The global economy has witnessed the emergence of credit cards as a very useful service to businesses, merchants as well as individuals. The legacy of credit cards that we use today goes back to the nineteenth century when the term was first mentioned by Edward Bellamy. Bellamy described a concept to use cards for making purchases in his novel ‘Looking Backward’ which was published in 1888.

Rightly called as revolving credit, the working of a credit card takes place in a cyclical pattern. A revolving account is created by the card issuer for the consumer along with grant which provides a line of credit so that the user can borrow money from the bank and pay it wherever needed.In one complete credit card transaction, a set of steps is involved which are executed serially.

‘Grace Period’ is a concept in the credit card payment system during which the customer can pay the credit card bill amount without the interest. It can be defined as the period starting at the end of a particular payment cycle up to the due date of the bill payment. The Credit CARD Act of 2009 states that the minimum number of days in the grace period for a credit card should be 21.