What is a BLEED, anyway?
In printing, a bleed is the process used to create the effect of something printing right up to any edge of the paper. It's called a bleed because when it's done correctly, the art seems to "bleed" right off the sheet.
HOW-TO EXAMPLE: setting up a business card with a BLEED
Color Legend and Explanation:
3.75" x 2.25"
This is an area extending a full 1/8" BEYOND all four sides of the business card. Whatever image or background you are printing up to the edge of the card must extend this additional 1/8" further to allow for the "margin of error" needed in cutting a bleed job.
Crop Line/Physical Boundary of Card
3.5" x 2"
This is the actual card itself, when cut down to finished size. After the bleed edge is cut off, this is the remaining area, and will be the printed card.
Main Image Area Limit
3.25" x 1.75"
Although the whole point of having a bleed is to print some images so they extend all the way (or "bleed off") the edge, it is vital not to put "mission critical" art — such as type that must be readable, important company logos, etc — any closer to the edge than 1/8” on all four sides. Again, there is a margin of error in cutting, and any item placed outside of this main image area limit cannot be guaranteed to show up intact on the finished card, or to appear to be in the correct position visually compared to the edges of the card if it does show up.