1. Shopping and consumption function: Shopping and consumption is the most basic function of a credit card. Cardholders do not need to use it when shopping, consuming or enjoying specific services at commercial institutions or outlets that accept credit cards. For instant cash payment, as long as you present your credit card for accounting transaction processing, you can obtain a credit loan from the card-issuing bank for your consumption, and the payment will be settled by bank transfer. In essence, the overdraft consumption function of a credit card is a kind of consumer credit provided by banks to cardholders.
2. Installment payment function: Credit card installment payment means that when the cardholder uses a credit card to make large purchases, the bank first pays the cardholder's consumption account to the merchant in one go, and then pays the cardholder's consumption account according to the cardholder's payment. When people apply, consumption accounts will be deducted in installments, and then cardholders will repay the money in installments to the bank. Most credit cards in my country have installment payment services.
3. Overdraft cash withdrawal function The overdraft cash withdrawal function was established to meet the emergency cash needs of cardholders. Therefore, the credit card cash withdrawal fees set up by each card issuer are extremely high, even if the funds stored in the card are withdrawn, A handling fee of 1%-3% is required. If it is an overdraft withdrawal, the fee will be 0.05% per day until the repayment date, with monthly compound interest.
4. Pre-authorization function Credit card pre-authorization means that a credit card merchant needs to freeze a part of the funds as a commitment for future payment before the cardholder makes a purchase. It can be canceled after the cardholder completes the purchase at the merchant. Frozen funds. It is a form of advance payment, which is what we often call "deposit".
5. Exchange settlement function In order to facilitate cardholders’ shopping and consumption abroad, credit cards also have an exchange settlement function. When cardholders are traveling or on business overseas, they can swipe their cards at specially appointed merchants as they do within the country, and can withdraw local currency at overseas ATMs.
6. Microcredit function The amount of credit card microcredit is generally less than 100,000 yuan. The borrower does not need to provide any collateral or third-party guarantee, and only uses personal credit as a guarantee for repayment. Microfinance is simple to operate, fast in receiving funds, there are no restrictions on the use of funds, and the interest rate is lower than overdraft withdrawals.