A credit card can be used by the cardholder to pay for something or to withdraw cash using a line of credit that has been made available by the credit card issuer. The cardholder is then required to pay back the amount that has been borrowed in accordance with the terms and conditions of the credit card agreement. With most types of credit card you can settle the amount owing in full and without interest (on purchases) within a given period of time, or pay off a portion of the outstanding amount and carry the remaining balance forward with interest.

However, some credit card companies offer a basic, no frills credit card that has a no interest-free period but provides a means by which you can borrow up to a given credit limit. These cards usually have a lower APR than would otherwise apply but immediately begin charging interest on purchases and other transaction types.

Credit cards tend to fall into the following broad groups:

• Standard Cards
  Any credit card that isn't a gold, platinum or black card (i.e. a premium card) is likely to be a standard card. Standard cards are available to anyone over 18, subject to the application being accepted.
• Premium Cards (Gold, Platinum and Black Cards)
  Premium cards usually offer higher credit limits and have lower interest rates. Many also have extra benefits such as travel insurance, product guarantees and preferential loan rates. Credit card companies offer premium cards to people they consider to be a better credit risk. They are often available to people who have a specified minimum income level which can be quite high. The more exclusive cards tend to have annual fees.
• Charity/Affinity Cards
  Some credit cards are issued on behalf of charities and other organisations such as football clubs and universities. For this type of card the credit card company will generally make a donation to the charity or affinity group when the card is issued and/or each time that the card is subsequently used — at no additional cost to you.