Payment cards

Payment card is part of a payment system that enables its owner (the cardholder) to make a payment by electronic funds transfer. The most common types of payment cards are credit cards and debit cards. Payment cards are usually embossed plastic cards, 85.60 × 53.98 mm in size, which comply with the ISO/IEC 7810 ID-1 standard. They usually also have an embossed card number conforming with the ISO/IEC 7812 numbering standard.

Most commonly, a payment card is electronically linked to an account or accounts belonging to the cardholder. These accounts may be deposit accounts or loan or credit accounts, and the card is a means of authenticating the cardholder. However, stored-value cards are cards that store money on the card itself.

Payment cards can be distinguished on the basis of the features of each type of card, including:

The issuer of a credit card creates a line of credit (usually called a credit limit) for the cardholder on which the cardholder can draw (i.e. borrow), either for payment to a merchant for a purchase or as a cash advance to the cardholder. Most credit cards are issued by or through local banks or credit unions, but some non-bank financial institutions also offer cards directly to the public.

The cardholder can choose either to repay the full outstanding balance by the payment due date or to repay a smaller amount, not less than the "minimum amount", by that date. In the former case, interest is typically not charged; while in the latter case, the cardholder will be charged with interest. The rate of interest and method of calculating the charge vary between credit cards, even for different types of card issued by the same company. Many credit cards can also be used to take cash advances through ATMs, which also attract interest charges, usually calculated from the date of cash withdrawal. Some merchants charge a fee for purchases by credit card, as they will be charged a fee by the card issuer.

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