professional organizations, and major retailers.
* Insurance providers: Insurers underwriting various insurance protections offered as credit card perks; for example, Car Rental Insurance, Purchase Security, Hotel Burglary Insurance, and Travel Medical Protection.
The flow of information and money between these parties—always through the card associations—is known as the interchange, and it consists of a few steps.
===Transaction steps===
* '''[[Authorization hold|Authorization]]''': The cardholder presents the card as payment to the merchant and the merchant submits the transaction to the acquirer (acquiring bank). The acquirer verifies the credit card number, the transaction type and the amount with the issuer (card-issuing bank) and reserves that amount of the cardholder's credit limit for the merchant. An authorization will generate an approval code, which the merchant stores with the transaction.
* '''Batching''': Authorized transactions are stored in "batches", which are sent to the acquirer. Batches are typically submitted once per day at the end of the business day. Batching can be done manually (initiated by a merchant's action) or automatically (on a pre-determined schedule, using a payment processing platform). If a transaction is not submitted in the batch, the authorization will stay valid for a period determined by the issuer, after which the held amount will be returned to the cardholder's available credit (see [[authorization hold]]). Some transactions may be submitted in the batch without prior authorizations; these are either transactions falling under the merchant's [[floor limit]] or ones where the authorization was unsuccessful but the merchant still attempts to force the transaction through. (Such may be the case when the cardholder is not present but owes the merchant additional money, such as extending a hotel stay or car rental.)
* '''Clearing and settlement''': The acquirer sends the batch transactions through the credit card association, which debits the issuers for payment and credits the acquirer. Essentially, the issuer pays the acquirer for the transaction.
* '''Funding''': Once the acquirer has been paid, the acquirer pays the merchant. The merchant receives the amount totalling the funds in the batch minus either the "discount rate", "mid-qualified rate", or "non-qualified rate" which are tiers of fees the merchant pays the acquirer for processing the transactions.
* '''Chargebacks''': A [[chargeback]] is an event in which money in a merchant account is held due to a dispute relating to the transaction. Chargebacks are typically initiated by the cardholder. In the event of a chargeback, the issuer returns the transaction to the acquirer for resolution. The acquirer then forwards the chargeback to the merchant, who must either accept the chargeback or contest it.
=== Credit card register ===
A credit card register is a transaction register used to ensure the increasing balance owed from using a credit card is enough below the credit limit to deal with authorization holds and payments not yet received by the bank and to easily look up past transactions for reconciliation and budgeting.
The register is a personal record of banking transactions used for credit card purchases as they affect funds in the bank account or the available credit. In addition to checking numbers and so forth the code column indicates the credit card. The balance column shows available funds after purchases. When the credit card payment is made the balance already reflects the funds were spent. In a credit card's entry, the deposit column shows the available credit and the payment column shows the total owed, their sum being equal to the credit limit.
Each check is written, debit card transaction, cash withdrawal, and credit card charge are entered manually into the paper register daily or several times per week.<ref>{{Cite book |last=Little |first=Ken |url=https://books.google.com/books?id=uPmUliMCKQwC&dq=personal%20credit%20card%20and%20debit%20card%20registers%20or%20transaction%20records&pg=PA35 |title=Personal Finance at Your Fingertips |date=2007-07-03 |publisher=Penguin |isbn=978-1-4406-2562-6 |language=en}}</ref> Credit card register also refers to one transaction record for each credit card. In this case, the booklets readily enable the ___location of a card's current available credit when ten or more cards are in use.{{citation needed|date=February 2016}}
==Specialized types==
===Business credit cards===
{{See also|Stored-value card}}
Business credit cards are specialized credit cards issued in the name of a registered business, and typically they can only be used for business purposes. Their use has grown in recent decades. In 1998, for instance, 37% of small businesses reported using a business credit card; by 2009, this number had grown to 64%.<ref name=FedReport>{{cite web|title=Report to the Congress on the Use of Credit Cards by Small Businesses and the Credit Card Market for Small Businesses|url=http://www.federalreserve.gov/newsevents/conferences/sbc_smallbusinesscredit.pdf|website=Federal Reserve|publisher=Board of Governors of the Federal Reserve System|access-date=4 May 2015|date=May 2010|archive-date=25 April 2015|archive-url=https://web.archive.org/web/20150425064306/http://www.federalreserve.gov/newsevents/conferences/sbc_smallbusinesscredit.pdf|url-status=live}}</ref>
Business credit cards offer a number of features specific to businesses. They frequently offer special rewards in areas such as shipping, office supplies, travel, and business technology. Most issuers use the applicant's personal [[credit score]] when evaluating these applications. In addition, income from a variety of sources may be used to qualify, which means these cards may be available to new businesses.<ref>{{Cite news|url=https://www.allbusiness.com/5-business-credit-card-myths-can-cost-business-109526-1.html|title=5 Business Credit Card Myths That Can Cost Your Business {{!}} AllBusiness.com|date=21 December 2016|work=AllBusiness.com|access-date=10 April 2017|language=en-US|archive-date=11 April 2017|archive-url=https://web.archive.org/web/20170411062038/https://www.allbusiness.com/5-business-credit-card-myths-can-cost-business-109526-1.html|url-status=live}}</ref> In addition, some issuers of this card do not report account activity to the owner's personal credit, or only do so if the account is delinquent.<ref>{{cite news |last1=Luthi |first1=Ben |title=Do Business Credit Cards Affect Your Personal Credit? |url=https://creditcards.usnews.com/articles/do-business-credit-cards-affect-your-personal-credit |access-date=16 May 2021 |work=U.S. News & World Report |date=7 October 2019 |archive-date=16 May 2021 |archive-url=https://web.archive.org/web/20210516231540/https://creditcards.usnews.com/articles/do-business-credit-cards-affect-your-personal-credit }}</ref> In these cases, the activity of the business is separated from the owner's personal credit activity.
Business credit cards are offered by American Express, Discover, and almost all major issuers of Visa and MasterCard cards. Some local banks and credit unions also offer business credit cards.
===Secured credit cards===
A secured credit card is a type of credit card secured by a [[deposit account]] owned by the cardholder. Typically, the cardholder must deposit between 100% and 200% of the total amount of credit desired. Thus if the cardholder puts down $1,000, they will be given credit in the range of $500–1,000. In some cases, credit card issuers will offer incentives even on their secured card portfolios. In these cases, the deposit required may be significantly less than the required credit limit and can be as low as 10% of the desired credit limit. This deposit is held in a special [[savings deposit|savings account]]. Credit card issuers offer this because they have noticed that delinquencies were notably reduced when the customer perceives something to lose if the balance is not repaid.
The cardholder of a secured credit card must still make regular payments, as with a regular credit card, but should they default on a payment, the card issuer has the option of recovering the cost of the purchases paid to the merchants out of the deposit. The advantage of the secured card for an individual with negative or no [[credit history]] is that most companies report regularly to the major credit bureaus. This allows the cardholder to start building (or re-building) a positive credit history.
Although the deposit is in the hands of the credit card issuer as security in the event of default by the consumer, the deposit will not be debited simply for missing one or two payments. Usually, the deposit is only used as an offset when the account is closed, either at the request of the customer or due to severe delinquency (150 to 180 days). This means that an account that is less than 150 days delinquent will continue to accrue interest and fees, and could result in a balance that is much higher than the actual credit limit on the card. In these cases, the total debt may far exceed the original deposit and the cardholder not only forfeits their deposit but is left with additional debt.
Most of these conditions are usually described in a cardholder agreement which the cardholder signs when opening an account.
Secured credit cards are an option to allow a person with a poor credit history or no credit history to have a credit card that might not otherwise be available. They are often offered as a means of rebuilding one's credit. Fees and service charges for secured credit cards often exceed those charged for ordinary non-secured credit cards. For people in certain situations (for example, after charging off on other credit cards, or people with a long history of delinquency on various forms of debt), secured cards are almost always more expensive than unsecured credit cards.
Sometimes a credit card will be secured by [[home equity|the equity in the borrower's home]].
===Prepaid cards===
{{See also|Stored-value card}}
They are sometimes called "prepaid credit card", but they are a debit card (prepaid card or prepaid debit card),<ref name="fcac"/> since no credit is offered by the card issuer: the cardholder spends money which has been "stored" via a prior deposit by the cardholder or someone else. However, it carries a credit-card brand (such as [[Discover Card|Discover]], [[Visa Inc.|Visa]], [[MasterCard]], [[American Express]], or [[Japan Credit Bureau|JCB]]) and can be used in similar ways just as though it were a credit card.<ref name="fcac"/> Unlike debit cards, prepaid credit cards generally do not require a PIN. An exception are prepaid credit cards with an [[EMV]] chip, which require a PIN if the payment is processed via [[Chip and PIN]] technology. As of 2018, most debit cards in the U.S. were prepaid cards (71.7%).<ref name=KK/>
After purchasing the card, the cardholder loads the account with any amount of money, up to the predetermined card limit and then uses the card to make purchases the same way as a typical credit card. The main advantage over secured credit cards (see above section) is that the cardholder is not required to supply the money required to open an account. With prepaid credit cards, purchasers are not charged any interest but are often charged a purchasing fee plus monthly fees after an arbitrary time period, together with many other fees.<ref name="fcac">{{cite web|url=http://www.fcac-acfc.gc.ca/eng/publications/CreditCardsYou/PrepaidCards_e.asp|archive-url=https://web.archive.org/web/20070307084013/http://www.fcac-acfc.gc.ca/eng/publications/CreditCardsYou/PrepaidCards_e.asp|archive-date=7 March 2007| title=Credit Cards and You – About Pre-paid Cards|publisher=[[Financial Consumer Agency of Canada]]| access-date=9 January 2008}} document: {{cite web|url=http://www.fcac-acfc.gc.ca/eng/publications/CreditCardsYou/PDFs/Prepaid-e.pdf|title=Pre-paid Cards| publisher=[[Financial Consumer Agency of Canada]]| access-date=9 January 2008|archive-url=https://web.archive.org/web/20080229122947/http://www.fcac-acfc.gc.ca/eng/publications/CreditCardsYou/PDFs/Prepaid-e.pdf <!-- Bot retrieved archive --> |archive-date = 29 February 2008}}</ref>
Prepaid credit cards are sometimes marketed to teenagers<ref name="fcac"/> for shopping online without having their parents complete the transaction.<ref>{{cite news|url=http://www.networkworld.com/community/?q=node%2F11433|title=Buy prepaid credit cards without an ID or age limits? What could go wrong?|magazine=[[NetworkWorld]].com Community |archive-url=https://web.archive.org/web/20070302185119/http://www.networkworld.com/community/?q=node%2F11433|archive-date=2 March 2007 }}</ref> Teenagers can only use funds that are available on the card which helps promote [[financial management]] to reduce the risk of [[debt]] problems later in life.<ref name=TeenResponPrepaid>{{cite news|newspaper=[[The New York Times]]|url=https://www.nytimes.com/2005/02/22/business/businessspecial/brothers-raised-on-cash-build-a-business-on-credit.html|title=Brothers Raised on Cash Build a Business on Credit|author=Jennifer Bayot|date=22 February 2005|access-date=30 August 2022|archive-date=31 August 2022|archive-url=https://web.archive.org/web/20220831060420/https://www.nytimes.com/2005/02/22/business/businessspecial/brothers-raised-on-cash-build-a-business-on-credit.html|url-status=live}}</ref>
Prepaid cards can be used globally. The prepaid card is convenient for payees in countries in which international wire transfers and bank checks are time-consuming, complicated and costly.{{citation needed|date=June 2012}}
Because many fees apply to obtaining and using credit-card-branded prepaid cards, the [[Financial Consumer Agency of Canada]] describes them as "an expensive way to spend your own money".<ref name=fcac2006>{{Citation
|author=<!-- staff --> |editor1=McDonald, Christina |editor2=Bélanger, Martine<!--Comms contacts--> |date=19 October 2006 |type=press release |publisher=[[Financial Consumer Agency of Canada]] |url=http://www.fcac-acfc.gc.ca/eng/media/pressrelease/posting-eng.asp?postingId=225 |title=FCAC Launches Pre-paid Payment Card Guide |access-date=17 March 2013 |archive-url=https://web.archive.org/web/20130612220546/http://www.fcac-acfc.gc.ca/eng/media/pressRelease/posting-eng.asp?postingId=225 |archive-date=12 June 2013 }}</ref> The agency publishes a booklet entitled ''Pre-paid Cards'' which explains the advantages and disadvantages of this type of prepaid card.
