Various Functions of a Credit Card

Today, credit cards have many functions and are very versatile. They can be summarized into the following functions:


The holder may obtain extended credit up to an agreed limit at a published interest rate.


The holder can repay the whole amount at the end of the month, without charge provided no cash advance has been taken.


On presentation at the appropriate banks, subject to check, cash can be obtained. In most cases can also be used in ATMs to obtain cash.

Cheque guarantee

A cheque drawn on a bank may be guaranteed up to a published limit provided it is accompanied by a Cheque Guarantee Card (or in some cases a Visa or Mastercard card) issued by the bank on which it is drawn.

Cheque encashment

Cheque guaranteed as above may be used to obtain cash from branches of most banks, although a charge may be levied in certain circumstances.


If the card is a member of Visa International or Mastercard International, you can use your card at many countries where there are a lot banks who are members of them.

Perhaps the most significant fact to emerge from the summary of card functions is that strictly speaking, they are not debit cards. Although they can be used to obtain cash via ATM, the debit will be made from the credit card account and not from the holder’s bank account.

The credit cards discussed above are bank cards. Different bank cards have different card functions. The functions of bank cards really depend on the individual bank itself. Some bank card may have all of the above functions and some may not.

There other credit cards that are issued by retail stores such as Petrol Card, Quasi Card and Private Label Card which may have some of the above functions mentioned above.

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