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ISO/IEC 7812Identification cards — Identification of issuers was first published by the International Organization for Standardization (ISO) in 1989. It is the international standard that specifies "a numbering system for the identification of issuers of cards that require an issuer identification number (IIN) to operate in international, interindustry and/or intra-industry interchange", and procedures for registering IINs. ISO/IEC 7812 has two parts:Part 1: Numbering systemPart 2: Application and registration proceduresThe registration authority of assigned IINs is the American National Standards Institute, but previously it was the American Bankers Association.An ISO/IEC 7812 number contains a single-digit major industry identifier (MII), a six-digit issuer identification number (IIN), an individual account identification number, and a single digit checksum. The major industry identifier is part of the issuer identifier number.
Costs associated with a charge card will often be a set fee for the card along with large penalties on any unpaid balances. This type of card does not allow cardholders to carry a balance from one month to the next as they would with a credit card. American Express and Diner's Club are examples of charge cards.Revolving credit. A revolving credit arrangement allows you to borrow up to your credit limit without having to reapply each time you need cash. As you repay the money you have borrowed, it is available to be borrowed again.For example, if you have a credit card with a credit limit of $1,500 and you make a purchase of $400, the amount of credit you have available is $1,100. But when you repay the $400, your credit limit goes back to $1,500 -- assuming you haven't charged anything else on the card.At any given time, your balance due may fluctuate from zero to the maximum credit limit. If you don't use the credit line in any billing cycle, no fees apply in most cases. But if you have a balance due and don't repay the full amount, finance charges are added to your next bill.Some revolving credit arrangements, such as a home equity line of credit, may have a predetermined end date, but the majority are open-ended as long as you make at least the minimum required payment on time.
Credit cards ppt (1)
What are Credit Cards? Pre-approved credit which can be used for thepurchase of items now and payment of them later.
Credit cards• It is a plastic card having a magnetic strip, issued by a bank or business authorizing the holder to buy goods or services on credit. Also called charge cards• The concept of using a card for was first described in 1887 by Edward Bellamy in his utopian novel Looking Backward.• The size of most credit cards is 85.60 × 53.98 mm
Eligibility For Getting The Card• Person should have a savings current account in the bank.• His assets and liabilities on a particular date are reported to bank.• A statement of annual or monthly income.• He is considered credit worthy up to certain limit depending upon his income, assets and expenditure.
Particulars Displayed On Credit Cards• Name of the customer• 16-digit card number• Validity date• The VISA hologram and the VISA logo• Name of the issuing bank• Signature period• Magnetic strip• PIN
CLASSIFICATION OF CREDIT CARDS Based on mode Based on Based on Based on Based on of credit status of geographical franchise/ issuer recovery credit card validity Tie-up Category Individ- Corpor-Charge Revolving Domestic Internation- ual ate Card credit card card al Card Cards Cards Domestic Proprie- Master VISA Tie-up tary card Card CardStandard Business Card Gold Card Card Card
Based on mode of credit recovery• Charge Card-A card that charges no interest but requires the user to pay his/her balance in full upon receipt of the statement, usually on a monthly basis. While it is similar to a credit card, the major benefit offered by a charge card is that it has much higher, often unlimited, spending limits.• Revolving credit card-A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs
Based on status of credit card• Standard Card- it is a generally issued credit card• Business Card- (Executive cards ) it is issued to small partnership firms , solicitors, tax- consultants ,for use by executives on their business trips.• Gold Card-a credit card issued by credit-card companies to favoured clients, entitling them to high unsecured overdrafts, some insurance cover, etc
Based on geographical validity• Domestic card- Cards that are valid only in India and Nepal are called domestic cards.• International Card- credit Cards that are valid internationally are called international cards.
Based on franchise/ Tie-up• Proprietary card- A bank issues such cards under its own brands. Eg. SBI card Cancard of canara bank• Master Card- this card is issued under the umbrella of “MasterCard International”• VISA Card – it is issued by any abnk having tie up with “VISA international”• Domestic Tie-up Card- it is issued by any abnk having tie up with domestic credit card brands such as CanCard and IndCard.
Based on issuer Category• Individual Cards- Non-corporate cards that are issued to individuals• Corporate Cards- Issued to corporate and business firms.
Innovative Cards• ATM Cards• Debit Crds- debits designated saving bank a/c.• Private label Card- issued by retailers and can be used only in that retailer’s store.• Affinity Group Cards- it can be used by collection of people with some form of common interest or relation ( professional ,alumni,retired persons org. )
Credit card cycle• A card holder makes purchase , and present it to the merchant instead of cash .• The retailer will check the number on the card , and he will tally signature of voucher and credit card .• Vouchers are send to banks, which in turn reimburses it for the customer’s purchase.
Credit card cycle • Purchase of goods and service on cardCredit purchase • marchant delivers goods after taking an authenticated credit card and noting the number and taking signature on certain forms.Credit card processing • Marchant raises the bill for the purchase and sends it to the credit card issuing bank for payment Bill raising • Issuing bank pays amount to the merchant establishment payment • Issuing bank raises bill on the credit cardholder and Bill to card holder sends it for payment • Credit card holder makes the payment to the issuing bank Card payment
Mechanics of Credit Card Operation Contract for credit card (1) Issue of credit card (2) Card User / Card Issuing Bank Payment of credit card(3) Customer Clearing and settlements (7) Charging of credit card Purchase of and raising bills (4) goods and services (3) Submission of bill Marchant’s bank for collection (5) Merchant establishment Payment for bills (6)
AdvantagesTo Cardholders :• Simple, convenient and can be substituted for cash• Convenient method of payment• He need not approach a bank for taking credit• Credit cards issued by leading banks are acceptable in many countries• Holders can withdraw cash from any branch of major banks worldwide.• Issuer of card provides 24 hrs customer helpline available across the world in case of any emergency.
To Merchants/ Shopkeepers :• Guaranteed payment• Lessens the security risk of holding the cash• Overseas visitors may purchase more, providing new market for retailer
To credit card companies/ Banks :• Source of revenue - Joining fee - card renew fee - services charges from retailers - Interest charged to customer
DisadvantagesTo cardholders :• Loss or stealing of cardTo Merchants/ Shopkeepers :• Retailers are required to pay a certain fee and servicecharges at an agreed percentage of their credit card sales.To credit card companies :• Risk of bad debt• Risk of fraud
Safety Tips Sign card with signature Do not leave cards lying around Close unused accounts in writing and by phone, then cut up the card Do not give out account number unless making purchases Keep a list of all cards, account numbers, and phone numbers separate from cards Report lost or stolen cards promptly