===Digital cards===
A [[digital card]] is a digital cloud-hosted virtual representation of any kind of identification card or payment card, such as a credit card.<ref name=SomeNotAllNYT>{{cite news
|newspaper=[[The New York Times]]
|url=https://www.nytimes.com/2021/12/01/technology/personaltech/covid-vaccination-card-phone.html
|title=How to Carry Your Covid Health Data on a Smartphone
|author=Brian X. Chen
|date=1 December 2021
|access-date=29 August 2022
|archive-date=12 October 2022
|archive-url=https://web.archive.org/web/20221012074047/https://www.nytimes.com/2021/12/01/technology/personaltech/covid-vaccination-card-phone.html
|url-status=live
}}</ref>
===Charge cards===
A [[charge card]] is a type of credit card.
==Benefits and drawbacks==
===Benefits to cardholder===
The main benefit to the cardholder is convenience. Compared to debit cards and checks, a credit card allows small short-term [[loans]] to be quickly made to a cardholder who need not calculate a balance remaining before every transaction, provided the total charges do not exceed the maximum credit line for the card. One financial benefit is that no interest is charged when the balance is paid in full within the [[grace period]]. In the United States, most credit cards offer a grace period (ex. 21, 23 or 25 days) on purchase transactions. Different countries offer different levels of protection. In the U.K., for example, the bank is jointly liable with the merchant for purchases of defective products over £100.<ref>{{Cite web |title=FAQs - UK Cards Association |url=http://www.theukcardsassociation.org.uk/faqs/index.asp |archive-url=https://web.archive.org/web/20120712031416/http://www.theukcardsassociation.org.uk/faqs/index.asp |archive-date=2012-07-12 |access-date=2025-07-01 |website=www.theukcardsassociation.org.uk}}</ref> Many credit cards offer benefits to cardholders. Some benefits apply to products purchased with the card, like extended product warranties, reimbursement for decreases in price immediately after purchase (price protection), and reimbursement for theft or damage on recently purchased products (purchase protection).<ref>{{cite news |last1=Cothern |first1=Lance |date=26 June 2019 |title=Vay tiền mặt MAFC |url=https://mafc.com.vn/ |access-date=16 May 2021 |work=U.S. News & World Report}}</ref> Other benefits include various types of travel insurance, such as rental car insurance, travel accident insurance, baggage delay insurance, and trip delay or cancellation insurance.<ref>{{Cite news |last=White |first=Alexandria |date=2020-02-07 |title=How does credit card travel insurance work? |url=https://www.cnbc.com/select/how-does-credit-card-travel-insurance-work/ |archive-url=https://web.archive.org/web/20210514165151/https://www.cnbc.com/select/how-does-credit-card-travel-insurance-work/ |archive-date=2021-05-14 |access-date=2025-07-01 |work=CNBC |language=en}}</ref>
Credit cards may also offer a [[loyalty program]], where each purchase is rewarded based on the price of the purchase. Typically, rewards are either in the form of cashback or points. Points are often redeemable for gift cards, products, or travel expenses like airline tickets. Some credit cards allow the transfer of accrued points to hotel and airline loyalty programs.<ref>{{cite web |last1=White |first1=Alexandria |title=The 3 kinds of credit card rewards programs and how they work |url=https://www.cnbc.com/select/how-credit-card-rewards-programs-work/|website=CNBC |publisher=NBC Universal |access-date=16 May 2021 |language=en |date=2 December 2020 |archive-date=17 May 2021 |archive-url=https://web.archive.org/web/20210517001855/https://www.cnbc.com/select/how-credit-card-rewards-programs-work/|url-status=live }}</ref> Research has examined whether competition among card networks may potentially make payment rewards too generous, causing higher prices among merchants, thus actually impacting social welfare and its distribution, a situation potentially warranting public policy interventions.<ref>{{Cite web |url=https://www.kansascityfed.org/documents/711/pdf-RWP08-07.pdf |title=Federal Reserve Bank of Kansas City, ''The Economics of Payment Card Fee Structure: What Drives Payment Card Rewards?'', March 2009 |access-date=17 May 2021 |archive-date=17 May 2021 |archive-url=https://web.archive.org/web/20210517164058/https://kansascityfed.org/documents/711/pdf-RWP08-07.pdf |url-status=live }}</ref>
Some countries, such as the [[United States]], the [[United Kingdom]], and [[France]], limit the amount for which a consumer can be held [[Legal liability|liable]] in the event of fraudulent transactions with a lost or stolen credit card.
====Comparison of credit card benefits in the U.S.====
The table below contains a list of benefits offered in the [[United States]] for [[consumer]] credit cards in some of these networks. These benefits may vary with each credit card issuer.
{| class="wikitable"
|-
! !! MasterCard<ref>{{cite web|url=http://www.mastercard.us/card-benefits/|title=Credit Card protection, assistance and savings|publisher=MasterCard|access-date=13 August 2013|archive-date=2 September 2013|archive-url=https://web.archive.org/web/20130902055512/http://www.mastercard.us/card-benefits/|url-status=live}}</ref>!! Visa<ref>{{cite web|title=Card Benefits |url=http://usa.visa.com/personal/cards/benefits/index.html|publisher=Visa|archive-url=https://web.archive.org/web/20130818044705/http://usa.visa.com/personal/cards/benefits/index.html |archive-date=18 August 2013}}</ref>!! American Express<ref>{{cite web|url=http://www.americanexpress.com/us/content/card-benefits.html|title=Retail, Entertainment and Travel Protection Benefit Guides|access-date=13 August 2013|archive-date=1 August 2013|archive-url=https://web.archive.org/web/20130801215735/http://www.americanexpress.com/us/content/card-benefits.html|url-status=live}}</ref>!! Discover<ref>{{cite web |url=https://www.discover.com/credit-cards/resources/credit-card-benefits.shtml|title=Exploring Credit Card Benefits|publisher=Discoverer|url-status=live|archive-url=https://web.archive.org/web/20130213125427/https://www.discover.com/credit-cards/resources/credit-card-benefits.shtml|archive-date=13 February 2013}}</ref>
|-
| {{rh}} | Return extension || style="text-align: center;" | 60 days<br />''up to $250'' || style="text-align: center;" | 90 days<br />''up to $250''<ref>{{cite web|title=Return Protection {{!}} Personal {{!}} Visa USA|url=http://usa.visa.com/personal/cards/benefits/bft_return_protection.html|archive-url=https://web.archive.org/web/20130826152341/http://usa.visa.com/personal/cards/benefits/bft_return_protection.html|archive-date=26 August 2013|access-date=28 August 2013}}</ref>|| style="text-align: center;" | 90 days<br />''up to $300''<ref>{{Cite web |title=Shopping Protection {{!}} American Express US |url=https://www.americanexpress.com/us/security-center/shopping-protection/ |access-date=2024-10-30 |website=www.americanexpress.com |archive-date=26 November 2024 |archive-url=https://web.archive.org/web/20241126193741/https://www.americanexpress.com/us/security-center/shopping-protection/ |url-status=live }}</ref>|| rowspan="5" style="text-align: center;" | Not Available<ref>{{Cite web|url=https://www.discover.com/credit-cards/help-center/faqs/return-guarantee.html|title=What is Return Guarantee? {{!}} Discover|website=www.discover.com|access-date=17 January 2019|archive-date=17 January 2019|archive-url=https://web.archive.org/web/20190117174140/https://www.discover.com/credit-cards/help-center/faqs/return-guarantee.html|url-status=live}}</ref>
|-
| {{rh}} | Extended warranty || style="text-align: center;" | 2× original<br />''up to 1 year'' || style="text-align: center;" | Depends || style="text-align: center;" | 1 additional year<br />''6 years max''
|-
| {{rh}} | Price protection || style="text-align: center;" | 60 days || style="text-align: center;" | Varies || {{Na}}
|-
| {{rh}} | Loss/damage coverage || style="text-align: center;" | 90 days || style="text-align: center;" | Depends || style="text-align: center;" | 90 days<br />''up to $1,000''
|-
| {{rh}} | Rental car insurance {{Main|Damage waiver#Credit card coverage of damage waiver|l1=Damage waiver}}|| 15 days: collision, theft, vandalism||15 days: collision, theft || 30 days: collision, theft, vandalism<ref>{{cite web|title=Car Rental Loss Damage Insurance - American Express|url=https://www.americanexpress.com/us/content/card-benefits/car-rental-insurance.html|access-date=28 August 2013|archive-date=7 August 2013|archive-url=https://web.archive.org/web/20130807000110/http://www.americanexpress.com/us/content/card-benefits/car-rental-insurance.html?|url-status=live}}</ref>
|}
===Detriments to cardholders===
==== High interest and bankruptcy ====
Low introductory credit card rates are limited to a fixed term, usually between 6 and 12 months, after which a higher rate is charged. As all credit cards charge fees and interest, some customers become so indebted to their credit card provider that they are driven to [[bankruptcy]]. Some credit cards often levy a rate of 20 to 30 percent after a payment is missed.<ref>{{cite web |author=CreditCards.com |url=http://www.creditcards.com/credit-card-news/default-penalty-rates-what-they-are-how-to-avoid-1276.php |title=Credit card penalty rates can top 30 percent; how to avoid them |publisher=Creditcards.com |date=27 January 2010 |access-date=26 March 2013 |archive-date=20 December 2012 |archive-url=https://web.archive.org/web/20121220044326/http://www.creditcards.com/credit-card-news/default-penalty-rates-what-they-are-how-to-avoid-1276.php }}</ref> In other cases, a fixed charge is levied without change to the interest rate. In some cases [[universal default]] may apply: the high default rate is applied to a card in good standing by missing a payment on an unrelated account from the same provider. This can lead to a snowball effect in which the consumer is drowned by unexpectedly high-interest rates. Further, most card holder agreements enable the issuer to arbitrarily raise the interest rate for any reason they see fit. [[First Premier Bank]] at one point offered a credit card with a 79.9% interest rate;<ref>{{cite web|last=Prater |first=Connie |url=https://www.foxbusiness.com/features/issuer-of-79-9-interest-rate-credit-card-defends-its-product |title=Issuer of 79.9% interest rate credit card defends its product |publisher=FoxBusiness.com |date=7 April 2010 |access-date=28 July 2011}}</ref> however, they discontinued this card in February 2011 because of persistent defaults.<ref>{{cite web|last = Ellis|first = Blake|url = https://money.cnn.com/2011/02/16/pf/first_premier_credit_card_removed/|title = First Premier Bank removes credit card with 59.9% APR|publisher = CNN|date = 17 February 2011|access-date = 1 October 2015|archive-date = 3 October 2015|archive-url = https://web.archive.org/web/20151003120848/http://money.cnn.com/2011/02/16/pf/first_premier_credit_card_removed/|url-status = live}}</ref>
Research shows that a substantial fraction of consumers (about 40 percent) choose a sub-optimal credit card agreement, with some incurring hundreds of dollars of avoidable interest costs.<ref>{{Cite web |url=http://www.chicagofed.org/digital_assets/publications/working_papers/2006/wp2006_11.pdf |title=Federal Reserve Bank of Chicago, ''Do Consumers Choose the Right Credit Contracts?'', October 2006 |access-date=18 January 2013 |archive-date=21 October 2012 |archive-url=https://web.archive.org/web/20121021132028/https://www.chicagofed.org/digital_assets/publications/working_papers/2006/wp2006_11.pdf |url-status=live }}</ref>
==== Unnecessary risk ====
Credit card ownership brings additional [[Risk aversion|risks]] with it (compared to other cashless payment alternatives) such as an increased risk of fraud,<ref>{{cite report |url=https://www.ecb.europa.eu/pub/pdf/cardfraud/ecb.cardfraudreport202110~cac4c418e8.en.pdf |title=Seventh report on card fraud |publisher=European Central Bank |date=October 2021 |access-date=11 August 2023 |pages=3, 11 |archive-date=3 November 2023 |archive-url=https://web.archive.org/web/20231103054618/https://www.ecb.europa.eu/pub/pdf/cardfraud/ecb.cardfraudreport202110~cac4c418e8.en.pdf |url-status=live }}</ref> or taking on unnecessary [[Liability (financial accounting)|liability]].
