How Exactly Does A Credit Card Work?

We answer precisely this question in this post. It’s hard to believe, but credit cards have been around for more than 100 years. They originally come from the USA, where they are both a common and popular means of 신용카드현금화.

Credit cards are also widespread in this country, but they are only just emerging, and many people are still a bit suspicious because of their ignorance. Many older consumers in particular hardly dare to ask: How does a credit card work? The following post answers this in an easily understandable way and describes everything you need to know about credit cards in a nutshell.


How a credit card works is a bit complicated, so we decided to explain the process in an easy-to-understand way:

  1. The cardholder buys goods from a dealer using a 신용카드현금화. He usually confirms the payment with a signature or PIN.
  2. The merchant forwards the payment order to the merchant bank that handles the credit cards.
  3. The merchant bank handling credit cards requests the invoice amount from the customer’s credit card issuing bank.
  4. Possibly the merchant bank transfers license fees to the actual credit card issuer. (e.g., Visa or MasterCard)

  1. The dealer bank that handles credit cards transfers the invoice amount to the dealer, who turns it to his house bank.
  2. The credit card issuing bank deducts the amount from the credit card owner’s credit limit.
  3. The credit card issuing bank bills the customer every month

Of course, all of these processes are fully automatic and cashless, i.e., normally via cashless payment transactions. The credit card issuing bank puts the amount paid on the credit card bill for the card owner and transfers license fees to the credit card issuer if necessary.

The total amount is posted to the credit card account as a short-term credit and debits the credit limit. The credit card account is balanced monthly by the current account linked to the card. The cardholder only receives an invoice at the very end, which he then has to pay. He doesn’t notice any steps 2 to 6; he jumps directly from step 1 to the last step 7.

Final Words

Credit cards, like cash or checks, are among the means of payment. The credit card company itself does not enter into any payment obligation towards the seller. This payment obligation is therefore borne solely by the credit card owner. The prerequisite for payment by credit card is that the seller accepts the credit card.