Management

1. XPXPXP
INSTITUTE OF MANAGEMENT
STUDIES
CREDIT CARD
SUBMITTED TO:
Miss Deepika Batra
SUBMITTED BY:
Jaishree Asnani(55548)
Manish Verma(55562)
Nidhi Nema(55570)
Sanyukta Agrawal(55606)

2. XPXPXPCredit Card
What is a credit card?
Pre-approved credit which can be used for the purchase
of goods and services now and payment of them later
A credit cards credit limit varies based upon
an individual’s perceived creditworthiness
Credit limit is the
maximum amount
loaned
Creditworthiness is an
individuals ability and
willingness to pay the money
back

3. XPXPXPCredit Card
 Credit cards charge interest and are primarily used for short-term financing.
Interest usually begins one month after a purchase is made and borrowing
limits are pre-set according to the individual's credit rating.
 It allows its holder to buy goods and services based on the holder's promise
to pay for these goods and services.
 The issuer of the card creates a revolving account and grants a line of credit
to the consumer (or the user) from which the user can borrow money for
payment to a merchant or as a cash advance to the user.
 Holders of a valid credit card have the authorization to purchase goods and
services up to a predetermined amount, called a credit limit.
 The vendor receives essential credit card information from the cardholder,
the bank issuing the card actually reimburses the vendor, and eventually the
cardholder repays the bank through regular monthly payments.
 If the entire balance is not paid in full, the credit card issuer can legally
charge interest fees on the unpaid portion.

4. XPXPXPCREDIT CARD ISSUER
 A credit card issuer is a bank or credit union that offers credit
cards.
 The credit card issuer makes the credit limit available to
cardholders and is responsible for sending payments to
merchants for purchases made with credit cards from that bank.
 Also called member banks. Chase and Citi are examples of
credit card issuers.
 Credit card issuers can't issue credit cards all by themselves,
they need the help of payment processing networks like Visa
and MasterCard (a credit card association).
 However, American Express and Discover act as both the
credit card issuers and the payment processing network.

5. XPXPXPCREDIT CARD AGREEMENT
• A Credit Card Agreement is a contract between
a credit card issuer and the cardholder. The
credit card agreement spells out the terms,
conditions, pricing, and penalties of the credit
card.

6. XPXPXP
• The annual percentage rate for each type of balance that can be carried –
purchases, balance transfers, and cash advances.
• Finance charge information including the minimum finance charge and the finance
charge calculation method.
• Grace Period.
• Credit Card Fees.
• Credit Limit and information about how your credit card issuer can change it .
• Details about using your credit card in another country.
• Options for paying your credit card balance.
• How your information is shared or kept private.
• Changes the credit card issuer can make to your account.
• What constitutes default and what happens if you default.
• How to handle a lost credit card.
• How to close your account.
• How to handle disputes with the credit card issuer .
• The legal body who enforces the credit card agreement.
The credit card agreement will list:

7. XPXPXPEligibility 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.

8. XPXPXP
How a Credit Card Issuers Makes
Money
• Credit card issuers (most often a bank or credit union) receive revenue
from fees paid by stores that accept their cards and by consumers that use
the cards, and from interest charged consumers on unpaid balances.
Credit Card Companies make money in a number of ways like :
 Fees (annual fee, over limit, past due, etc)
 Interest on the revolving loan if a credit card balance is not paid in
full each month.
 The card Issuer [the bank that issued the card and/or the issuer
network ie: Visa, MS, American Express, JCB etc] makes a
percentage of each item you purchase from the merchant who accepts
your credit card. These rates range from 1% to 4% of each purchase.
 Last, the cardholder can make additional money through other means,
such as selling your name to a mailing list or sending advertisements
in your monthly bill. (Due to regulation, this is becoming less
frequent)

9. XPXPXPTypes of Credit Cards
 Standard Credit Card
 Premium Credit Cards
 Charge Cards
 Limited Purpose Card
 Secured Credit Cards
 Prepaid Credit Cards
 Business Credit Cards
 Reward Credit Cards
 Student Credit Cards
 Travel and Entertainment Credit Cards
 Zero Percent Interest Credit Cards

10. XPXPXPTypes of Credit Cards
Standard Credit Cards
The most common type of credit card allows you to have a
revolving balance up to a certain credit limit. Credit is used up
when you make a purchase and made available again once
you've made a payment. A finance charge is applied to
outstanding balances at the end of each month. Credit cards
have a minimum payment that must be paid by a certain due
date to avoid late-payment penalties.
Standard credit cards are also called "plain-vanilla" credit cards
because they offer no frills or rewards. They're also
uncomplicated and relatively easy to understand.
Since each person's financial needs are different, it makes sense that there are
different types of credit cards. Before you apply for a credit card, become familiar
with the various kinds of credit cards to make sure you're choosing the best credit
card for you.