====Weakens self regulation====
Several studies have shown that consumers are likely to spend more money when they pay by credit card. Researchers suggest that when people pay using credit cards, they do not experience the abstract pain of payment.<ref>{{cite web |author1=Drazen Prelec |author1-link=Drazen Prelec |author2=George Loewenstein |author2-link=George Loewenstein |name-list-style=amp |url=https://www.cmu.edu/dietrich/sds/docs/loewenstein/redblack.pdf |title=The Red and the Black: Mental Accounting of Savings and Debt |publisher=Carnegie Mellon University, Department of Social and Decision Sciences |date=21 December 1998 |access-date=21 June 2023 |archive-date=21 June 2023 |archive-url=https://web.archive.org/web/20230621223557/https://www.cmu.edu/dietrich/sds/docs/loewenstein/redblack.pdf |url-status=live }}</ref> Furthermore, researchers have found that using credit cards can increase consumption of unhealthy food, compared to using cash.<ref>{{cite magazine | url=https://business.time.com/2011/07/07/finally-money-advice-that-will-make-you-skinnier/ | title=Finally, Money Advice That Will Make You Skinnier | magazine=Time | date=7 July 2011 | access-date=17 November 2024 | archive-date=17 September 2024 | archive-url=https://web.archive.org/web/20240917180056/https://business.time.com/2011/07/07/finally-money-advice-that-will-make-you-skinnier/ | url-status=live }}</ref>
===Detriments to society===
====Inflated pricing for all consumers====
Merchants that accept credit cards must pay [[interchange fees]] and discount fees on all credit card transactions.<ref name=how>{{cite news |title=How Visa, Using Card Fees, Dominates a Market |url=https://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html?em=&pagewanted=all |quote=The fees, roughly 1 to 3 percent of each purchase, are forwarded to the cardholder's bank to cover costs and promote the issuance of more Visa cards. |work=[[The New York Times]] |date=4 January 2010 |access-date=6 January 2010 |first=Andrew |last=Martin |archive-date=23 March 2019 |archive-url=https://web.archive.org/web/20190323060006/https://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html?em=&pagewanted=all |url-status=live }}</ref><ref name="money.cnn.com">{{cite news | url=https://money.cnn.com/2008/07/28/news/credit_card_interchange/ | work=CNN | title=Hidden credit card fees are costing you | date=31 July 2008 | access-date=30 April 2010 | first=Jessica | last=Dickler | archive-date=5 April 2010 | archive-url=https://web.archive.org/web/20100405215723/http://money.cnn.com/2008/07/28/news/credit_card_interchange/ | url-status=live }}</ref> In some cases merchants are barred by their credit agreements from passing these fees directly to credit card customers, or from setting a minimum transaction amount.<ref>{{cite web|last=Carr |first=Ted |url=http://blog.visa.com/2010/09/02/minimizing-confusion-over-minimums/ |title=Minimizing Confusion Over Minimums |publisher=Blog.visa.com |date=2 September 2010 |access-date=28 July 2011 |archive-url=https://web.archive.org/web/20110723235456/http://blog.visa.com/2010/09/02/minimizing-confusion-over-minimums/ |archive-date=23 July 2011 }}</ref> The result is that merchants are induced to charge all customers (including those who do not use credit cards) higher prices to cover the fees on credit card transactions.<ref name="money.cnn.com"/> The inducement can be strong because the merchant's fee is a percentage of the sale price, which has a disproportionate effect on the profitability of businesses that have predominantly credit card transactions unless compensated for by raising prices generally. In the United States in 2008 credit card companies collected a total of $48 billion in interchange fees, or an average of $427 per family, with an average fee rate of about 2% per transaction.<ref name="money.cnn.com"/>
Credit card rewards result in a total transfer of $1,282 from the average cash payer to the average card payer per year.<ref>{{cite web|url=https://www.bostonfed.org/publications/public-policy-discussion-paper/2010/who-gains-and-who-loses-from-credit-card-payments-theory-and-calibrations.aspx|title=Who Gains and Who Loses from Credit Card Payments? Theory and Calibrations|first=Federal Reserve Bank of|last=Boston|date=9 November 2012|website=Federal Reserve Bank of Boston|access-date=3 December 2018|archive-date=3 December 2018|archive-url=https://web.archive.org/web/20181203055655/https://www.bostonfed.org/publications/public-policy-discussion-paper/2010/who-gains-and-who-loses-from-credit-card-payments-theory-and-calibrations.aspx|url-status=live}}</ref>
===Benefits to merchants===
[[File:WeTakeCreditDebitCardsCrop.jpg|thumb|right|An example of street markets accepting credit cards. Most simply display the [[acceptance mark]]s (stylized logos, shown in the upper-left corner of the sign) of all the cards they accept.]]
For [[merchants]], card-based purchase amounts reduce resistance compared to paying cash,<ref name=CostcoBenNYT>{{cite news|newspaper=[[The New York Times]]|url=https://www.nytimes.com/wirecutter/money/co-branded-costco|title=I Have a Costco Credit Card. I Never Use It at Costco. Here's Why.|author=Sally French|date=1 May 2020|access-date=30 August 2022|archive-date=30 August 2022|archive-url=https://web.archive.org/web/20220830183038/https://www.nytimes.com/wirecutter/money/co-branded-costco/|url-status=live}}</ref> and the transaction is often more secure than other forms of payment, such as [[Cheque|check]]s, because the issuing bank commits to pay the merchant the moment the transaction is authorized, regardless of whether the consumer defaults on the credit card payment (except for legitimate disputes, which can result in charges back to the merchant). Cards are even more secure than cash because they reduce theft opportunities by reducing the amount of cash on the premises. Finally, credit cards reduce the back office expense of processing checks/cash and transporting them to the bank.
