What is a credit card?
Credit card definition
A credit card is a type of payment card issued by a bank or financial institution that allows users to spend first and pay later within a certain credit limit. This means you can shop, pay bills or withdraw cash without having money available in your account. Then, at each statement period, you will have to repay the amount spent according to the bank's regulations.
One of the biggest benefits of credit cards is the interest-free period of up to 45 - 55 days, allowing users to spend flexibly without incurring interest if paid on time.
Credit cards are commonly used in online transactions, booking airline tickets, booking hotel rooms, shopping at supermarkets, shopping malls or paying electricity, water and internet bills.
What is a credit card?
Credit cards are one of the most popular payment cards in the world, along with debit cards and prepaid cards.
Difference between credit cards and other types of cards:
- Credit Card: Allows spending first, paying later within the granted limit.
- Debit Card: Can only use the actual amount of money in the bank account.
- Prepaid Card: Load money onto the card before use, not linked to a bank account.
What is a credit card?
Credit Card is the English term for credit card. On international websites such as Amazon, eBay, Alibaba, or when registering for services such as Netflix, Spotify, users often see the Credit Card option when paying.
Some popular types of Credit Cards in the world include:
- Visa Credit Card
- Mastercard Credit Card
- American Express (Amex) Credit Card (American Express credit card)
- JCB Credit Card (JCB credit card – popular in Japan)
These cards can be used globally, depending on the issuing bank's network. If you frequently travel or shop internationally, you should choose a Visa/Mastercard international credit card for more convenient payment.

What is the definition of credit card?
Distinguish between credit cards and debit cards
Below is a detailed comparison table between credit card and Debit card:
Criteria | Credit Card | Debit Card |
Source of funds | Bank loan | Money in the account |
Limit | Bank-issued based on income | No limit, spend only within available funds |
Interest rate | Interest if payment is not made on time | No interest |
Withdrawal ability | Cash withdrawal is possible but with high fees | Withdraw money directly from account, low fee |
Endow | Cashback, points, no annual fee | Less perks than credit cards |
Popular types of credit cards today
Based on features & purpose of use, credit cards can be divided into the following types:
Domestic and international credit cards
- Domestic credit cards: Can only be used within the country.
- International credit card: Can be used for global payment, suitable for international travel and online shopping.
Cashback Card
- Partial cashback upon payment, usually from 1% – 5% per transaction.
- For example: Techcombank credit card refunds 1.5% on all spending, VPBank refunds 6% when shopping online.
Reward Card
- Earn points when spending to redeem gifts, shopping vouchers, and air miles.
- For example: Citi Rewards card accumulates points to redeem airline tickets, VIB card accumulates points to redeem Grab e-vouchers.
Travel Card
- Enjoy hotel and airport lounge discounts and earn miles when you use them.
- For example: VIB Travel Elite card offers free travel insurance, VPBank Priority offers free airport lounge service.
Business credit cards
- Support businesses in spending and financial management, often with higher limits.
- For example: Vietcombank Corporate Card helps businesses manage cash flow flexibly.

Popular types of credit cards
Conditions and how to open a credit card
Conditions for opening a credit card
- Individuals aged 18 and over with stable income.
- Minimum income from 4 - 10 million/month (depending on the bank).
- No bad debt on CIC system.
Credit card opening procedure
- ID card/CCCD, household registration book or proof of residence.
- Labor contract & salary statement of the last 3-6 months.
- Or collateral if opening a credit card in the form of a deposit.
Advantages and disadvantages of credit cards
Advantages of credit cards
- Buy now, pay later for financial flexibility.
Interest free up to 45 – 55 days if paid on time.
Many incentives for cashback, points accumulation, installment payment 0%.
Emergency financial support, no cash required.
Disadvantages of credit cards
- High interest if balance is not paid in full on time.
- Easy to overspend, which can lead to bad debt.
- High penalties for late payment or cash withdrawal.
Notes when using credit cards
Pay in full and on time
Credit cards with interest-free periods 45 – 55 days, but if you don't pay on time, you will be charged high interest (20 – 40%/year). Also, if you only pay the minimum amount, the rest will continue to accrue interest, leading to a larger debt. To avoid penalties, set payment reminders or sign up for automatic deductions from your bank account.
Limit cash withdrawals from credit cards
Even though you can withdraw cash from your credit card, you will be charged a Withdrawal fee (3 – 5% withdrawal amount) and the interest will apply immediately, there is no interest-free period like when shopping. So if you need cash, prioritize other solutions such as consumer loans or using a debit card.
Control spending, avoid card abuse
Paying by credit card is convenient, but if you don't control it well, you can spend beyond your means. To avoid this, check your statement regularly, set a monthly spending limit, and sign up for transaction notifications via SMS or your banking app.
Don't open too many credit cards
Many people open multiple cards to take advantage of the perks, but having too many cards can make it difficult to manage your spending and payments. If you miss a payment due date, you could incur late fees and damage your credit score. It's best to only open 1 – 2 suitable credit cards with your needs.
Protect card information to avoid fraud
Credit cards are vulnerable to fraud when shopping online. Therefore, you need to:
- Only enter card information on reputable websites with HTTPS security protocol.
- Do not give your CVV/CVC code to strangers.
- Sign up for two-factor authentication (OTP) for added security.

Some notes when using credit cards
The best credit card banks today
Bank supports easy credit card opening
- Techcombank: Free annual fee, high limit.
- VPBank: Refund up to 6%, fast card approval.
- Vietcombank: Many travel promotions, accumulate points.
- Sacombank: Support low interest installment payment.
Which bank credit card should I open?
- If you like cashback offers → Choose Techcombank, VPBank.
- If you travel often → Choose Vietcombank, VIB Travel Elite.
- If you want to pay in installments 0% → Choose Sacombank, HSBC.
Reading up to here, you must have understood everything about it. What is a credit card?? This is a convenient financial tool, helping you spend flexibly and enjoy attractive incentives. However, if you do not control it well, you may fall into bad debt due to high interest rates. Therefore, choose the right bank, use it wisely and always pay on time to maximize the benefits that credit cards bring. Follow LiveTrade Pro to keep updated with useful news!