Credit cards

CREDIT CARD HOLDERS

MUKTA CHUGH – 9SONALI LACHHANI – 23DISHANT NAGRANI – 31DHEERAJ RAMCHANDANI - 39JUHI MAKHIJA - 25

What it is???• A card issued by a financial company.

• Giving the holder an option to borrow funds, usually at point of sale.

• Charge interest, usually begins after 1 month after purchase.

• Borrowing limits are pre-set according to the individual's credit rating.

Credit and Debit cards

• As the names imply, credit cards allow the extension of credit and the delay of payment while debit cards charge or debit your account at the moment of the transaction.

Debit Card Credit Card

Understanding of a Credit

card

1. Issuing bank logo

2. EMV chip on "smart cards"

3. Hologram

4. Credit card number

5. Card brand logo

6. Expiration Date

7. Card Holder Name

8. contactless chip

Back side of a credit card:

Magnetic Stripe

Signature Strip

Card Security Code

Different types of credit cards

Silver credit Cards

Gold Credit Cards

Platinum or Titanium credit cards

Reward Cards

Business credit cards

Students Credit Cards

Kisan Credit Card

Secured Credit Card

Airline credit card

How Credit Card is processed?

1. Authorization

2. Batching

3. Clearing

4. Funding

JUHI – CUSTOMER

DHEERAJ – MERCHANT

MUKTA – ACQUIRER

DISHANT – ISSUING BANK

AuthorizationThe cardholder

requests apurchase from the

merchant.

The merchant submits the

request to the acquirer.

The acquirer sends a request

to the issuer to authorize thetransaction.

An authorization code is sent

to the acquirer if there is

valid credit available.

The acquirer authorizes the

transaction.

The cardholder receives the

product.

Batching

The merchant stores all the

day’s authorized sales in a

batch.

The merchant sends the

batch to the acquirer at the

end of the day to receive

payment.

ClearingThe batch is sent throughthe “card network“ to requestpayment from the issuer.

The card networkdistributes each

transactionto the appropriate

issuer.

The issuer subtracts itsinterchange fees, which areshared with the card network,and transfers the amount.( 100 – 1.5 )

The card network routes theamount to the acquirer.( 98.5)

Funding

The acquirer subtracts itsdiscount rate and pays themerchant the remainder.( 98.5 – 0.5 )

The cardholder is billed( -100 )

Parties Involved• Cardholder

• Card-issuing bank

• Merchant

• Acquiring bank

• Credit Card association

• Advantages of using a credit card:-

o Purchase Power and Ease of Purchase

o Protection of Purchases

o Emergencies

o Credit Card Benefits

• Disadvantages of using a credit card:-

o Blowing Your Budget

o High Interest Rates and Increased Debt

o Credit Card Fraud

Positive Credit Card use

Proper credit

card use

Helps develop

positive credit

history and

credit report

Earn a high

credit score

A high credit score gives the consumer the opportunity to have

lower interest rates on loans, the privilege to use different forms of

credit, and an easier approval process for future credit

Look For:-

A Low Annual Percentage Rate (APR)

No Annual Fee

A Long Grace Period

Low Penalty Rates

• The Federal Trade Commission estimates that 10 million people are victimized by credit card theft each year

• Credit card companies lose close to $50 billion dollars per year because of fraud

ConclusionIf you do decide to use credit cards, remember these simple rules:-

• Keep track of all your purchases.

• Don't spend outside your budget.

• Pay off your balance on all of your credit cards at the end of each month.