Prior to credit cards, each merchant had to evaluate each customer's [[credit history]] before extending credit. That task is now performed by the banks which assume the [[credit risk]]. Extra turnover is generated by the fact that the customer can purchase goods and services immediately without being inhibited by the amount of cash in his pocket or the immediate state of his bank balance. Much of merchants' marketing is based on this immediacy. For each purchase, the bank charges the merchant a service commission (discount fee), and there may be a certain delay before the agreed payment is received by the merchant. The commission is often a percentage of the transaction amount, plus a fixed fee (interchange rate).<ref name=BadAdvanceNYT/>
===Costs to merchants===
Merchants are charged several fees for accepting credit cards. The merchant is usually charged a [[commission (remuneration)|commission]] of around 0.5 to 4 percent of the value of each transaction paid for by credit card.<ref name=gensler2013>{{Citation|last=Gensler |first=Lauren |date=April 2013 |title=You (Probably) Won't Pay More to Swipe |magazine=[[Money (magazine)|Money]] |___location=New York |page=14}}</ref> The merchant may also pay a variable charge, called a merchant discount rate, for each transaction.<ref name=how/> In some instances of very low-value transactions, use of credit cards will significantly reduce the [[profit margin]] or cause the merchant to lose money on the transaction. Merchants with very low average transaction prices or very high average transaction prices are more averse to accepting credit cards. In some cases, merchants may charge users a "credit card supplement" (or surcharge), either a fixed amount or a percentage, for payment by credit card.<ref>{{cite web|url=http://www.bmibaby.com/bmibaby/terms_and_conditions/our_top_booking_tips,_baby/fees_and_charges.aspx |title=Example of a supplement chargeable to the customer when paying by credit card |publisher=Bmibaby.com |date=5 January 2011 |access-date=28 July 2011 |archive-url=https://web.archive.org/web/20110708074413/http://www.bmibaby.com/bmibaby/terms_and_conditions/our_top_booking_tips%2C_baby/fees_and_charges.aspx |archive-date=8 July 2011 }}</ref> This practice was prohibited by most credit card contracts in the United States until 2013 when a major settlement between merchants and credit card companies allowed merchants to levy surcharges. Most retailers have not started using credit card surcharges, however, for fear of losing customers.<ref name=washpost>{{cite news|last1=Douglas|first1=Danielle|title=Judge approves Visa, MasterCard $5.7 billion settlement with retailers|url=https://www.washingtonpost.com/business/economy/us-judge-approves-visa-mastercard-57-billion-credit-card-settlement-with-retailers/2013/12/13/bd42b88c-643a-11e3-aa81-e1dab1360323_story.html|newspaper=Washington Post|archive-date=23 January 2016|access-date=11 January 2016|archive-url=https://web.archive.org/web/20160123210318/https://www.washingtonpost.com/business/economy/us-judge-approves-visa-mastercard-57-billion-credit-card-settlement-with-retailers/2013/12/13/bd42b88c-643a-11e3-aa81-e1dab1360323_story.html|url-status=live}}</ref>
Merchants in the United States have been fighting what they consider to be unfairly high fees charged by credit card companies in a series of lawsuits that started in 2005. Merchants charged that the two main credit card processing companies, MasterCard and Visa, used their [[monopoly power]] to levy excessive fees in a class-action lawsuit involving the [[National Retail Federation]] and major retailers such as [[Wal-Mart]]. In December 2013, a federal judge approved a $5.7 billion [[Settlement (litigation)|settlement]] in the case that offered payouts to merchants who had paid credit card fees, the largest antitrust settlement in U.S. history. Some large retailers, such as Wal-Mart and [[Amazon.com|Amazon]], chose to not participate in this settlement, however, and have continued their legal fight against the credit card companies.<ref name=washpost />
In April 2015 the EU imposed a cap on the interchange fee to 0.3% on consumer credit cards, and 0.2% on debit cards.<ref name=eu-conuncil>{{cite news|title=Capping fees for card-based payments: Regulation adopted|url=https://www.consilium.europa.eu/en/press/press-releases/2015/04/20/capping-fees-card-based-payments/|newspaper=EU Council|archive-date=11 February 2023|access-date=15 December 2022|archive-url=https://web.archive.org/web/20230211051249/https://www.consilium.europa.eu/en/press/press-releases/2015/04/20/capping-fees-card-based-payments/|url-status=live}}</ref>
Merchants must also lease or purchase processing equipment, although some [[payment processor|processors]] provide this equipment free of charge. Merchants must also satisfy data security compliance standards which are highly technical and complicated. In many cases, there is a delay of several days before funds are deposited into a merchant's bank account. Because credit card fee structures are very complicated, smaller merchants are at a disadvantage to analyze and predict fees.
Finally, merchants assume the risk of [[chargebacks]] by consumers.
==Security==
{{Main|Credit card fraud}}
{{See also|Wireless identity theft|RFID}}
Credit card security relies on the physical security of the [[plastic card]] as well as the privacy of the credit card number. Therefore, whenever a person other than the card owner has access to the card or its number, security is potentially compromised. Once, merchants would often accept credit card numbers without additional verification for mail order purchases. It is now common practice to only ship to confirmed addresses as a security measure to minimize fraudulent purchases. Some merchants will accept a credit card number for in-store purchases, whereupon access to the number allows easy fraud, but many require the card itself to be present and require a signature (for magnetic stripe cards). A lost or stolen card can be cancelled, and if this is done quickly, will greatly limit the fraud that can take place in this way. European banks can require a cardholder's security PIN be entered for in-person purchases with the card.
The [[Payment Card Industry Data Security Standard]] (PCI DSS) is the security standard issued by the [[Payment Card Industry Security Standards Council]] (PCI SSC). This data security standard is used by acquiring banks to impose cardholder data security measures upon their merchants.
The goal of the credit card companies is not to eliminate fraud, but to "reduce it to manageable levels".<ref>{{cite web |publisher=Thrive Business Solutions |url=http://www.thrivesolution.com/index.php?option=com_content&task=view&id=28&Itemid=33 |title=PCI Compliance |archive-url=https://web.archive.org/web/20080305093414/http://www.thrivesolution.com/index.php?option=com_content&task=view&id=28&Itemid=33 |archive-date=5 March 2008}}</ref> This implies that fraud prevention measures will be used only if their cost is lower than the potential gains from fraud reduction, whereas high-cost low-return measures will not be used – as would be expected from organizations whose goal is [[profit maximization]].
[[Internet fraud]] may be committed by claiming a [[chargeback]] which is not justified ("[[friendly fraud]]"), or carried out by the use of credit card information which can be stolen in many ways, the simplest being copying information from retailers, either [[online]] or [[Off-line|offline]]. Despite efforts to improve security for remote purchases using credit cards, security breaches are usually the result of poor practice by merchants. For example, a website that safely uses [[Transport Layer Security|TLS]] to encrypt card data from a client may then email the data, unencrypted, from the webserver to the merchant; or the merchant may store unencrypted details in a way that allows them to be accessed over the Internet or by a rogue employee; unencrypted card details are always a security risk. Even encrypted data may be cracked.
[[Controlled payment number]]s (also known as virtual credit cards or disposable credit cards) are another option for protecting against credit card fraud where the presentation of a physical card is not required, as in telephone and online purchasing. These are one-time use numbers that function as a payment card and are linked to the user's real account, but do not reveal details, and cannot be used for subsequent unauthorized transactions. They can be valid for a relatively short time, and limited to the actual amount of the purchase or a limit set by the user. Their use can be limited to one merchant. If the number given to the merchant is compromised, it will be rejected if an attempt is made to use it a second time.
A similar system of controls can be used on physical cards. Banks can adjust many controls on individual cards as needed; for example, a card can be subjected to temporal, numerical, and geographical usage restrictions. From a security perspective, this means that a customer can have a chip and PIN card secured for the real world, and limited for use in the home country. Should the card details be compromised, the thief will be prevented from using them overseas in non-chip and pin [[EMV]] countries. Similarly, the real card can be restricted from use online so that stolen details will be declined if this is tried. Then when card users shop online they can use virtual account numbers. In both circumstances, an alert system can be built in notifying a user that a fraudulent attempt has been made which breaches their parameters, and can provide data on this in real-time.
Additionally, the physical card includes security features to prevent [[counterfeiting]]. For example, most modern credit cards have a [[watermark]] that will fluoresce under [[ultraviolet light]].<ref>{{cite news |title=Counterfeit Detection |url=https://www.fraudfighter.com/hs-fs/hub/76574/file-1552643545-pdf |access-date=28 January 2020 |archive-date=28 January 2020 |archive-url=https://web.archive.org/web/20200128203759/https://www.fraudfighter.com/hs-fs/hub/76574/file-1552643545-pdf |url-status=live }}</ref> Most major credit cards have a [[hologram]]. A Visa card has a letter V superimposed over the regular Visa logo and a MasterCard has the letters MC across the front of the card. Older Visa cards have a bald eagle or dove across the front while older MasterCard cards have two circles ([[Venn diagram]]) with continents on it. In the aforementioned cases, the security features are only visible under ultraviolet light and are invisible in normal light.
In the United States, the [[United States Department of Justice|Department of Justice]], [[United States Secret Service|Secret Service]], [[Federal Bureau of Investigation]], [[U.S. Immigration and Customs Enforcement|Immigration and Customs Enforcement]], and [[U.S. Postal Inspection Service|Postal Inspection Service]] are responsible for prosecuting criminals who engage in [[credit card fraud]].<ref>{{cite news |title=Identity Theft and Identity Fraud |url=https://www.justice.gov/criminal-fraud/identity-theft/identity-theft-and-identity-fraud |access-date=28 January 2020 |archive-date=22 June 2015 |archive-url=https://web.archive.org/web/20150622005842/http://www.justice.gov/criminal/fraud/websites/idtheft.html |url-status=live }}</ref> However, they do not have the resources to pursue all criminals, and in general they only prosecute cases exceeding $5,000.
Three improvements to card security have been introduced to the more common credit card networks, but none has proven to help reduce credit card fraud so far. First, the cards themselves are being replaced with similar-looking tamper-resistant [[smart card]]s which are intended to make [[forgery]] more difficult. The majority of smart card (IC card) based credit cards comply with the [[EMV]] (Europay MasterCard Visa) standard. Second, an additional 3 or 4 digit [[card security code]] (CSC) or card verification value (CVV) is now present on the back of most cards, for use in [[card not present transaction]]s. Stakeholders at all levels in electronic payment have recognized the need to develop consistent global standards for security that account for and integrate both current and emerging security technologies. They have begun to address these needs through organisations such as PCI DSS and the [[Secure POS Vendor Alliance]].<ref>{{Cite web |title=Secure POS Vendor Alliance is launched by Hypercom, Ingenico and VeriFone |work=ECommerce Journal |year=2009 |url=http://www.ecommerce-journal.com/news/14854_secure_pos_vendor_alliance_is_launched_by_hypercom_ingenico_and_verifone |archive-date=26 April 2009 |archive-url=https://web.archive.org/web/20090426033905/http://www.ecommerce-journal.com/news/14854_secure_pos_vendor_alliance_is_launched_by_hypercom_ingenico_and_verifone}}</ref>
===Code 10===
Code 10 calls are made when merchants are suspicious about accepting a credit card.
The operator then asks the merchant a series of yes-or-no questions to ascertain whether the merchant is suspicious of the card or the cardholder. The merchant may be asked to retain the card if safely possible. The merchant may receive a reward for returning a confiscated card to the issuing bank, especially if an arrest is made.<ref>{{cite web|url=http://usa.visa.com/merchants/risk_management/code.html |title=Code 10 |access-date=28 November 2012 |publisher=[[Visa Inc.]] |archive-date=2012-11-15|archive-url=https://web.archive.org/web/20121115112909/http://usa.visa.com/merchants/risk_management/code.html}}</ref><ref>{{cite web|title=MasterCard Card Identification Features|publisher=[[MasterCard]]|url=http://www.mastercard.com/uk/merchant/en/security/datasecurityrules/card_id_sec_features.html|access-date=28 November 2012|archive-date=24 December 2011|archive-url=https://web.archive.org/web/20111224150750/http://www.mastercard.com/uk/merchant/en/security/datasecurityrules/card_id_sec_features.html}}</ref><ref>{{cite web |title=CARD_ID_FEATURES_MERCHANT.PDF|publisher=[[Discover Card]]|url=http://www.discovernetwork.com/common/pdf/CARD_ID_FEATURES_MERCHANT.pdf|url-status=live|archive-url=https://web.archive.org/web/20080513202211/http://www.discovernetwork.com/common/pdf/CARD_ID_FEATURES_MERCHANT.pdf|archive-date=13 May 2008|access-date=28 November 2012}}</ref><ref>{{cite web|url=https://www.americanexpress.com/content/dam/amex/ca/en/merchant/pdfs/final-fraud-prevention-quick-guide%20-en.pdf|title=American Express Fraud Prevention Handbook|website=American Express|access-date=11 November 2014|archive-date=28 July 2020|archive-url=https://web.archive.org/web/20200728235956/https://www.americanexpress.com/content/dam/amex/ca/en/merchant/pdfs/final-fraud-prevention-quick-guide%20-en.pdf|url-status=live}}</ref>
==Costs and revenues of credit card issuers==
===Costs===
* Charge offs: When a cardholder becomes severely delinquent on a debt,<ref>often at the point of six months without payment</ref> the creditor may declare the debt to be a [[charge-off]]. It will then be listed as such on the debtor's credit bureau reports. ([[Equifax]], for instance, lists "R9" in the "status" column to denote a charge-off.) A charge-off is considered to be "written off as uncollectible". To banks, bad debts and fraud are part of the cost of doing business.
