What is a Credit Card ?

Credit card is a plastic card that is issued by the bank allowing a consumer to purchase products and services from any merchant on credit. The consumer is provided with a credit limit that can be used for this purpose; the approved credit amount is either settled fully at the end of a specified time period or settled in parts and the balance amount is considered as extended credit. The bank charges an interest from the holder along with an annual fee (however, at present many banks are waiving off this amount to stay in the competition) according to the terms in the card agreement.

How did credit cards originate ?
Credit card usage began in the early 20th century in the United States of America. Hotel chains and oil companies were the first to issue these cards to consumers allowing them to make purchases. This usage increased greatly after the Second World War. 
The first credit card that could be used in a variety of stores and businesses, called the universal credit card, was launched by Diner Club, Inc. in the year 1950. The company charged the customers an annual fee and billed them on a monthly or yearly basis. The second major universal card “Don’t leave home without it” was started by American Express in 1958.
The bank credit card system was introduced after these. According to this plan, the bank paid the retailer after they received the sales slips, collected all the slips and sent a bill to the card holder at the end of the month or the billing period. The customer then paid back the money to the bank either at one shot or in monthly installments with an interest (which is also called carrying charges).

BankAmericard was the first national bank plan that was started in the year 1959 by the Bank of America in the state of California. In the year 1966, this system was given a license in other states and was eventually renamed to Visa in 1976. After this other major credit cards were introduced, including MasterCard that was earlier known as Master Charge. Many smaller banks which initially offered credit cards on a local or regional basis then came forward in order to expand their services like providing meals and lodging; they joined hands with national and International banks to service the customers.

How to use the credit card most effectively ?
Before taking a credit card from a bank, it is necessary to think how it can be used to derive the maximum benefit.
• For those, who would always like to make their monthly payments in full and is not really bothered about features like ‘frequent flyer miles program’, should opt for a card that has no annual fee and a longer grace period.
• For those customers who at times carry over a balance from one month to another should apply for a card that has a low interest rate that is commonly known as an annual percentage rate or APR.
• There are some users who might want to use their card for services like cash advances. It is advisable that such consumers opt for plans that have a low interest rate or APR as well as low fees on cash advances. There are a few credit card plans which charge very high APRs for cash advances

What are the credit card networks ?
The credit card networks that are available today are as follows 
• VISA
• MasterCard
• American Express
• Diners Club
• Bankcard
• JCB
• Discover
• China UnionPay