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All files must incorporate a 1/8" bleed on all four sides.
"Bleed" is a printing term used to indicate the area that will be trimmed off after the job is printed and cut down to the finished size. Since the bleed extends 1/8" all around the card, your document set-up should be 1/4" taller (1/8" on top and 1/8" on the bottom) and 1/4" wider (1/8" on the left and 1/8" on the right) than the finished size of the card. The chart below indicates what the document set-up should be for a particular finished size.
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