Credit Card Payments

Credit card payment can be used to pay trade debts. Credit cards are often used to increase direct sales to end users.  Direct sales to end users are often attractive to companies.  For example, if a manufacturer is able to bypass intermediaries, the manufacturer can often earn much higher profits in direct sales to consumers.  Several types of credit cards are now available, including:

• Procurement cards.  These are credit cards used by purchasing agents.  They typically are used to purchase small dollar value products when the buyer considers it more costly to handle the purchase through the traditional process involving issuing a purchase order.Traditional revolving credit cards that circulate balances monthly, requiring only a minimum payment to keep the account current.
• Debit cards that deduct payments directly from a specified checking or savings account.
• Infinity cards function like traditional credit cards, but offer a rebate or benefit to the cardholder or the issuing organization, based on usage. Cards that offer frequent flyer miles, purchase rebates and discounts, and other perks, are examples of infinity cards. 

From the purchaser's perspective, one of the advantages of using a credit card is that the purchaser does not have to pay for the goods or services immediately.  Another advantage is that when the credit card payment comes due, the card holder often has the option of paying the entire account balance due in full, or opting to make a partial payment.  Another advantage is that if the goods delivered are defective or substandard, the credit card holder can notify the credit card issuer that it disputes the charge.  Until the matter is resolved, the card issuer will not make payment to the seller.

Edited by Michael C. Dennis.