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Today, credit cards have many functions and are very versatile. They can be summarized in the following functions:
Credit
The holder can avail extended credit at the published rate of interest up to an agreed limit.
charge
The holder can repay the entire amount at the end of the month without any charges, provided no cash advance is availed.
cash
Cash against check can be obtained on presentation at appropriate banks. Can also be used at ATMs to obtain cash in most cases.
check guarantee
A check drawn on a bank may be guaranteed up to a published limit, provided it is accompanied by a check guarantee card (or in some cases a Visa or Mastercard card) issued by the bank on which it is drawn.
Check Encashment
The above guaranteed checks can be used to obtain cash from most bank branches, although fees may apply in certain circumstances.
international
If the card is a member of Visa International or Mastercard International, you can use your card in many countries where there are a number of banks that are members.
Perhaps the most important fact to emerge from this summary of card functions is that, strictly speaking, they are not debit cards. Although they can be used to obtain cash through ATMs, debits will be made to the credit card account and not the holder’s bank account.
The credit cards discussed above are bank cards. Different bank cards have different card functions. The functions of a bank card really depend on the individual bank itself. Some bank cards may have all the above functions and some may not.
Other credit cards issued by retail stores such as petrol cards, quasi cards and private label cards may have some of the above functions.
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