Introduction to Credit Card and Usage
Credit Cards are instruments issued by banks to customers (card holders) to enable them to acquire goods, services or currency (where regulations will allow) on credit.
The customer will be provided with a plastic card carrying a line of credit that，ranging from several hundred to several thousand dollars，varies according to the creditability of the customer. The customer can gain goods or services by showing his card to a store, a hotel or a restaurant that has pre-arrangement with the issuing bank to accept credit cards. Having examined the validity of the card, the supplier will give a sales slip, in which the date of each sale, description of the merchandise or services supplied and the credit amount will be filled by hand-written letters at the lower right comer. The following information will then be processed on the slip together with the credit through an imprinter supplied by
a) the issuing bank；
b) the customer’s account number and name；
c) expiration date of the card；
d) the merchant's account number and name
Finally, the customer has to sign on the sales slip, to be compared with that on the card. In some cases, the card issuing bank may approve the exceeding of each sale amount above the card ceiling limit.
After the sale or service, the merchant will return the card and a copy of sales slip to the customer, keep another copy for file and send the third to the issuing bank for reimbursement within three business days after the transaction date. On the other side, the customer will receive a bill monthly from the bank for payment of his purchase. Usually, he is allowed a grace period of 25 days.
All the credit organizations charge interest on a monthly basis which may work out as high as 25 percent a year, yet judicious purchasing using a card can mean that you obtain up to seven weeks interest free credit. If used wisely, a credit card can cost nothing, or at least help to tide you over a period of financial difficulty.