Credit cards are issued by commercial banks to individuals and organizations. They can be used to shop and consume with special organizations and deposit and withdraw cash from banks. They are special carrier cards with consumer credit. They are in the form of a card with the card issuing number printed on the front. Cards with bank name, validity period, number, cardholder name, etc., and a magnetic stripe and signature strip on the back. Credit cards are divided into two types: credit cards and quasi-credit cards based on whether a reserve fund is deposited with the card-issuing bank. A credit card is a certain credit limit given by the card-issuing bank to the cardholder. The cardholder can spend within the credit limit first and then Credit card repayment. A quasi-credit card is a credit card that requires a certain amount of reserve deposit to be deposited first as required by the card-issuing bank. What we call credit cards now generally refers to credit cards only.

The most popular way to put it is: when your shopping needs exceed your ability to pay, you can borrow money from the bank. A credit card is a certificate that the bank agrees to lend you money based on your integrity. The credit card will tell you how much you can borrow from the bank and when you will pay it back. The credit card will also record your personal information and consumption details in order to provide you with comprehensive financial services.

It is said that one day, American businessman Frank McNamara was entertaining guests for a meal in a New York hotel. After the meal, he found that he had forgotten his wallet with him. He was deeply embarrassed and had to call his wife to bring it with him. Pay cash at the hotel. So McNamara came up with the idea of ??starting a credit card company. In the spring of 1950, McNamara and his friend Schneider invested US$10,000 to establish the "Diners Club" in New York, the predecessor of Diners Club. Diners Club provides members with a card that can prove their identity and payment ability. Members can use the card to record their purchases. This kind of credit card that does not require bank processing is still a commercial credit card.

From the perspective of supply and demand:

(1) Cardholders can obtain goods and services without paying cash, which eliminates the inconvenience and risk of carrying large amounts of cash and is more convenient for consumers. Consumers are out shopping, traveling for business and traveling.

(2) Banks can use this as a means to win deposits from merchants and credit card customers, and charge a certain percentage of commission based on the total amount of advance payments.

(3) Credit cards closely connect card-issuing banks, cardholders, special merchants, and agency banks, forming a recurring chain of creditor-debt relationships, and the establishment and development of this relationship are both Depends on the credit extended to each other.

(4) It facilitates consumers’ shopping and consumption, stimulates large purchases and impulse purchases, and increases merchants’ sales. By using bank cards for consumption, consumers can avoid carrying large amounts of cash with them. Moreover, since there is no concept of physical cash payment during the settlement process of bank card consumption, consumers are often prone to impulsive shopping desires and random shopping consumption. Statistics also show that the average consumption amount of bank card transactions is higher than the average consumption amount of cash transactions, which greatly increases merchants' sales volume and sales.

(5) It is safer and hygienic than collecting cash, and it also reduces the cash counting link from customer → cashier → merchant accountant → bank. Merchants often need to identify counterfeit banknotes during the process of collecting cash. They also need to count and keep the banknotes after collection. At the end of the day, they also need to escort the cash to the bank. During this period, safety is always a problem that merchants need to face. By accepting bank cards, these security risks caused by cash are avoided. At the same time, as we all know, cash is inevitably contaminated with various bacteria and viruses during the circulation process, posing a threat to the health of consumers and cashiers. Accepting bank cards can effectively reduce the chances of the spread of bacteria and viruses and create Create a safe and hygienic consumption environment.

(6) Improved transaction processing speed and accelerated the efficiency of merchants’ fund use. When merchants accept bank cards, they not only have faster transactions during consumption settlement, but also have timely entry of funds into their accounts and clear accounts, which facilitates merchants' allocation of funds and improves the efficiency of merchants' use of funds.

(7) Attract more consumers.

Since many consumers are accustomed to using bank cards for consumption, merchants accepting bank card transactions can provide consumers with more convenience and choices, attract more new consumer groups, and enhance the merchant's image. If a merchant opens the business of accepting international cards, it can also accept international cards from international card organizations such as VISA and MasterCard, thus attracting more overseas tourists. Currently, there are various non-traditional transaction channels, such as telephone, mobile phone, fax, Internet and other shopping methods, allowing more consumers to enjoy the diverse services of merchants without leaving home.

(8) Help merchants establish an advantageous position in market competition. By accepting bank cards, merchants can collect relevant consumer data. Through data analysis and research, they can formulate targeted customer service plans, carry out various forms of promotional activities, and form alliances with companies in other industries for joint marketing. etc., allowing merchants to establish and strengthen their advantageous position in the fierce market competition and establish a good corporate image.

The advantages of credit cards over other payment methods:

(1) Cash is heavier and more complex than credit cards in terms of area, weight and amount;

(2) Cash is easy to be stolen and difficult to recover;

(3) Defects of the check itself. First, check books are not easy to carry, and second, checks are difficult to use across regions. This is mainly to prevent the risk of bad checks. Check guarantee services can only partially prevent the risk of bad checks, and the guarantee fee is high, generally 1%-2.2%. The issuer with a high degree of risk may even need to pay a guarantee fee of up to 5%;

( 4) The use of credit cards has promoted the development of ordering methods such as mail ordering, telephone shopping and online shopping. Before credit cards, people had to get a list of goods, fill out an order form, and mail it out with a check, which was extremely time-consuming. Using a credit card can greatly save transaction time and improve transaction efficiency.

In our country, the development of the credit card market is slow

Firstly, because our country’s credit system has not been established;

Secondly, due to national transaction habits, private cash flow is too large , have no habit of using credit cards;

Third, national consumption habits tend to be conservative, and advanced consumption and financial management concepts have not yet become popular.