Cards became an integral part of a banking system as it allows easy transactions. Cards can be broadly classified into four types, i.e., debit cards, credit cards, prepaid cards, and electronic cards.
A credit card is basically a type of card that allows you to borrow money from financial institutions such as banks. In simple words, it allows you to take the same loans from the financial institutions quickly which you have to repay within the billing cycle that is usually within 50 days.
As society is becoming more consumption-driven, consumers’ dependence on credit has increased manifold. Credit essentially is a financial borrowing from a lender with a promise to pay back the amount in the agreed duration. A lender aims to profit by extending credit to the consumer at an interest rate, depending on how risky the credit would be. The ability of a consumer to repay the credit/loan is gauged through a “credit score”.
