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    The days of constantly having cash on hand simply so you may buy things are over. A trip to the mall today would allow you to walk into any store and get some new threads even if you didn’t have any money on you. A credit card payment at the register will get you your receipt and out the door. The same holds true for the acquisition of services and products from other dealers.

    Credit cards have simplified payment services and eliminated the need for consumers to physically visit financial institutions to apply for loans to cover unexpected costs. You may buy whatever you want with a credit card, and you simply have to pay interest on the revolving balance until you pay it off.

    What Is A Credit Card?

    A credit card is a payment card issued by a bank or credit union to a user (cardholder) for payment of goods or services based on the accrued debt of the user (which is a promise to the card issuer to pay them for the amounts plus the other agreed fees).

    Banks or credit unions are usually the issuers of credit cards to cardholders. A revolving account is created for cardholders and grants them a line of credit, which can be used to borrow money for purchasing goods and services or as a cash advance. 

    We have two classes of credit cards, and they are: 

    1. Consumer credit cards
    2. Business credit cards 

    Also, credit cards are of different configurations. We have plastic cards, while some are made from metal (gold, stainless steel, palladium, titanium). We also have a few gemstone-encrusted metal cards. 

    The Front of a typical credit card contains the following: 

    1. Issuing Bank Logo
    2. EMV Chip (for smart cards)
    3. Hologram
    4. Card number
    5. Card network logo
    6. Expiration date
    7. Cardholder name
    8. Contactless chip

    While the Back/Reverse side of a typical credit card contains the following: 

    1. Magnetic stripe
    2. Signature strip
    3. Card security code

    Advantages Of Credit Cards

    Using credit cards comes with a couple of benefits, and they include: 

    1. Purchase On Credit

     The beauty of credit cards is that every cardholder has a credit limit, and you can buy anything you want within that limit and pay off the debt at your convenience. From grocery shopping to purchasing home appliances, you can use it to purchase a wide range of goods and services. 

    It doesn’t matter if you buy items of high value on credit; it wouldn’t affect your monthly budget. You can always convert the total amount of your purchases into low-cost EMIs to spread the repayment over weeks or months. 

    2. Provision Of Interest-free Cash Withdrawals

    With some credit cards, you can withdraw cash up to a certain limit to cater to an emergency, and you don’t have to pay interest for up to 40-50 days. Such credit cards give you an edge when faced with unforeseen financial expenses. 

    3. Widely Accepted Form Of Payment

    Over time, credit cards have become the most accepted form of payment. With credit cards, you can travel to different cities in the world without carrying plenty of cash with you. You don’t have to worry about running out of cash to pay bills or purchase items, as credit cards are accepted everywhere. 

    4. Grow Your Credit Score

    Shopping or purchasing items on credit is not the only benefit you get from using credit cards. You also grow your credit score when you use credit cards frequently (and pay back the debt). When you use credit cards and repay the borrowed amount on time, your CIBIL score grows. The growth of the CIBIL score means that your credit limit is increased, and you can secure loans without difficulty in the future. 

    5. Provide Insurance

    Insurance coverage is one of the benefits you enjoy from owning and using a credit card. Credit cards come with personal accident and travel insurance coverage, which protects you financially from unforeseen circumstances. 


    Credit cards have made traveling easy for many people. Some credit cards come with complimentary lounge access at airports and railways. They also come with freebies like discounts on food at different restaurants and clothes at boutiques. Overall, credit cards have made life much easier by simplifying access to credit for personal needs. 

    READ ALSO: What is online bank? Meaning, types and importance of online banking login explained

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