Bank credit cards refer to a type of payment card issued by a financial institution, typically a bank or credit union, that enables the cardholder to make purchases on credit. These cards are linked to the user's bank account and allow for convenient and secure cashless transactions.
Bank credit cards are issued to customers after a thorough evaluation of their creditworthiness, which involves assessing factors such as income, credit score, and previous repayment behavior. The cardholder has a predetermined credit limit, which represents the maximum amount that can be borrowed from the issuing bank. This limit can vary based on the individual's financial history and the issuer's policies.
One of the key features of bank credit cards is the ability to make purchases and pay the bill at a later date. Cardholders have a specific grace period, typically around 25-30 days, during which no interest is charged on the amount spent. However, if the outstanding amount is not paid in full by the due date, interest charges are applied on the remaining balance.
Bank credit cards often come with additional benefits and rewards programs such as cashback, travel rewards, or loyalty points. These rewards can be earned when the card is used for eligible purchases and can be redeemed for various perks or discounts.
Overall, bank credit cards offer consumers a convenient and flexible method of payment, allowing them to make purchases with borrowed funds and pay for them over time.
