Credit cards first came into being in the United States. They were used by regular customers using services at oil companies and hotels. These agencies offered the cards to customers so that they can make purchases and make payments later. Although this trend did not pick up very quickly, yet it became very popular during the Second World War. In the second part of the twentieth century, when capitalistic economies spread across North America and Europe, credit cards also came under high demand. Following this, international credit card companies such as Visa and MasterCard entered the global market.
They collaborated with local banks and financial institutions and started providing the services to customers. Financial institutions also collaborated with other service providers such as airline companies, retail merchants and insurance providers and started providing integrated services to attract more and more customers. Earlier, only premium customers were categorized for provision of credit cards, but now even middle class people are given opportunities to make use of the advantages of credit cards.
Since credit card is actually a short-term credit offered to individual customers based upon their spending habit and income level, the credit card issuing company organizes some assessment of the credit card customer before offering him the credit card. If the credit card company is satisfied with the financial and spending performance of the customer, the credit card is extended. However, there are different categories of credit cards and depending upon the income level of the customer, the type of credit card is offered to him. Credit card provides mainly two types of services. In the first type of service, the credit card customer can make purchases using the credit card. The purchases have to be made only at authorized merchant outlets.
There are usually sign boards that provide information on this at the outlets. These outlets have credit card machines that allow them to accept the payment through the card. These days, the credit card machines are electronic and hence, ensure high security and reliable transactions. The other type of service offered by the credit card is the cash withdrawal from the ATMs.
Credit card holders can withdraw a certain amount of cash from the ATMs as credit. However, the cash amount is subjected to immediate interest unlike merchant-based transactions. The merchant-based transactions made for purchasing items provides the biggest benefit for the customer to make the repayment to the credit card company, on behalf of the merchant outlet, after a certain period of time, which is interest-free.
One can also find credit card deals as part of the merchant transactions. One can find credit card deals in discounts on certain selected products. One can also find credit card deals in air tickets and other services. Since credit card business is highly competitive, one can compare credit cards for the best offers. If customers compare credit cards, they can find many discounts and offers coming from credit card companies from time to time. They can also compare credit cards for credit limits and the interest free period.