A credit card refers to a credit note issued by a bank or financial company of a certain size, which can be used to purchase goods or services from a specific merchant, or to withdraw a certain amount of money from a specific bank.

The size of a credit card is similar to a business card. The name of the credit card and the cardholder, card number, issue date, expiry date, each payment limit, card issuer and other information are printed on the front of the card. The cardholder's name is printed on the back. Reserve signatures, magnetic strips, and a brief statement from the card issuer, etc.

Credit cards originated in the United States. As early as 1915, some restaurants and department stores in the United States began to issue credit cards in order to promote products and expand business. By the 1960s, credit cards were widely used and became popular in the United Kingdom, Canada, Japan, and Western European countries. The scope of use also broadened, ranging from buying houses and land, traveling and shopping, to public telephones, buses, and automobiles. , credit cards are accepted. Since the Bank of China introduced credit cards, a new payment method, into the country in 1981, other banks have followed suit.

The credit card usage process is as follows:

The cardholder uses the card to shop or consume and signs the purchase form.

Merchants provide goods or services to cardholders.

The merchant submits the purchase order to the card issuer.

The card issuer pays the merchant.

The card issuer issues a payment notification to the cardholder.

The cardholder repays the loan to the card issuer.

Using credit cards as a payment method is efficient and convenient. It can reduce the amount of cash in circulation, simplify the collection procedures, and can be used to deposit and withdraw cash, which is very flexible and convenient. However, credit cards also have some disadvantages:

Higher transaction fees.

Credit cards have a certain validity period and will become invalid upon expiration.

It may be lost and cause risk and trouble to the cardholder.

Bills and credit cards are closed payments. Generally speaking, open payment is more convenient because the payment instrument does not need to be re-confirmed by the issuing entity; while closed payment is obviously not as good as open payment in this regard, because re-issuance increases the cost of the payment instrument itself. In this way, instruments such as endorsement and transfer can be used to increase their liquidity. However, due to technical limitations, traditional open payment has great risks and inconveniences. It is this trade-off that made payment methods such as bills and credit cards frequently used in large-value transactions before the emergence of electronic payments.