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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 often 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 info on a pc chip or magnetic strip as proven under.

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

A bank card is a handy means of borrowing cash because it offers you with a line of credit score which is at all times out there to you once you want it. Bank cards may also help you handle quick time period money stream issues by permitting you to rapidly 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 machine.

Credit score Card Suppliers

The three greatest bank card corporations that make up the worldwide bank card fee community embrace: Mastercard®, Visa and American Categorical®. American Categorical tends to concern its bank cards instantly, whereas Mastercard and Visa typically accomplice with banks and monetary establishments to concern their bank cards.

How do Credit score Playing cards Work?

You often apply for a bank card with a Financial institution, Monetary establishment or instantly with the bank card suppliers resembling Amex. While you apply for a bank card you possibly can nominate your most credit score restrict and this is able to be assessed by the bank card issuer and a most credit score restrict could 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 increased than the quantity allowed for the bank card kind. Bank cards additionally typically have minimal credit score limits, so in case you nominate an quantity decrease the the minimal restrict you’ll be allotted the minimal restrict. This credit score restrict is a line of credit score that you need to use to make purchases in retailer or on-line and even withdraw as money instantly from the ATM.

Curiosity Free Interval:

Bank cards provide curiosity free intervals of often about 55 days (some playing cards provide fewer or extra curiosity free days). Throughout the curiosity free interval, you wouldn’t be charged any curiosity on purchases you make, however in case you fail to payback your bank card stability by the final day of the curiosity free interval you’ll be charged curiosity on the quantity owed.

It is very important observe that interest-free intervals do NOT typically apply to money withdrawals made along with your NZ bank card. While you withdraw money instantly utilizing your bank card, it often begins to incur curiosity on the exact same day. Additionally, money withdrawal typically attracts a better rate of interest than purchases.

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


Some NZ bank cards provide reward factors only for utilizing them. It’s because bank card suppliers resembling Mastercard and Visa cost companies a charge for every bank card transaction you make. Rewards typically come within the type of reward factors schemes wherein you earn reward factors for each greenback you spend. You’ll be able to then use the amassed reward factors for purchases, or in some circumstances, redeem your factors for money.

Bank card suppliers additionally typically provide different advantages resembling free journey insurance coverage, journey lounge entry, buy safety and extra. You could find an inventory of rewards playing cards on our Rewards bank cards web page.

Stability Switch:

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



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