Ppt on Credit Card

7/28/2019 Ppt on Credit Card

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PRESENTATIONON

CREDIT CARD
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Any card that may be used repeatedlyto borrow money or

buyproducts and services on credit.

Normally we know Credit cards asPlastic money...!

A credit card is a way of payment by

using the plastic cards which areissued to customers for their

payment.

Credit cards are different than the
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1. How credit cards work

2. Interest charges

3. Benefits to customers4. Grace period

5. Benefits to merchants

6. Parties involved

7. Transaction steps

8. Rewards9. Fees charged to customers

10.Credit cards in ATMs

11.Tips

12.Types of cards in INDIA

About creditcards


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Credit cardsA credit card is part of a system of payments after the small plastic card issued tousers of the system.

It is a card entitling its holder to buy goods and services based on the holder'spromise to pay for these goods and services.

The issuer of the card grants a line of credit to the consumer (or the user) fromwhich the user can borrow money for payment to a merchant or as a cash advanceto the user.

Most credit cards are issued by local banks or credit unions, and are the shapeand size specified by the ISO/IEC 7810 standard as ID-1. This is defined as 85.60 53.98 mm in size


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Service ProvidersVISA

MASTER

AMERICAN EXPRESS

ICICI Bank

Axis Bank

Barclays Bank


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Parties involved in Credit

Cards

Card holder

Card-issuing bank

Merchant

Acquiring banks

Merchant account


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Cardholder: The holder of the card used to make a purchase;the consumer.

Card-issuing bank: The financial institution or otherorganization that issued the credit card to the cardholder.

This bank bills the consumer for repayment and bears therisk that the card is used fraudulently.

Merchant: The individual or business accepting credit cardpayments for products or services sold to the cardholder.

Acquiring bank: The financial institution accepting paymentfor the products or services on behalf of the merchant.


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Merchant account: This could refer to the acquiringbank or the independent sales organization, but ingeneral is the organization that the merchant dealswith.

Credit Card association: An association of card-issuing banks such as Visa, MasterCard, Discover,American Express, etc. that set transaction terms formerchants, card-issuing banks, and acquiring banks.

Transaction network: The system that implementsthe mechanics of the electronic transactions. May beoperated by an independent company, and onecompany may operate multiple networks.
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An acquiring bank (or acquirer) is the bank orfinancial institution that processes credit and or

debit card payments for products or services for a

merchant.

The term acquirer indicates that the bank accepts

or acquires credit card payment from the card-

issuing banks within an association. The best-

known (credit) card associations are Visa,

MasterCard, American Express, Diners Club,Japan Credit Bureau, Attijariwafa Bank, and

China UnionPay
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Transaction network: The system thatimplements the mechanics of the electronictransactions. May be operated by anindependent company, and one company mayoperate multiple networks.


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Types of Credit Cards

Premium credit cardCash credit cardGold credit cardAir line credit cardSilver credit cardBusiness credit cardBalance transfer credit card

Co-branded credit cardLow interest credit cardLife time free credit card


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Advantages of Credit Cards

Purchase Power and Ease of Purchase

Protection of Purchases

Emergencies

Credit Card Benefits

Protection against fraud


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The main benefit to each customer is convenience.

Compared to debit cards and cheques, a credit card allowssmall short-term loans to be quickly made to a customerwho need not calculate a balance remaining before every

transaction, provided the total charges do not exceed themaximum credit line for the card.

Credit cards also provide more fraud protection than debitcards.

In the UK for example, the bank is jointly liable with themerchant for purchases of defective products over 100.


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Many credit cards offer rewards and benefitspackages, such as offering enhanced productwarranties at no cost, free loss/damagecoverage on new purchases, and points which

may be redeemed for cash, products, or airlinetickets.

Additionally, carrying a credit card may be a

convenience to some customers as iteliminates the need to carry any cash for mostpurposes.


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Grace periodA credit card's grace period is the time the

customer has to pay the balance before interestis assessed on the outstanding balance.

Grace periods vary, but usually range from 20 to50 days depending on the type of credit card andthe issuing bank.

Usually, if a customer is late paying the balance,finance charges will be calculated and the graceperiod does not apply.


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Finance charges incurred depend on the graceperiod and balance; with most credit cards there isno grace period if there is any outstanding balancefrom the previous billing cycle or statement (i.e.

interest is applied on both the previous balance andnew transactions).

However, there are some credit cards that will onlyapply finance charge on the previous or old balance,

excluding new transactions.


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Late payments or overdue paymentsCharges that result in exceeding the credit

limit on the card (whether done deliberately

or by mistake), called over limit feesReturned cheque, fees or payment processing

fees (eg phone payment fee)

Cash advances and convenience cheques

(often 3% of the amount)


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Transactions in a foreign currency (as much as 3% ofthe amount). A few financial institutions do notcharge a fee for this.

