credit card

A plastic payment card which allows the owner to obtain goods and services without the requirement to pay cash and on credit terms.

Transactions during a month are totalled and presented to the card holder for settlement on a monthly basis. Alternatively a percentage of the outstanding amount can be paid and the balance extended to the next month and so on. This will normally incur a much higher annual rate of interest than usual, for example, 2% per month being equivalent to an annual percentage rate of 26.82%.

In addition to obtaining goods, credit cards can be used to obtain cash.