How do credit card statements work

Credit card billing

The Credit card billing is a Type of bank statementbecause it includes all salesgenerated with the respective credit card by the credit card holder.

When the billing takes place and via which Period it extends, depends on the type of billing. The type of billing also determines which amount has to be returned or settled by the credit card holder and when. Today will be the following four types of billing differentiated:

  • Debit card
  • Charge card
  • Credit card
  • Prepaid card

Debit card

The "Debit Card" billing variant basically works like billing with an EC card. Because the dispositions of the credit card holder are not "collected", but immediately debited from the current account. Therefore, this form of billing is used relatively rarely.

Charge card

The charge card billing method is still the most frequently used form. Card transactions that have taken place in the course of a billing period, usually monthly, are collected here. The total amount will then be debited from the cardholder's current account. As a result, the charge card automatically has a credit function of up to four weeks (depending on the time of disposal).

Credit card

The credit card is also known as the “real” credit card. Even with this type of billing, a monthly bill is created, but there is no automatic debit to the account. Instead, the cardholder can dispose of it until the granted limit is reached. Only then does he have to reduce part of the balance.

Prepaid card

With the prepaid card (see prepaid credit card), the debit is usually made within a few days, as is the case with the debit card. In addition, with the prepaid card, there is only credit available.

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The article "Credit Card Settlement" is in the category: Credit Cards