VISA

Definition

A VISA is a type of credit card issued by financial institutions offering a line of credit to consumers and businesses for purchasing goods and services. It assists in managing cash flows and maintaining working capital by providing short-term financing options.

5 Must Know Facts For Your Next Test

1. VISA cards allow businesses to delay payment, thereby improving their cash flow management.
2. The interest rate on VISA balances can impact the cost of borrowing and overall financial planning.
3. Using a VISA card can help businesses build credit history, which is essential for future financing needs.
4. VISA transactions are often subject to fees, such as annual fees or transaction fees, which need to be accounted for in financial planning.
5. Effective use of a VISA card involves understanding its terms and conditions, including repayment schedules and penalties.

Review Questions

• How does using a VISA card improve a business's cash flow management?
• What are some potential costs associated with using a VISA card that must be considered in financial planning?
• Why is it important for businesses to build credit history using tools like a VISA card?

Related terms

Credit Limit: The maximum amount that can be borrowed using the credit card.

Interest Rate: The percentage charged on the outstanding balance of the credit card.

Repayment Schedule: The timeline set for paying back borrowed amounts under specific terms.