MasterCard is the official name of MasterCard Incorporation, an American multinational financial services corporation. It is the second-largest electronic payment card company in the United States. MasterCard electronic cards appear in two forms: a debit card and a credit card.
The debit card is also known as a check card, and it works through a “pay now” system. This allows its holders to access existing cash funds in their checking account electronically rather than paying with a check or cash. On the other hand, a credit card works through a “pay later” system, where cardholders buy goods on a line of credit - a type of loan that banks and other financial institutions issue for cardholders to repay to the issuing bank in monthly installments.
Approximately 25,000 banks and different financial institutions jointly operate MasterCard. MasterCard does not issue credits to its cardholders but its member banks, which they do under their names. Therefore, MasterCard has no involvement in determining the interest rates or setting annual fees relating to the card.