Credit cards were first used in the United States during the 1920s. However, they became quite popular during the Second World War. They first used by hotel chains and oil companies. The companies used to provide small cards to customers so that they can make purchases. They mostly served as a kind of identification for customers. But their increase use now has almost made them an alternative to cash.
They are now referred to as plastic money. Since it is light and convenient to be carried anywhere, it has started to attract lot of attention from consumers. International brands like Visa and MasterCard starting providing global services tying up with banks and local financial institutions around the world. This gave one of the biggest advantages to travellers and global businessmen. Since then, credit cards have only grown and grown to such an extent that now their use is even becoming popular in countries with developing economies.
Credit cards are now mostly made up of plastic material. There is usually a photograph and a signature of the credit card holder imprinted on it. The credit card number is the unique source of identification for all transactions. While it is publically identified number, credit card holders are advised to maintain its secrecy. There is also a CVV number printed usually at the back of the card, which should be known only the customer. It is a secret number that is used mostly in online transactions. The credit card also has a secret code embedded in the black-colored section. This section helps various ATMs and credit card machines to read and identify the customer’s account and process the transaction. It remains a secret coded information and enhances the security of the credit card.
Credit cards provide an interest-free period for the customer. The customer can make a purchase at the merchant outlet through the credit card. The merchant outlet which provides this service usually has a credit card machine, where it can swipe the coded information and offer back the card along with the receipt. The customer may also have to sign an additional receipt that remains with the merchant. The amount actually gets credited to the bank account of the merchant automatically since all the information about the purchase has been electronically recorded and transferred to the credit card company’s computer servers.
The merchant also prefers to transact with customers using credit cards because of increased security and reliability. There is also little necessity of handling and managing cash for the merchant. The customer has the advantage of paying the amount to the credit card company after certain period. The customer can also find credit card deals. He can find the credit card deals even at merchant outlets. He can also find credit card deals in credit card statements he receives every month.
The customer can also compare credit cards for the best rate of interest offered. The deals are highly competitive so the customer can also compare credit cards and choose the one that is most attractive. He can compare credit cards for the interest- free period offered since they also vary from one credit card company to another.