LeoGlossary: Credit Card

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A credit card is a thin rectangular piece of plastic or metal issued by a bank or financial services company that allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment. Credit cards are a type of revolving credit, which means that borrowers have a set credit limit and can borrow up to that amount at any time. Borrowers are then required to make monthly payments to repay the borrowed amount, plus interest.

Credit cards can be used for a variety of purposes, including:

  • Making purchases at merchants that accept credit cards
  • Withdrawing cash from ATMs
  • Paying for online and in-app purchases
  • Renting cars and hotel rooms
  • Making travel arrangements
  • Building credit history

Credit cards can be a convenient and useful way to pay for goods and services, but it is important to use them responsibly. Borrowers should only charge what they can afford to repay each month and avoid carrying a balance from month to month, as this can lead to high interest charges.

Here are some tips for using credit cards responsibly:

  • Set a budget and stick to it. Only charge what you can afford to repay each month.
    Pay your bill on time and in full each month. This will help you avoid interest charges and build your credit history.
  • Don't exceed your credit limit. This can damage your credit score and make it more difficult to qualify for loans in the future.
  • Shop around for the best credit card deals. Compare interest rates, annual fees, and rewards programs before you apply.
  • Be aware of the fees associated with credit cards, such as annual fees, foreign transaction fees, and late payment fees.
  • Use your credit card to build your credit history. If you have a good credit score, you will be eligible for lower interest rates on loans and other forms of credit.

If you are considering getting a credit card, it is important to weigh the pros and cons carefully. Credit cards can be a useful tool for managing your finances, but it is important to use them responsibly.

Credit score is important because the financial institutions behind the card are actually issuing an unsecured loan. This means they want to establish who is going to repay. The APR is usually time to the risk the bank is taking on by lending the money to the borrower.

Largest Issuers

The largest credit card companies in the United States are:

  • Chase
  • American Express
  • Citi
  • Capital One
  • Bank of America
  • Discover
  • U.S. Bank
  • Wells Fargo
  • Synchrony Bank
  • Barclays

These companies account for the vast majority of credit card purchases in the United States. They offer a wide variety of credit cards, with different features and benefits, to meet the needs of different consumers.

It is important to note that there is a difference between credit card issuers and credit card networks. Credit card issuers are the companies that issue credit cards to consumers and businesses. Credit card networks are the companies that process credit card transactions. The four major credit card networks are Visa, Mastercard, American Express, and Discover.

American Express and Discover are both credit card issuers and credit card networks. This means that they issue their own credit cards and also process credit card transactions for other credit card issuers.


The history of the credit card can be traced back to ancient Mesopotamia, where clay tablets were used to record transactions between merchants. In the 19th century, merchants in the United States began issuing charge coins to regular customers, which could be used to make purchases without having to pay cash upfront.

The first modern credit card was introduced in 1950 by Diners Club. Diners Club cards were originally intended to be used for travel and entertainment expenses, but they quickly became popular for other types of purchases as well.

In 1958, Bank of America launched the BankAmericard, which was the first credit card to offer revolving credit. This meant that cardholders could carry a balance from month to month, as long as they made a minimum payment each month.

The BankAmericard was a huge success, and other banks soon began issuing their own credit cards. In 1966, Bank of America renamed its card Visa, and in 1968, a group of banks formed the Master Charge credit card association (which was later renamed Mastercard).

By the early 1970s, credit cards were widely accepted in the United States. In the 1980s, credit card companies began offering rewards programs to attract and retain customers. These programs typically offer points or miles that can be redeemed for travel, merchandise, or cash back.

Today, credit cards are one of the most popular forms of payment in the world. Billions of people use credit cards to make purchases online, in stores, and over the phone.

Here are some key milestones in the history of the credit card:

  • 1950: Diners Club introduces the first modern credit card.
  • 1958: Bank of America launches the BankAmericard, the first credit card to offer revolving credit.
  • 1966: Bank of America renames its card Visa.
  • 1968: A group of banks forms the Master Charge credit card association (which was later renamed Mastercard).
  • 1970s: Credit cards become widely accepted in the United States.
  • 1980s: Credit card companies begin offering rewards programs.
  • 1990s: Credit cards become popular for online shopping.
  • 2000s: Contactless payment and mobile wallets are introduced.

Credit cards have revolutionized the way people pay for goods and services. They have made it easier and more convenient to shop, travel, and make other purchases.


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