*:However, the debt is still legally valid, and the creditor can attempt to collect the full amount for the time periods permitted under law. This includes contacts from internal collections staff, or more likely, an outside [[collection agency]]. If the amount is sufficiently large, there is the possibility of a lawsuit or [[arbitration]].
* Fraud: In relative numbers the values lost in [[Credit card fraud|bank card fraud]] are minor, calculated in 2006 at 7 cents per 100 dollars worth of transactions (7 [[basis point]]s).<ref>{{Cite web |url=http://issaasad.org/wp-content/uploads/2014/10/mercator-fraud-1208.pdf |title=Credit Card Issuer Fraud Management, Report Highlights, December 2008 |access-date=21 October 2014 |archive-date=21 October 2014 |archive-url=https://web.archive.org/web/20141021225257/https://issaasad.org/wp-content/uploads/2014/10/mercator-fraud-1208.pdf |url-status=live }}</ref> In 2004, in the U.K., the cost of fraud was over £500 million.<ref>{{cite web |url=http://www.cardwatch.org.uk/media.asp?sectionid=4&pageid=109 |title=Plastic fraud loss on UK-issued cards 2004/2005 |archive-url=https://web.archive.org/web/20060616211917/http://www.cardwatch.org.uk/media.asp?sectionid=4&pageid=109 |archive-date=16 June 2006 |website=Cardwatch.org.uk |access-date=7 July 2006}}</ref> When a card is stolen, or an unauthorized duplicate made, most card issuers will refund some or all of the charges that the customer has received for things they did not buy. These refunds will, in some cases, be at the expense of the merchant, especially in mail order cases where the merchant cannot claim sight of the card. In several countries, merchants will lose money if no ID card was asked for, therefore merchants usually require ID cards in these countries. Credit card companies generally guarantee the merchant will be paid on legitimate transactions regardless of whether the consumer pays his credit card bill.
*:Most banking services have their own credit card services that handle fraud cases and monitor for any possible attempt at fraud. Employees that are specialized in doing fraud monitoring and investigation are often placed in Risk Management, Fraud and Authorization, or Cards and Unsecured Business. Fraud monitoring emphasizes minimizing fraud losses while making an attempt to track down those responsible and contain the situation. Credit card fraud is a major white-collar crime that has been around for many decades, even with the advent of the chip-based card (EMV) that was put into practice in some countries to prevent cases such as these. Even with the implementation of such measures, credit card fraud continues to be a problem.
* Interest expenses: Banks generally borrow the money they then lend to their customers. As they receive very low-interest loans from other firms, they may borrow as much as their customers require, while lending their capital to other borrowers at higher rates. If the card issuer charges 15% on money lent to users, and it costs 5% to borrow the money to lend, and the balance sits with the cardholder for a year, the issuer earns 10% on the loan. This 10% difference is the "net interest spread" and the 5% is the "interest expense".
* Operating costs: This is the [[operating cost|cost of running]] the credit card portfolio, including everything from paying the executives who run the company to printing the plastics, to mailing the statements, to running the computers that keep track of every cardholder's balance, to taking the many phone calls which cardholders place to their issuer, to protecting the customers from fraud rings. Depending on the issuer, marketing programs are also a significant portion of expenses.
* Rewards (programs) There is a [[#Cashback reward programs|cost to the issuer for these programs]]
===Revenues===
====Interchange fee====
{{Main|Interchange fee}}
In addition to fees paid by the card holder, merchants must also pay [[interchange fee]]s to the card-issuing bank and the card association.<ref name="S-1">[https://www.sec.gov/Archives/edgar/data/1403161/000119312507242653/ds1.htm United States Securities and Exchange Commission FORM S-1] {{Webarchive|url=https://web.archive.org/web/20210419220437/http://www.sec.gov/Archives/edgar/data/1403161/000119312507242653/ds1.htm |date=19 April 2021 }}, 9 November 2007.</ref><ref name="Tampa Tribune">[http://www2.tbo.com/content/2008/feb/15/bz-debit-cards-cash-in-on-rewards-riches/ Debit Cards Cash In On Rewards Riches] ''Tampa Tribune'', 15 February 2008. {{webarchive |url=https://web.archive.org/web/20080228043408/http://www2.tbo.com/content/2008/feb/15/bz-debit-cards-cash-in-on-rewards-riches/ |date=28 February 2008 }}</ref> For a typical credit card issuer, interchange fee revenues may represent about a quarter of total revenues.<ref name="FRB"/>
These fees are typically from 1 to 6 percent of each sale but will vary not only from merchant to merchant (large merchants can negotiate lower rates<ref name="FRB">[https://www.minneapolisfed.org/pubs/region/06-06/interchange.cfm The Interchange Debate: Issues and Economics] James Lyon, 19 January 2006 {{webarchive |url=https://web.archive.org/web/20080322001627/https://www.minneapolisfed.org/pubs/region/06-06/interchange.cfm |date=22 March 2008 }}</ref>), but also from card to card, with business cards and rewards cards generally costing the merchants more to process. The interchange fee that applies to a particular transaction is also affected by many other variables including the type of merchant, the merchant's total card sales volume, the merchant's average transaction amount, whether the cards were physically present, how the information required for the transaction was received, the specific type of card, when the transaction was settled, and the authorized and settled transaction amounts. In some cases, merchants add a surcharge to the credit cards to cover the interchange fee, encouraging their customers to instead use [[cash]], [[debit card]]s, or even [[cheque]]s.
The 2022-proposed change in Interchange fees, by encouraging use of multiple card networks was criticized as likely to reduce fraud detection.<ref>{{cite news |magazine=[[Computerworld]]
|url=https://www.computerworld.com/article/3671128/as-feds-eye-fixes-for-credit-card-interchanges-are-they-making-fraud-easier.html
|title=Planned 'fixes' for credit-card interchange fees will actually make fraud easier
|author=Evan Schuman |date=26 August 2022 |access-date=31 August 2022}}</ref>
====Interest on outstanding balances====
[[Credit card interest|Interest]] charges vary widely between card issuers. Often, there are "teaser" rates or promotional APR in effect for initial periods of time (as low as zero percent for, say, six months), whereas regular rates can be as high as 40 percent.<ref>{{cite book|last=Garman|first=E. Thomas|title=Personal Finance|date=12 October 2007|url=https://books.google.com/books?id=4lmDIw_4kpkC&q=%22introductory+rate%22&pg=PA188|publisher=Houghton Mifflin Company|page=188|isbn=978-0-618-93873-5}}</ref> In the U.S. there is no federal limit on the interest or late fees credit card issuers can charge; the interest rates are set by the states, with some states such as [[South Dakota]], having no ceiling on interest rates and fees, inviting some banks to establish their credit card operations there. Other states, for example [[Delaware]], have very weak [[usury|usury laws]]. The [[teaser rate]] no longer applies if the customer does not pay their bills on time, and is replaced by a penalty interest rate (for example, 23.99%) that applies retroactively.
===Transactors and revolvors===
Credit card analysts tag some accounts on a transactor (pays in full) or revolvor continuum. The issuer needs both types of cardholders; some pay interest, others primarily cause merchants to pay fees.
====Revolving account====
A '''revolving account''' is an account created by a [[financial institution]] to enable a customer to incur a [[debt]], which is charged to the account, and in which the borrower does not have to pay the outstanding balance on that account in full every month. The borrower may be required to make a minimum payment, based on the balance amount. However, the borrower normally has the discretion to pay the lender any amount between the minimum payment and the full balance. If the balance is not paid in full by the end of a monthly billing period, the remaining balance will roll over or "revolve" into the next month. Interest will be charged on that amount and added to the balance.
A revolving account is a form of a [[line of credit]], typically subject to a [[credit limit]]; not all credit cards have a credit limit.<ref>{{cite news
|newspaper=[[The New York Times]]
|url=https://archive.nytimes.com/bucks.blogs.nytimes.com/2010/12/01/be-wary-of-credit-cards-with-no-spending-limits
|title=Be Wary of Credit Cards With No Spending Limits
|author=Jennifer Saranow Schultz
|date=1 December 2010
|access-date=5 September 2022
|archive-date=6 September 2022
|archive-url=https://web.archive.org/web/20220906005515/https://archive.nytimes.com/bucks.blogs.nytimes.com/2010/12/01/be-wary-of-credit-cards-with-no-spending-limits/
|url-status=live
}}</ref> The term can also refer to a for-emergencies savings fund.<ref>{{cite news
|newspaper=[[The New York Times]]
|url=https://www.nytimes.com/1989/05/07/weekinreview/ideas-trends-the-elk-are-back-aided-by-the-hunter-population.html
|quote=is raising money to buy land .. The money went into a revolving account that allows the foundation to act quickly
|title=The Elk Are Back, Aided By the Hunter Population
|author=Jim Robbins
|date=7 May 1989
|access-date=5 September 2022
|archive-date=6 September 2022
|archive-url=https://web.archive.org/web/20220906011043/https://www.nytimes.com/1989/05/07/weekinreview/ideas-trends-the-elk-are-back-aided-by-the-hunter-population.html
|url-status=live
}}</ref>
==Fees charged to customers==
The major '''credit card fees''' are for:
* Membership fees (annual or monthly), sometimes a percentage of the credit limit.
