credit card

noun

Definition of credit card 

: a card authorizing purchases on credit

Examples of credit card in a Sentence

Recent Examples on the Web

July 2 that someone had used their information to obtain credit cards, and then changed the mailing address on the cards. Pioneer Press, chicagotribune.com, "Police blotter: Five cars entered in one night in Western Springs," 12 July 2018 Cash, credit cards, iPods and a watch were among items stolen from seven vehicles. Washington Post, "Crime reports for Anne Arundel and Howard counties and for Annapolis," 12 July 2018 The family car was gone — along with television sets, jewelry, credit cards, all of the family's keys and other assorted items. Matt Tunseth, Anchorage Daily News, "‘Life is completely not normal’: Chugiak family’s life turned upside down by burglary," 12 July 2018 Lines of credit include the following: credit cards, student loans, automobile loans or any other types of loans. Dottie Herman, Time, "Everything You Need to Know About Buying Your First Home," 3 July 2018 Jatavia Johnson recently turned herself in to authorities to finish a sentence for fraudulent credit card charges. Michael Saponara, Billboard, "Decoding All of Drake's References on 'In My Feelings'," 13 July 2018 Trump Effect Financial disclosure records show Trump’s Supreme Court nominee had $45,000 to $150,000 in credit card debt in 2016, which was later paid off. NBC News, "Kavanaugh ran up credit card debt buying Washington Nationals season tickets," 12 July 2018 The creation of the task force comes as the Trump administration is moving to overhaul the CFPB, an agency formed after financial crisis to better protect people from predatory mortgage lending and abusive credit card contracts. Bloomberg, Fortune, "Trump's New Task Force Will Take On Crypto Crime," 11 July 2018 Small businesses in particular, with little negotiating power against credit card companies, could reap huge savings on processing fees. Michael Taylor, San Antonio Express-News, "Re-envisioning basic banking," 6 July 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'credit card.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of credit card

1888, in the meaning defined above

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Last Updated

18 Sep 2018

Look-up Popularity

Time Traveler for credit card

The first known use of credit card was in 1888

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More Definitions for credit card

credit card

noun

Financial Definition of credit card

What It Is

A credit card is a plastic card issued by a financial institution that allows its user to borrow pre-approved funds at the point of sale in order to complete a purchase.

How It Works

Credit cards have a maximum amount -- or credit limit -- the user can borrow during a given period. The credit limit is pre-determined by the card issuer based on the cardholder's credit rating and credit history.

When an individual uses a credit card to make a purchase, he or she is authorizing the credit card issuer to pay the merchant on their behalf. Merchants are required by law to verify that the individual using the card is its rightful owner by obtaining proper identification via a Personal Identification Number (PIN), and/or a driver's license or state-issued ID card.

Merchants generally prefer payment by credit card because they are immediately paid by the card issuer – despite the fee the merchant must pay to the card processing company for each transaction.

[InvestingAnswers Feature: Credit or Debit? Your Choice Could Cost You 3%]

Credit card issuers require the cardholder to pay his or her balance in full, usually on a monthly basis. If the user does not pay the balance in full, the issuer adds interest to the balance, and this interest compounds for as long as the balance is outstanding.

As with credit limits, the cardholder's credit rating and credit history can influence the interest rate on the card. In some cases, the issuer can raise the interest rate. There is no federal limit on the interest rates credit card issuers can charge, although many states impose different caps. Many card issuers offer "teaser rates" that start out very low and increase over time.

[InvestingAnswers Feature: How to Choose the Best Credit Card Offers]

Issuers use several methods to calculate interest, and it is important for the cardholder to read and understand the issuer's disclosure statement in order to avoid unpleasant surprises. Many credit cards also charge an annual fee, late payment fees, fees for going over the credit limit, cash-advance fees and foreign-currency conversion fees.

Why It Matters

Credit card interest rates are higher than personal loans or lines of credit. Many credit cardholders underestimate the time and money it takes to pay off outstanding balances -- especially when interest rates are high and minimum payments are low.

[InvestingAnswers Feature: Avoiding the Six Most Common "Black Holes" in your Family Budget]

It is important that cardholders not only use credit cards in moderation, but also take preventative action against identity thieves in order to protect their privacy and identity.

Credit cards allow cardholders to avoid carrying cash, earn frequent-flier miles, or accumulate other "rewards" that can be used almost anywhere around the world. With many credit card types, the cardholder can also get cash advances through ATMs.

Source: Investing Answers

credit card

noun

English Language Learners Definition of credit card

: a small plastic card that is used to buy things that you agree to pay for later

credit card

noun

Kids Definition of credit card

: a card with which a person can buy things and pay for them later

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