What’s a Credit score Card?

What’s a bank card and the way does it work

A bank card is an unsecured mortgage facility which is generally issued within the type of a small plastic card that may simply slot in a pockets and contains the bank card particulars, such because the bank card quantity and card identify, and different encoded data on a pc chip or magnetic strip as proven beneath.

Credit Card example
Caption: Instance of a plastic bank card from Westpac New Zealand

A bank card is a handy method of borrowing cash because it supplies you with a line of credit score which is all the time obtainable to you whenever you want it. Bank cards may help you handle quick time period money move issues by permitting you to shortly and simply borrow cash for brief time period use. Digital variations of bank cards additionally exist that may be loaded onto a smartphone or onto a multi-card gadget.

Credit score Card Suppliers

The three largest bank card firms that make up the worldwide bank card cost community embrace: Mastercard®, Visa and American Categorical®. American Categorical tends to difficulty its bank cards straight, whereas Mastercard and Visa usually associate with banks and monetary establishments to difficulty their bank cards.

How do Credit score Playing cards Work?

You normally apply for a bank card with a Financial institution, Monetary establishment or straight with the bank card suppliers akin to Amex. If you apply for a bank card you’ll be able to nominate your most credit score restrict and this is able to be assessed by the bank card issuer and a most credit score restrict can be assigned to your bank card.

In some circumstances, the bank card supplier might assign a credit score restrict decrease than the quantity you could have nominated, particularly if the quantity you nominated is greater than the quantity allowed for the bank card sort. Bank cards additionally usually have minimal credit score limits, so for those who nominate an quantity decrease the the minimal restrict you’d be allotted the minimal restrict. This credit score restrict is a line of credit score that you should use to make purchases in retailer or on-line and even withdraw as money straight from the ATM.

Curiosity Free Interval:

Bank cards supply curiosity free intervals of normally about 55 days (some playing cards supply fewer or extra curiosity free days). Through the curiosity free interval, you wouldn’t be charged any curiosity on purchases you make, however for those who fail to payback your bank card stability by the final day of the curiosity free interval you’d be charged curiosity on the quantity owed.

You will need to notice that interest-free intervals do NOT usually apply to money withdrawals made along with your NZ bank card. If you withdraw money straight utilizing your bank card, it normally begins to incur curiosity on the exact same day. Additionally, money withdrawal usually attracts the next rate of interest than purchases.

Notice: some curiosity free bank cards do supply curiosity free intervals of about 6 to 12 months, however this isn’t widespread and solely applies to particular no curiosity bank cards.


Some NZ bank cards supply reward factors only for utilizing them. It’s because bank card suppliers akin to Mastercard and Visa cost companies a payment for every bank card transaction you make. Rewards usually come within the type of reward factors schemes wherein you earn reward factors for each greenback you spend. You possibly can then use the gathered reward factors for purchases, or in some circumstances, redeem your factors for money.

Bank card suppliers additionally generally supply different advantages akin to free journey insurance coverage, journey lounge entry, buy safety and extra. Yow will discover an inventory of rewards playing cards on our Rewards bank cards web page.

Steadiness Switch:

Some bank cards supply stability transfers, which let you switch your current bank card debt from one other card and repay at a decrease fee of usually 0% for fastened interval.

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