When you're approved for a credit card account, you are given a plastic card and a credit limit. When you spend using that card, the bank/card issuer convinces you that they lent money for you to spend. But that's not the truth! Banks are not allowed to lend money from their assets nor their depositors' assets. It's also completely illegal to lend credit.
“A national bank has no power to lend its credit to any person or corporation…” Bowen v. Needles Nat. Bank, 76 F. 176 (1896), certiorari denied in 20 S.Ct 1024, 176 US 682, 44 LED 637.
Including other famous cases like: First National Bank of Charlotte v. National Exchange Bank of Baltimore, 92 US 122, 128 (1875); and California Bank v. Kennedy, 167 U.S. 362 (1897); and Concord First National Bank v. Hawkins, 174 U.S. 364 (1899) The National Bank Act of 1864 and National Banking Act of 1933 lets anyone find all the regulations stating plainly that these financial institutions cannot lend money from their assets or their depositors' assets. Supreme court case law repeatedly has ruled that these financial institutions cannot lend their credit.
So, knowing that banks can't lend money or credit, what are they lending?
The answer is NOTHING! What happens is that credit card agreement with your signature becomes a negotiable instrument. The signature gives it energy/value. Title 12 instructs banks to treat negotiable instruments as CASH.
Whose cash? The consumer's cash. In accounting, a bank treats it as “cash equivalent” and that means that YOU FUNDED THE ACCOUNT! The instrument has your signature on it. You own it. But they NEVER disclose that. You are actually making a loan to the bank but they trick and convince you that they lent something, totally ignoring you being the one lending something.
Let's skip over 99% of contract law and just look at what a contract REQUIRES to be valid: