Credit Card Definition

A credit card is a small plastic card issued to individuals to access a flexible loan scheme which is invoked usually at the time of use. Typically, the credit card draws upon a so-called "revolving" line of credit up to a credit limit, or theoretical maximum loan amount. An individual holding a credit card account has agreed through a legal contract to repay the debt through periodic, regular repayments colloquially known as "minimum monthly payments". Credit cards offer great convenience and some consumer protections, but are not considered a wise form of long-term credit acquisition because of their typically very high annual percentage rate.