Membership fees (annual or monthly), sometimes a

percentage of the credit limit.Exchange rate loading fees (these may sometimes

not be reported on the customer's statement, evenwhen they are applied)


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TRANSATION STEPS

Authorization: The cardholder pays for thepurchase and the merchant submits thetransaction to the acquirer (acquiring bank).

The acquirer verifies the credit card number, thetransaction type and the amount with the issuer(Card-issuing bank) and reserves that amount ofthe cardholder's credit limit for the merchant.

An authorization will generate an approval code,which the merchant stores with the transaction.


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Batching: Authorized transactions are stored in"batches", which are sent to the acquirer.

Batches are typically submitted once per day at

the end of the business day.

If a transaction is not submitted in the batch, theauthorization will stay valid for a period

determined by the issuer, after which the heldamount will be returned back to thecardholder's available credit.


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Clearing and Settlement: The acquirer sends the batchtransactions through the credit card association, whichdebits the issuers for payment and credits the acquirer.

Essentially, the issuer pays the acquirer for the

transaction.

Funding: Once the acquirer has been paid, the acquirerpays the merchant.

The merchant receives the amount totaling the funds inthe batch minus either the "discount rate," "mid-qualified rate", or "non-qualified rate" which are tiers offees the merchant pays the acquirer for processing thetransactions.


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Charge backs: A chargeback is an event in which money in amerchant account is held due to a dispute relating to thetransaction.

Charge backs are typically initiated by the cardholder.

In the event of a chargeback, the issuer returns the transactionto the acquirer for resolution.

The acquirer then forwards the chargeback to the merchant,who must either accept the chargeback or contest it.

A merchant is responsible for the chargeback only if he/shehas violated the card acceptance procedures as per themerchant agreement with card acquirers.


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Credit cards in ATMsMany credit cards can also be used in an ATM towithdraw money against the credit limit extended to

the card, but many card issuers charge interest oncash advances before they do so on purchases.

The interest on cash advances is commonly chargedfrom the date the withdrawal is made, rather thanthe monthly billing date.

Many consumers have large cash balances, which

have no grace period and incur interest at a rate thatis (usually) higher than the purchase rate, and willcarry those balance for years, even if they pay offtheir statement balance each month.


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These tips are important: Sign your card -- as soon as you receive it! (Obviously,this is only as effective as the clerk who's checking it.)

When you use your card at an ATM, enter your PIN insuch a way that no one can easily memorize your

keystrokes.

Don't leave your receipt behind at the ATM.

Your PIN and account number from a discarded receipt

could make you vulnerable to credit-card fraud. Also,don't throw out your credit-card statement, receipts orcarbons without first shredding them!


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These tips are important: Never give your credit-card number over the telephone unlessyou initiated the call.

Ignore any credit-card offer that requires you to spend moneyup-front or fails to disclose the identity of the card issuer.

Make certain you get your card back after you make a purchase

Always keep a list of your credit cards, credit-card numbers andtoll-free numbers in case your card is stolen or lost.

Check your monthly statement to make certain all charges areyour own, and immediately notify the card issuer of any errorsor unauthorized charges.


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Credit card business in India

A number of credit card providers offerbusiness credit cards for the Indiancustomers.

Features of business credit cards are

designed to take care of the financialrequirements of all types of customers.

In India, business credit cards come withwide range of basic and additional benefits.

Lucrative reward schemes that are offeredwith business credit cards make them highlypopular among the credit card users inIndia.


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India

Deutsche Bank Corporate Credit Card

Standard Chartered Executive Credit

Card

HDFC Bank Corporate Credit CardBOBCARD Corporate Global Credit

Card

HDFC Bank Gold Business Credit CardCan card Visa Corporate Credit Card

Jet Airways Citi Business Credit Card

Axis Bank Corporate Credit Card
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Features of Deutsche Bank Corporate

Credit Card:

It is a corporate branded credit card. Cash advance fee is 2.5% per month.

Issuer is MasterCard.

Cardholders receive insurance benefits. Issuing bank is Deutsche Bank.

Joining and renewal are free.

Regular interest rate is 2.95% per month. There are special rewards.


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Features of HDFC Bank Corporate

Credit Card:

There are MIS reporting facilities.

Regular interest rate is 2.65% per

month.

Cardholders receive discounts all overthe world.

Cash advance fee is 2.5% per month.

Minimum cash advance fee is INR 300.There are 0% fuel surcharge facilities.

Issuer is MasterCard. Interest rate is

low.


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Ppt on Credit Card