* Cash advances and convenience cheques (often 3% of the amount)
* Charges that result in exceeding the credit limit on the card (whether deliberately or by mistake), called over-limit fees
* Exchange rate loading fees (sometimes these might not be reported on the customer's statement, even when applied).<ref>{{cite web|url=http://www.creditchoices.co.uk/credit-card-charges-abroad.html|title=credit cards abroad|last=Gracia|first=Mike|date=9 May 2008|publisher=creditchoices.co.uk|archive-url=https://web.archive.org/web/20080612170006/http://www.creditchoices.co.uk/credit-card-charges-abroad.html|archive-date=12 June 2008|access-date=9 May 2008}}
</ref> The variation of exchange rates applied by different credit cards can be very substantial, as much as 10% according to a [[Lonely Planet]] report in 2009.<ref>{{cite web|url=http://www.lonelyplanet.com/tonywheeler/my_lists/why_we_cut_up_our_credit_cards/|title=Comparison of exchange rates using Visa and Diners Club cards in Bali|date=3 March 2010|publisher=Lonelyplanet.com|archive-url=https://web.archive.org/web/20110711041436/http://www.lonelyplanet.com/tonywheeler/my_lists/why_we_cut_up_our_credit_cards/|archive-date=11 July 2011|access-date=28 July 2011}}</ref>
* Late or overdue payments
* Returned cheque fees or payment processing fees (e.g. phone payment fee)
* Transactions in a foreign currency (as much as 3% of the amount). A few financial institutions do not charge a fee for this.
* Finance charge is any charge that is included in the cost of borrowing money.<ref>{{Cite web|url=https://www.fool.com/the-ascent/credit-cards/articles/what-is-a-finance-charge-and-how-can-i-avoid-it/|title=What Is a Finance Charge?|date=15 December 2020|access-date=7 October 2020|archive-date=10 October 2020|archive-url=https://web.archive.org/web/20201010143308/https://www.fool.com/the-ascent/credit-cards/articles/what-is-a-finance-charge-and-how-can-i-avoid-it/|url-status=live}}</ref>
Some card issuers charge customers who exceed a monthly usage cap (even if they pay off during the month and so never exceed their credit limit). And other issuers charge customers who overpay and so have a negative balance.{{Citation needed|date=February 2024}}
In the U.S., the [[Credit CARD Act of 2009]] specifies that credit card companies must send cardholders a notice 45 days before they can increase or change certain fees. This includes annual fees, cash advance fees, and late fees.<ref>{{cite web|url=http://www.federalreserve.gov/consumerinfo/wyntk_creditcardrules.htm|title=Federal Reserve Board: Credit Card Rules|publisher=U.S. Federal Reserve Board|archive-url=https://web.archive.org/web/20140106014436/http://www.federalreserve.gov/consumerinfo/wyntk_creditcardrules.htm|archive-date=6 January 2014|access-date=27 January 2014}}</ref>
===Controversy===
One controversial area is the [[trailing interest]] issue. Trailing interest refers to interest that accrues on a balance after the monthly statement is produced, but before the balance is repaid. This additional interest is typically added to the following monthly statement. U.S. Senator [[Carl Levin]] raised the issue of millions of Americans affected by hidden fees, compounding interest and cryptic terms. Their woes were heard in a Senate Permanent Subcommittee on Investigations hearing which was chaired by Senator Levin, who said that he intends to keep the spotlight on credit card companies and that legislative action may be necessary to purge the industry.<ref>{{cite web|url=http://www.consumeraffairs.com/news04/2007/03/senate_credit_cards02.html|title=Credit Card Executives Tough Out Senate Hearing|author=Joseph S. Enoch|work=ConsumerAffairs |publisher=Consumeraffairs.com|access-date=28 July 2011}}</ref> In 2009, the C.A.R.D. Act was signed into law, enacting protections for many of the issues Levin had raised.
====Hidden costs====
In the United Kingdom, merchants won the right through The Credit Cards (Price Discrimination) Order 1990<ref>{{cite web|url=http://www.opsi.gov.uk/si/si1990/Uksi_19902159_en_1.htm|title=Statutory Instrument 1990 No. 2159: The Credit Cards (Price Discrimination) Order 1990|publisher=Opsi.gov.uk|access-date=28 July 2011|archive-date=19 January 2010|archive-url=https://web.archive.org/web/20100119050159/http://www.opsi.gov.uk/si/si1990/Uksi_19902159_en_1.htm|url-status=live}}</ref> to charge customers different prices according to the payment method; this was later removed by the EU's 2nd [[Payment Services Directive]]. As of 2007, the United Kingdom was one of the world's most credit card-intensive countries, with 2.4 credit cards per consumer, according to the [[APACS|U.K. Payments Administration Ltd]].<ref>[http://www.apacs.org.uk/resources_publications/card_facts_and_figures.html "Plastic cards in the UK and how we used them in 2007"] {{webarchive|url=https://web.archive.org/web/20081225210810/http://www.apacs.org.uk/resources_publications/card_facts_and_figures.html|date=25 December 2008}}</ref>
In the United States until 1984, federal law prohibited surcharges on card transactions. Although the federal [[Truth in Lending Act]] provisions that prohibited surcharges expired that year, a number of states have since enacted laws that continue to outlaw the practice; California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Maine, New York, Oklahoma, and Texas have laws against surcharges. As of 2006, the United States probably had one of the world's highest if not the top ratio of credit cards per capita, with 984 million bank-issued Visa and MasterCard credit card and debit card accounts alone for an adult population of roughly 220 million people.<ref>{{cite web|url=http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2007_3YR_G00_S0101&-ds_name=ACS_2007_3YR_G00_|title=US Census: 2005–2007 American Community Survey 3-Year Estimates|author=American FactFinder, United States Census Bureau|publisher=Factfinder.census.gov|archive-url=https://archive.today/20200212055921/http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2007_3YR_G00_S0101&-ds_name=ACS_2007_3YR_G00_|archive-date=12 February 2020|access-date=28 July 2011}}</ref> The credit card per U.S. capita ratio was nearly 4:1 as of 2003<ref>{{cite web|url=http://www.nationalscoreindex.com/ViewAllGraphs.aspx|title=Experian's National Score Index|publisher=Nationalscoreindex.com|access-date=28 July 2011|archive-date=14 July 2011|archive-url=https://web.archive.org/web/20110714155437/http://www.nationalscoreindex.com/ViewAllGraphs.aspx}}</ref> and as high as 5:1 as of 2006.<ref>{{cite magazine|url=https://foreignpolicy.com/story/cms.php?story_id=4207|title=Prime Numbers: The Plastic Revolution|date=19 February 2008|magazine=Foreign Policy|archive-url=https://web.archive.org/web/20090115110602/http://www.foreignpolicy.com/story/cms.php?story_id=4207|archive-date=15 January 2009|access-date=28 July 2011}}</ref>
==Over-limit charges==
===United Kingdom===
Consumers who keep their account in good order by always staying within their credit limit, and always making at least the minimum monthly payment will see interest as the biggest expense from their card provider. Those who are not so careful and regularly surpass their credit limit or are late in making payments were exposed to multiple charges, until a ruling from the [[Office of Fair Trading]]<ref>{{cite web|url=http://www.oft.gov.uk/news/press/2006/68-06 |title=Current credit card default charges unfair |date=20 March 2007 |publisher=Oft.gov.uk |access-date=28 July 2011 |archive-url=https://web.archive.org/web/20100327193555/http://www.oft.gov.uk/news/press/2006/68-06 |archive-date=27 March 2010 }}</ref> that they would presume charges over £12 to be unfair which led the majority of card providers to reduce their fees to £12.
The higher fees originally charged were claimed to be designed to recoup the card operator's overall business costs and to try to ensure that the credit card business as a whole generated a profit, rather than simply recovering the cost to the provider of the limit breach, which has been estimated as typically between £3–£4. Profiting from a customer's mistakes is arguably not permitted under U.K. common law if the charges constitute penalties for breach of contract, or under the [[Unfair Terms in Consumer Contracts Regulations 1999]].
Subsequent rulings in respect of personal current accounts suggest that the argument that these charges are penalties for breach of contract is weak, and given the Office of Fair Trading's ruling it seems unlikely that any further test case will take place.
Whilst the law remains in the balance, many consumers have made claims against their credit card providers for the charges that they have incurred, plus interest that they would have earned had the money not been deducted from their account. It is likely that claims for amounts charged in excess of £12 will succeed, but claims for charges at the OFT's £12 threshold level are more contentious.
===United States===
The [[Credit CARD Act of 2009]] requires that consumers opt in to over-limit charges. Some card issuers have therefore commenced solicitations requesting customers to opt into over-limit fees, presenting this as a benefit as it may avoid the possibility of a future transaction being declined. Other issuers have simply discontinued the practice of charging over-limit fees. Whether a customer opts into the over-limit fee or not, banks will in practice have discretion as to whether they choose to authorize transactions above the credit limit or not. Of course, any approved over-limit transactions will only result in an over-limit fee for those customers who have opted into the fee. This legislation took effect on 22 February 2010. Following this Act, the companies are now required by law to show on a customer's bills how long it would take them to pay off the balance.
===France===
What is called a credit card in the United States - meaning the customer has a bill to pay at the end of the month - does not exist in the French banking system. A debit card debits the customer's account as the transaction is made, while a credit card debits it at the end of the month automatically, making it impossible to fall into debt by forgetting to pay a credit card bill.
Specialized credit companies can provide these cards, but they are separate from the regular banking system. In this case, the consumer decides the maximum amount which can not be exceeded.
