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A credit card is the small plastic card issued to the borrower. the credit card issuer agrees to lend the buyer money (at a significant interest rate) for the purchase and promises to pay the seller. The credit card issuer typically provides a 25-day grace period during which credit card interest charges do not accrue. After the grace period has past, the buyer can payoff the credit card charge in full and thereby incur no interest rate charges or payoff a fraction of what is owed plus interest until the entire credit card charge is repaid. The two most common brands of credit card in the US are VISA and MasterCard. Closely related to the credit card is a charge card. Functionally, charge card use and credit card use are the same, but the invoice sent each month on a charge card must be paid in full. Unlike a credit card, the debit card is closer to payment by check, with funds withdrawn from the buyer’s account as quickly as the transaction can be processed. |
