1.1 What is a credit card?

Fundamentally, a credit card is a method of making a payment for goods and services named after the small card given to users to access the payment facility.

Credit cards differ from debit cards because they do not remove funds from the user’s bank account to cover the value of the transaction.

Credit cards are so named because they are used to link the user with a credit facility offered by the card issuer. The issuer lends the cardholder money which can then be used to make payments to merchants.

Charge cards, although sometimes classified as a type of credit card, are different to credit cards because the balance has to be paid off in full each month. Credit cards allow the user to carry their balance over to the next month in return for paying an interest payment.

Funnily enough, most credit cards are the same size and shape because they follow the ISO 7810; an international standard that defines formats for certain types of card.

The most common credit card size is 85.60 x 53.98mm.

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