Credit Card

A credit card is part of a system of payments named after the small plastic card issued to users of the system. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a shopkeeper or anywhere required. Credit cards allow the consumers to 'revolve' their balance, at the cost of having interest charged. It is very safe to use a credit card as the user loses the tension of carrying large sums of cash with him. These cards are now used instead of cash. They are now being accepted everywhere. The banks charge a small annual fee from their customers. The average interest on these cards is 33% to 35%.

Grace period

A credit card's grace period is the time the customer has to pay the balance before interest is charged to the balance. Grace periods vary, but usually range from 20 to 30 days depending on the type of credit card and the issuing bank. Some policies allow for reinstatement after certain conditions are met.