Credit scores or credit history do not exist in France, and therefore the need to build a credit history through credit cards does not exist. Personal information cannot be shared among banks, which means there is no centralized system for tracking creditworthiness. The only centralized system in France is for individuals who have not repaid credit or issued checks without sufficient funds or those who file for bankruptcy. This system is handled by the Banque de France.<ref>{{cite web | url=https://www.pbs.org/wgbh/pages/frontline/shows/credit/more/world.html | title=Secret History of the Credit Card - More to Explore | FRONTLINE | website=[[PBS]] }}</ref>
=== Vietnam ===
In [[Vietnam]], there are currently over 39 million active credit cards.<ref>{{Cite web |date=2023-09-16 |title=Thúc đẩy phát triển thẻ tín dụng nội địa |trans-title=Promoting the development of domestic credit cards |url=https://baochinhphu.vn/phat-trien-the-tin-dung-noi-dia-boi-day-con-la-thuong-hieu-quoc-gia-102230916070601815.htm |access-date=2024-02-06 |website=baochinhphu.vn |language=vi}}</ref><ref>{{Cite web |date=2023-09-15 |title=Số lượng thẻ tín dụng trên 39 triệu, thẻ nội địa mới hơn 800 ngàn |trans-title=Over 39 million credit cards, just over 800 thousand domestic cards |url=https://tuoitre.vn/so-luong-the-tin-dung-noi-dia-con-rat-khiem-ton-20230915211525954.htm |url-status=live |archive-url=https://web.archive.org/web/20240206153351/https://tuoitre.vn/so-luong-the-tin-dung-noi-dia-con-rat-khiem-ton-20230915211525954.htm |archive-date=6 February 2024 |access-date=2024-02-06 |website=TUOI TRE ONLINE |language=vi}}</ref> Credit limits in this country are set by the bank or card issuing organization based on various factors such as the applicant's income, credit score, credit history, and personal financial profile.<ref>{{Cite web |last=thuvienphapluat.vn |title=Văn bản hợp nhất 15/VBHN-NHNN 2021 Thông tư về hoạt động thẻ ngân hàng |url=https://thuvienphapluat.vn/van-ban/Tien-te-Ngan-hang/Van-ban-hop-nhat-15-VBHN-NHNN-2021-Thong-tu-ve-hoat-dong-the-ngan-hang-498681.aspx |access-date=2024-02-06 |website=THƯ VIỆN PHÁP LUẬT |date=17 June 2023 |archive-date=6 February 2024 |archive-url=https://web.archive.org/web/20240206153348/https://thuvienphapluat.vn/van-ban/Tien-te-Ngan-hang/Van-ban-hop-nhat-15-VBHN-NHNN-2021-Thong-tu-ve-hoat-dong-the-ngan-hang-498681.aspx |url-status=live }}</ref><ref>{{Cite web |title=Ngân hàng Nhà nước Việt Nam |url=https://vbpl.vn/nganhangnhanuoc/Pages/vbpq-toanvan.aspx?ItemID=150904 |access-date=2024-02-06 |website=vbpl.vn |archive-date=27 November 2024 |archive-url=https://web.archive.org/web/20241127005928/https://vbpl.vn/nganhangnhanuoc/Pages/vbpq-toanvan.aspx?ItemID=150904 |url-status=live }}</ref> Credit limits can be adjusted upon request and agreement between the user and the card provider.<ref>{{Cite web |date=2023-09-19 |title=Cách nâng hạn mức thẻ tín dụng |url=https://vtc.vn/cach-nang-han-muc-the-tin-dung-ar820701.html |access-date=2024-02-06 |website=Báo điện tử VTC News |language=vi |archive-date=6 February 2024 |archive-url=https://web.archive.org/web/20240206153349/https://vtc.vn/cach-nang-han-muc-the-tin-dung-ar820701.html |url-status=live }}</ref><ref>{{Cite web |title=Quy định về lãi, lãi suất và thỏa thuận lãi suất theo hợp đồng tín dụng |url=https://tapchitoaan.vn/an-le-so-082016al-cu-the-hoa-cach-tinh-lai-suat-khi-co-bien-dong-tren-thi-truong9107.html |access-date=2024-02-06 |website=tapchitoaan.vn |language=vi |archive-date=6 February 2024 |archive-url=https://web.archive.org/web/20240206153349/https://tapchitoaan.vn/an-le-so-082016al-cu-the-hoa-cach-tinh-lai-suat-khi-co-bien-dong-tren-thi-truong9107.html |url-status=live }}</ref> The penalty for exceeding the credit limit is set by each bank and usually ranges from 1% to 5% of the over-the-limit amount per month.<ref>{{Cite web |last=ONLINE |first=TUOI TRE |date=2019-05-25 |title=Choáng váng nợ thẻ tín dụng 400.000 đồng bị tính lãi và phạt 3 triệu |url=https://tuoitre.vn/choang-vang-no-the-tin-dung-400-000-dong-bi-tinh-lai-va-phat-3-trieu-20190525081535144.htm |access-date=2024-02-06 |website=TUOI TRE ONLINE |language=vi |archive-date=6 February 2024 |archive-url=https://web.archive.org/web/20240206153349/https://tuoitre.vn/choang-vang-no-the-tin-dung-400-000-dong-bi-tinh-lai-va-phat-3-trieu-20190525081535144.htm |url-status=live }}</ref><ref>{{Cite web |title=Trao đổi về những nguy cơ rủi ro từ việc rút tiền mặt qua thẻ tín dụng |url=https://mof.gov.vn/webcenter/portal/ttpltc/pages_r/l/chi-tiet-tin-ttpltc?dDocName=MOFUCM159339 |access-date=2024-02-06 |website=mof.gov.vn}}</ref> In addition, cardholders will also be charged interest on the amount spent over the limit.<ref>{{Cite news |date=2023-05-20 |title=Cách tính lãi thẻ tín dụng và phí trả chậm ít người biết |url=https://laodong.vn/kinh-doanh/cach-tinh-lai-the-tin-dung-va-phi-tra-cham-it-nguoi-biet-1194816.ldo |access-date=2024-02-06 |language=vi |archive-date=6 February 2024 |archive-url=https://web.archive.org/web/20240206153348/https://laodong.vn/kinh-doanh/cach-tinh-lai-the-tin-dung-va-phi-tra-cham-it-nguoi-biet-1194816.ldo |url-status=live }}</ref><ref>{{Cite web |last=ONLINE |first=TUOI TRE |date=2019-09-29 |title='Choáng' với phí thẻ tín dụng |url=https://tuoitre.vn/choang-voi-phi-the-tin-dung-2019092909322786.htm |access-date=2024-02-06 |website=TUOI TRE ONLINE |language=vi |archive-date=6 February 2024 |archive-url=https://web.archive.org/web/20240206153348/https://tuoitre.vn/choang-voi-phi-the-tin-dung-2019092909322786.htm |url-status=live }}</ref>
===European Union===
* Interchange fee cap: The interchange fee is a fee paid between banks for the acceptance of card-based transactions, and it is usually a percentage of the transaction amount. In the EU, the interchange fee is capped:
** For debit cards, a maximum of 0.2% of the transaction amount. This cap also applies to universal cards, which can function as both debit and credit cards.
** For credit cards, a maximum of 0.3% of the transaction amount.
In comparison, interchange fees in Canada average 1.78%, and 1.73% in the US.<ref>{{cite web | url=https://www.lendingtree.com/credit-cards/articles/na-vs-eu-interchangefees/ | title=The Cost of Accepting Credit Card Payments: NA vs. EU }}</ref>
These caps are designed to prevent excessive fees and ensure a level playing field for all financial institutions.
* Fees Outside the Country of Origin Cap: According to EU regulations, payment and withdrawal fees outside the country of origin are unlawful. This means that a French customer withdrawing money in Italy cannot be made to pay more fees than a withdrawal in France. The same rule applies to payments made with credit or debit cards. In general, this means that there are no additional fees for using a credit card abroad.
==Neutral consumer resources==
===Canada===
The Government of Canada maintains a database of the fees, features, interest rates and reward programs of nearly 200 credit cards available in Canada. This database is updated on a quarterly basis with information supplied by credit card issuing companies. Information in the database is published every quarter on the website of the [[Financial Consumer Agency of Canada]] (FCAC).<ref name=Canada.govSite>{{citation |url=https://www.canada.ca/en/financial-consumer-agency/services/credit-cards/credit-card-work.html |title=How credit cards work - From: Financial Consumer Agency of Canada |date=6 June 2016 |access-date=31 August 2022 |archive-date=31 August 2022 |archive-url=https://web.archive.org/web/20220831161046/https://www.canada.ca/en/financial-consumer-agency/services/credit-cards/credit-card-work.html |url-status=live }}</ref>
Information in the database is published in two formats. It is available in [[PDF]] comparison tables that break down the information according to the type of credit card, allowing the reader to compare the features of, for example, all the student credit cards in the database. The database also feeds into an interactive tool on the FCAC website.<ref>{{cite web|url=http://itools-ioutils.fcac-acfc.gc.ca/CCS-SCC/CCSearchCriteria.aspx?lang=eng |title=FCAC - Interactive Tools - Credit Card Selector Tool |work=FCAC
|archive-url=https://web.archive.org/web/20131221014248/http://itools-ioutils.fcac-acfc.gc.ca/CCS-SCC/CCSearchCriteria.aspx?lang=eng
|archive-date=21 December 2013 }}</ref> The interactive tool uses several interview-type questions to build a profile of the user's credit card usage habits and needs, eliminating unsuitable choices based on the profile, so that the user is presented with a small number of credit cards and the ability to carry out detailed comparisons of features, reward programs, interest rates, etc.
==Credit cards in ATMs==
[[File:ATM 750x1300.jpg|thumb|upright=0.8|right|Acceptance mark at an [[automated teller machine]] ]]
Many credit cards can be used in an [[Automatic teller machine|ATM]] to withdraw money against the credit limit extended to the card, but many card issuers charge interest on cash advances before they do so on purchases. The interest on cash advances is commonly charged from the date the withdrawal is made, and unlike interest on purchases, the interest on cash advances is not waived even if the customer pays the statement balance in full. Many card issuers levy a commission for cash withdrawals, even if the ATM belongs to the same bank as the card issuer. Merchants do not offer [[debit card cashback|cashback]] on credit card transactions because they would pay a percentage commission of the additional cash amount to their bank or merchant services provider, thereby making it uneconomical. Discover is a notable exception to the above. A customer with a Discover card may get up to $120 cashback if the merchant allows it. This amount is simply added to the card holder's cost of the transaction and no extra fees are charged as the transaction is not considered a cash advance.
In the US, many credit card companies will also when applying payments to a card, do so, for the matter at hand, at the end of a billing cycle, and apply those payments to everything before cash advances. For this reason, many consumers have large cash balances, which have no grace period and incur interest at a rate that is (usually) higher than the purchase rate, and will carry those balances for years, even if they pay off their statement balance each month. This practice is not permitted in the UK, where the law states that any payments must be assigned to the balance bearing the highest rate of interest first.
===Acceptance mark===
An ''acceptance mark'' is a logo or design that indicates which card schemes an ATM or [[merchant]] accepts. Common uses include decals and signs at merchant locations or in merchant advertisements. The purpose of the mark is to provide the cardholder with the information where the card can be used. An acceptance mark differs from the card product name (such as [[Centurion Card|American Express Centurion card]], [[Eurocard (payment card)|Eurocard]]), as it shows the card scheme (group of cards) accepted. An acceptance mark however corresponds to the card scheme mark shown on a card.
An acceptance mark is however not an absolute guarantee that all cards belonging to a given card scheme will be accepted. On occasion cards issued in a foreign country may not be accepted by a merchant or ATM due to contractual or legal restrictions.
