8/19/2017

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Credit Cards
by John M. Roberts

Question: What are credit cards?

Answer: Credit cards are monetary transaction tools that can be used as a substitute for checks. Credit cards are usually flat plastic devices, that are used, instead of cash or checks, to make retail purchases and/or to pay bills. Credit cards may be bank cards, ATM cards, or store cards.

Question: What rights and benefits are there to having credit cards?

Answer: The credit card gives the holder the right of it's use when presenting it, if the proprietor accepts credit cards instead of a cash payment. It can be used and accepted as legal tender for the payment of purchases and the payment of certain bills. A credit card can also be used as a form of identification and they are great to have in case of an emergency or when traveling.

Question: How are credit cards used?

Answer: Credit cards can be used in several ways. They can be used in stores or other venues for direct purchases by means of swiping them through electronic devices that read the bar code and the account numbers, or by typing the account numbers on a computer and sending it over the internet. In the case of the ATM card, all you have to do is remember the pin number.

Question: Is using a credit card like borrowing money?

Answer: Yes. When a credit card is used, payment is made on the holders behalf to be paid back at a future date. It is similar to borrowing money or taking a cash advance. Some credit card companies allow cash withdrawals while others only allow purchases. There are usually interest charges and certain other fees associated with the use of credit cards.

Question: When credit cards are used, how are the businesses that accept the cards, proprietors and vendors, paid?

Answer: The proprietor or vendor sends his bill to the issuing credit card company. The issuing card company processes the information on the bill, then sends the proprietor or vendor their payments in cash, usually routed electronically to a bank account that is set up to receive the funds.

Question: How can I get credit cards?

Answer: You can get credit cards by applying for them at department stores, banks, credit unions, and other stores and places of business. You can fill out applications for credit cards either at the stores, online, or through the mail and you must sign a cardholders agreement

Question: If I apply for a credit card, will the card company run a credit check?

Answer: Most definitely. Since credit cards are basically loans or lines of credit, companies that issue credit cards have to make sure that their investments are protected. They will look at your credit history and determine your credit worthiness before issuing you the card.

 

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