Credit cards are increasingly used instead of cash or cheques to pay for goods and services. When the cardholder is present, e.g. in a shop, the card is swiped and a bill is printed. The cardholder has to sign the bill or key their PIN ( personal identification number ) into a special machine. Purchases by credit card can also be made by mail, over the telephone or on the Internet . Credit cards can be used to get money from a cash dispenser. Cards linked to organizations such as Visa and MasterCard can be used in many countries. People with very good credit ratings , i.e. who earn a good salary and have no debts, may get a gold card with a higher credit limit . Credit card holders receive a monthly statement of all their purchases and must pay part of the bill. They are charged interest on the amount they do not pay.
The term credit card is sometimes used to include charge cards , but the whole amount owed on a charge card account must be paid each month. One of the most famous charge cards is American Express . Some people have an affinity card , a credit card that is linked to a charity. Each time the card is used the card company pays a small amount of money to the charity. Credit cards from shops, called store cards or sometimes charge cards, can be used only in branches of the shop concerned. Debit cards or banker’s cards , such as Maestro , can be used to pay for goods but the whole amount is automatically deducted from the user’s bank account within a few days.
Most Americans have a variety of plastic money , including Visa and MasterCard (often more than one of each), American Express and Diners Club , as well as store cards. People decide which cards to have depending on the way they plan to use them. For example, some cards are free but have a high rate of interest, called the annual percentage rate or APR ; others have an annual fee , but charge lower interest rates, and so are good for people who do not pay the whole bill every month.