Cardholder

A credit card is a payment card issued to users (cardholders) to enable them to pay a merchant for goods and services based on the cardholder’s accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the other agreed charges). The card issuer (usually a bank or credit union) creates a revolving account. It grants a line of credit to the cardholder, from which the cardholder can borrow money for payment to a merchant or as a cash advance. There are two credit card groups: consumer credit cards and business credit cards. Most cards are plastic, but some are metal cards (stainless steel, gold, palladium, titanium), and a few gemstone-encrusted metal cards.

A regular credit card differs from a charge card, which requires the balance to be repaid in full each month or at the end of each statement cycle. In contrast, credit cards allow consumers to build a continuing debt balance, subject to interest charges. A credit card also differs from a charge card in that a credit card typically involves a third-party entity that pays the seller and is reimbursed by the buyer. In contrast, a charge card simply defers payment by the buyer until later.

A credit card also differs from a debit card, which can be used as currency by the card owner. Alternatives to credit cards include debit cards, mobile payments, digital wallets, cryptocurrencies, pay-by-hand, bank transfers, and buy now, pay later. As of June 2018, there were 7.753 billion credit cards worldwide. In 2020, there were 1.09 billion credit cards in circulation in the U.S, and 72.5% of adults (187.3 million) in the country had at least one credit card