==Credit cards as funding for entrepreneurs==
Credit cards and prepaid cards<ref name=TeenResponPrepaid/> are a very risky way for [[entrepreneur]]s to acquire capital for their start ups when more conventional financing is unavailable. [[Len Bosack]] and [[Sandy Lerner]] used personal credit cards<ref>{{cite web |url=http://pdp10.nocrew.org/docs/cisco.html |title=A start-up's true tale |publisher=Pdp10.nocrew.org |access-date=28 July 2011 |archive-date=10 October 2019 |archive-url=https://web.archive.org/web/20191010020433/http://pdp10.nocrew.org/docs/cisco.html |url-status=live }}</ref> to start [[Cisco Systems]]. [[Larry Page]] and [[Sergey Brin]]'s start up of [[Google]] was financed by credit cards to buy the necessary computers and office equipment, more specifically "a terabyte of [[hard disks]]".<ref>[http://www.google.com/intl/en/corporate/history.html Google About Page under 1998] {{Webarchive|url=https://web.archive.org/web/20110520212930/http://www.google.com/intl/en/corporate/history.html |date=20 May 2011 }} page retrieved 30 May 2007.</ref>{{Failed verification|date=February 2011}} Similarly, filmmaker [[Robert Townsend (actor)|Robert Townsend]] financed part of ''[[Hollywood Shuffle]]'' using credit cards.<ref>{{Cite magazine|date=2017-03-20|title=30 Years Later, the Searing Critiques of Hollywood Shuffle Still Sting|url=https://www.vanityfair.com/hollywood/2017/03/hollywood-shuffle-anniversary-robert-townsend-keenen-ivory-wayans|access-date=2022-01-24|magazine=Vanity Fair|language=en-US|archive-date=28 January 2022|archive-url=https://web.archive.org/web/20220128130112/https://www.vanityfair.com/hollywood/2017/03/hollywood-shuffle-anniversary-robert-townsend-keenen-ivory-wayans|url-status=live}}</ref> Director [[Kevin Smith]] funded ''[[Clerks (1994 film)|Clerks]]'' in part by maxing out several credit cards.<ref>{{cite news |title=Kevin Smith: how we made Clerks |url=https://www.theguardian.com/film/2019/may/07/how-we-made-clerks-kevin-smith |access-date=28 January 2020}}</ref> Actor [[Richard Hatch (actor)|Richard Hatch]] also financed his production of ''[[Battlestar Galactica: The Second Coming]]'' partly through his credit cards. Famed hedge fund manager [[Bruce Kovner]] began his career (and, later on, his firm [[Caxton Associates]]) in financial markets by borrowing from his credit card. U.K. entrepreneur [[James Caan (entrepreneur)|James Caan]] (as seen on ''[[Dragons' Den]]'') financed his first business using several credit cards.
However, these stories are [[Survivorship bias|outliers]], as more than 80% of all startups fail in their first year,<ref>U.S. Bureau of labour statistics. [https://www.bls.gov/bdm/us_age_naics_00_table7.txt "Survival of Private Sector Establishments by Opening Year."]</ref> leaving anyone who attempts this method of financing their startup with significant [[Legal liability#Liability in business|personal costs]], as credit cards are in the [[Legal name|name]] of a person, rather than that of a [[Limited liability company|business]].
==Cashback reward programs==
'''Cashback reward programs''' are [[incentive program]]s established by credit card issuers to encourage use of the card. Spending on the card typically awards the card users with points or cash-points that allow the user to redeem to rewards, such as gift cards, statement credits/cash deposited in an account of the card user's choice, or exchanging them to Frequent Flyer programs. Spending that qualifies for these types of points can include/exclude [[balance transfer]]s, [[payday loan]]s, or cash advances. Points typically have no cash value until redeemed via the issuer.
Depending on the type of card, rewards will generally cost the issuer between 0.25% and 2.0% of the spread. Networks such as Visa or MasterCard have increased their fees to allow issuers to fund their rewards system. Some issuers discourage redemption by forcing the cardholder to call customer service for rewards. On their servicing website, redeeming awards is usually a feature that is very well hidden by the issuers.<ref>{{cite web
|url=https://www.nbcnews.com/business/consumer/31-percent-credit-card-holders-aren-t-redeeming-their-rewards-n746501
|title=31 Percent of Credit Card Holders Aren't Redeeming Their Rewards
|author=Spector, Nicole
|website=[[CNBC|NBC News]]
|date=14 April 2017
|access-date=3 June 2020
|archive-date=3 November 2020
|archive-url=https://web.archive.org/web/20201103030459/https://www.nbcnews.com/business/consumer/31-percent-credit-card-holders-aren-t-redeeming-their-rewards-n746501
|url-status=live
}}</ref> Many credit card issuers, particularly those in the [[United Kingdom]], [[Canada]] and [[United States]], run these programs to encourage use of the card. Reward programs create a [[two-sided market]] between merchants and consumers resulting in increased adoption of credit cards.<ref name="n164">{{cite journal | last1=Huynh | first1=Kim | last2=Nicholls | first2=Gradon | last3=Shcherbakov | first3=Oleksandr | title=Equilibrium in Two-Sided Markets for Payments: Consumer Awareness and the Welfare Cost of the Interchange Fee | date=2022 | doi=10.34989/SWP-2022-15 | journal=Bank of Canada Staff Working Paper}}</ref>
Card holders typically receive between 0.5% and 3% of their net expenditure (purchases minus refunds) as an annual rebate, which is either credited to the credit card account or paid to the card holder separately.<ref>{{cite web|title=Cash Back|url=http://www.investopedia.com/terms/c/cash-back.asp|website=Investopedia.com|publisher=Investopedia|access-date=12 July 2014|archive-date=14 July 2014|archive-url=https://web.archive.org/web/20140714133411/http://www.investopedia.com/terms/c/cash-back.asp|url-status=live}}</ref> Unlike unused gift cards, in whose case the [[Breakage (accounting)|breakage]] in certain U.S. states goes to the state's treasury,<ref>{{cite news |url=https://www.npr.org/sections/thetwo-way/2011/12/27/144308234/lost-money-41-billion-in-gift-cards-havent-been-redeemed-since-2005 |title=Lost Money: $41 Billion In Gift Cards Haven't Been Redeemed Since 2005 |author=Memmott, Mark |website=[[NPR]] |date=27 December 2011 |access-date=3 June 2020 |archive-date=29 July 2020 |archive-url=https://web.archive.org/web/20200729001356/https://www.npr.org/sections/thetwo-way/2011/12/27/144308234/lost-money-41-billion-in-gift-cards-havent-been-redeemed-since-2005 |url-status=live }}</ref> unredeemed credit card points are retained by the issuer.<ref>{{cite web
|url=https://www.businessinsider.com/why-you-should-redeem-credit-card-rewards-right-away-2017-4
|title=Credit card companies thrive on people not redeeming their rewards—and a surprising number of people never do
|author=Morrell, Alex
|website=Business Insider
|access-date=3 June 2020
|archive-date=29 July 2020
|archive-url=https://web.archive.org/web/20200729003150/https://www.businessinsider.com/why-you-should-redeem-credit-card-rewards-right-away-2017-4
|url-status=live
}}</ref>
A 2010 public policy study conducted by the Federal Reserve concluded cash back reward programs result in a monetary transfer from poor to rich households. Eliminating cash back reward programs would reduce merchant fees which would in turn reduce consumer prices because retail is such a competitive environment.<ref>[http://www.bostonfed.org/economic/ppdp/2010/ppdp1003.htm Who Gains and Who Loses from Credit Card Payments?] {{Webarchive|url=https://web.archive.org/web/20160330191648/http://www.bostonfed.org/economic/ppdp/2010/ppdp1003.htm |date=30 March 2016 }} Federal Reserve Bank of Boston, 31 August 2010</ref>
===Costs of rewards program to the merchant===
When accepting payment by credit card, [[Merchant account|merchants]] typically pay a percentage of the transaction amount in commission to their bank or merchant services provider. The credit card issuer is sharing some of this commission with the card holder to incentivise them to use the credit card when making a payment. Rewards-based credit card products like cash back are more beneficial to consumers who pay their credit card statement off every month. Rewards-based products generally have higher [[annual percentage rate]]s. If the balance is not paid in full every month, the extra interest will eclipse any rewards earned. Most consumers do not know that their rewards-based credit cards charge higher "interchange" fees to the vendors who accept them.<ref>{{Cite web |last=Couch |first=Christina |title=Do Merchants Hate Rewards Credit Cards? |url=https://www.cardratings.com/bonus-or-bogus-who-pays-for-rewards-credit-cards.html |access-date=2 April 2021 |website=cardratings.com |date=16 February 2012 |language=en |archive-date=2 March 2021 |archive-url=https://web.archive.org/web/20210302135251/https://www.cardratings.com/bonus-or-bogus-who-pays-for-rewards-credit-cards.html |url-status=live }}</ref>
==See also==
{{Portal|Money}}
<!-- Note that links should not be added here if the subject can be linked from the article instead. This list is alphabetized. -->
{{Div col|colwidth=19em}}
* [[Card (disambiguation)]]
* [[Accountable fundraising]]
* [[ATM card]]
* [[Billing descriptor]]
* [[Cashback website]]
* [[Compulsive shopping]]
* [[Credit card hijacking]]
* [[Credit rating agency]]
* [[Credit reference agency]]
* [[Criticism of credit scoring systems in the United States]]
* [[Debit card]]
* [[Debt-lag]]
* [[Dynamic currency conversion]], or DCC
* [[Electronic money]]
* [[Fair Credit Reporting Act]]
* [[
* [[
* [[
* [[Purchasing card]]
{{Div col end}}
==References==
{{Reflist}}
==Further reading==
* Klein, Lloyd. ''It's in the cards: consumer credit and the American experience'' (Greenwood Publishing Group, 1999);
* Lee, Jinkook, and Kyoung‐Nan Kwon. "Consumers' use of credit cards: Store credit card usage as an alternative payment and financing medium." ''Journal of Consumer Affairs'' 36.2 (2002): 239-262.
* Mandell, Lewis. ''The credit card industry: a history'' (Twayne Publishers, 1990).
* Manning, Robert D. ''Credit card nation: The consequences of America's addiction to credit'' (Basic Books, 2001).
* Marron, Donncha. ''Consumer credit in the United States: A sociological perspective from the 19th century to the present'' (Palgrave Macmillan, 2009).
* Montgomerie, Johnna. "The financialization of the American credit card industry." ''Competition & Change'' 10#3 (2006): 301–319.
* Scott, Robert H. "Credit card use and abuse: a Veblenian analysis." ''Journal of Economic Issues'' (2007): 567–574. [http://bluehawk.monmouth.edu/~rscott/articles/Scott-Veblen%20JEI%20Final.pdf online]
==External links==
{{Commons category|Credit cards}}
* [https://www.consumer.ftc.gov/articles/0332-credit-debit-and-charge-cards Credit Cards – Money Matters] – Consumer credit card advice from the [[Federal Trade Commission]]
* [https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/credit-card-fraud Avoiding Credit Card Fraud] – Advice from the FBI
{{Authority control}}
{{Credit cards}}
{{Customer loyalty programs}}
{{Consumer debt}}
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[[Category:American inventions]]
[[Category:Business terms]]
[[Category:Cashback and rebate]]
[[Category:Credit cards| ]]
[[Category:Payment systems]]
[[Category:Products introduced in 1950]]
[[Category:20th-century inventions]]
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