11. XPXPXPTypes of Credit Cards
Premium Credit Cards
•These cards offer incentives and benefits beyond that of a regular credit card.
Examples of premium credit cards are Gold and Platinum cards that offer cash
back, reward points, travel upgrades, and other rewards to cardholders.
Premium cards can have higher fees and usually have minimum income and
credit score requirements.
Charge Cards
•Charge cards do not have a preset spending limit and balances must be paid in
full at the end of each month. Charge cards typically do not have a finance
charge or minimum payment since the balance is to be paid in full. Late
payments are subject to a fee, charge restrictions, or card cancellation
depending on your card agreement.
Limited Purpose Card
•Limited purpose credit cards can only be used at specific locations. Limited
purpose cards are used like credit cards with a minimum payment and finance
charge. Store credit cards and gas credit cards are examples of limited purpose
credit cards.

12. XPXPXPTypes of Credit Cards
Secured Credit Cards
• Secured credit cards are an option for those without a credit history or
those with blemished credit. Secured cards require a security deposit to
be placed on the card. The credit limit on a secured credit card is equal
typically at least the deposit made on the card, but it could be more in
some cases. You're still expected to make monthly payments on your
secured credit card balance.
Prepaid Cards
• Prepaid cards require the cardholder to load money onto the card before
the card can be used. Purchases are withdrawn from the card's balance.
The spending limit does not renew until more money is loaded onto the
card. Prepaid cards do not have finance charges or minimum payments
since the balance is withdrawn from the deposit. These cards are not
actually credit cards and they don't directly help you rebuild your credit
score. Prepaid cards are similar to debit cards, but are not tied to a
checking account.

13. XPXPXPTypes of Credit Cards
Business Credit Cards
•Business credit cards are designed specifically for business use. They provide
business owners with an easy method of keeping business and personal
transactions separate. There are standard business credit and charge cards
available.
Rewards Credit Card
•Rewards credit cards give you a bonus based on your card usage. Choosing the
right rewards credit card means picking one that gives rewards you can use. With a
good rewards card, you can out earn any costs, e.g. annual fee, without too much
hassle.
Balance Transfer Credit Cards
•Balance transfer credit cards are good for combining several credit card balances
or for taking advantage of a lower interest rate. Not only should you consider the
introductory balance transfer interest rate, but also how long the rate lasts and the
rate that applies once the promotional rate expires.

14. XPXPXPTypes of Credit Cards
Student Credit Cards
• Student credit cards are
designed for college-aged
consumers who are just
starting out with credit.
These cards typically give
credit to college students
who lack a credit history. Not
every credit card with
"student" in the title is
actually good for students.
So, if you're on the market
for one of these cards, make
sure you pay attention to the
credit card terms.
Travel and Entertainment
Credit Cards
• A credit card that can be
used to cover travelling
expenses and for your
enjoyment/entertainment.
An example of a T&E card is
"Diners Club." It can only be
used at certain restraunts
which would constitute
"entertainment.“
Zero Percent Interest Credit
Cards
• As the name indicates, zero
percent credit cards do not
require the credit card owner
to make any kind of interest
on their shopping. You could
utilize your credit card and
also purchase anything you
desire and pay only the
monthly minimum
requirement.

15. XPXPXPCLASSIFICATION OF CREDIT CARDS
Based on mode
of credit
recovery
Based on
status of
credit card
Based on
geographical
validity
Based on
franchise/
Tie-up
Based on
issuer
Category
Charge
Card
Revolving
credit card
Standard
Card
Domestic
card
Internation-
al Card
Individ-
ual Cards
Corpor-
ate Cards
Proprie-
tary card
Business
Card
Gold Card
Master
Card
VISA
Card
Domestic
Tie-up
Card

16. XPXPXPBased 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 customer's current cash flow needs

17. XPXPXPBased 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

18. XPXPXPBased 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.

19. XPXPXPBased 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 bank having tie up with
“VISA international”
• Domestic Tie-up Card- It is issued by any bank having tie
up with domestic credit card brands such as CanCard and
IndCard.

20. XPXPXPBased on issuer Category
• Individual Cards- Non-corporate cards that are issued to
individuals
• Corporate Cards- Issued to corporate and business firms.

21. XPXPXPInnovative Cards
• ATM Cards cum Debit Cards- 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. )

22. XPXPXP
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

23. XPXPXP
By:- Manish Verma