Credit cards and stock market operation


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  • ISO/IEC 7812 Identification 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",[1] and procedures for registering IINs.[2] ISO/IEC 7812 has two parts:
    Part 1: Numbering system
    Part 2: Application and registration procedures
    The registration authority of assigned IINs is the American National Standards Institute,[3] 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.[1] 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.
  • visual design.
  • Credit cards and stock market operation

    3. 3. INTRODUCTION Credit cards are innovative ones in the line of financial services offered by commercial banks. Credit card culture is a old hat in western countries. In India, it is relatively a new concept that is fast catching on. The present trend indicates that the coming years will witness a burgeoning growth of credit cards which will lead to a cashless society. 3
    4. 4. History of credit card The idea of credit card was first developed by Franz Nesbitum Mc Namara, an American businessman who found himself without cash at a weekend resort founded Diner’s card in 1950.Right from that time, the commercial banks and non-banking companies in USA adopted the idea of credit card to develop their business. Barclays Bank was the first bank to introduce credit card in 1966 in Britain. The credit card business got momentum in 60’s a number of banks entered in the field in a big way. 4
    5. 5. What are Credit Cards? Pre-approved credit which can be used for the purchase of items now and payment of them later. 5
    6. 6. 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 credit 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 6
    7. 7. Anatomy of Credit Card 7
    8. 8. Face or Front Side of a Credit Card 8
    9. 9. Face or Front Side of a Credit Card Logo of issuing entity. Logo of payment processor. Hologram. Expiration date. Cardholder’s name. Card number. Individual account identifier number. Issuer identifier number (IIN). Embedded microchip. Major industry identifier (MII). Issue date Bank identification number (BIN). 9
    10. 10. Rear or Back Side of a Credit Card 10
    11. 11. Rear or Back Side of a Credit Card The back side of a credit card shows following details: Security code (card verification number). Magnetic stripe. Signature panel. Additional information. 11
    12. 12. 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. 12
    13. 13. • • • • • • • • 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 13
    14. 14. What does 16 digit means 14
    15. 15. CLASSIFICATION OF CREDIT CARDS Based on mode of credit recovery Charge Card Standard Card Based on status of credit card Revolving credit card Business Card Based on geographic al validity Domestic card Gold Card Based on franchise/ Tie-up International Card Proprietary card Based on issuer Category Individual Cards Corporate Cards VISA Card Master Card Domestic Tie-up Card 15
    16. 16. 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 customer's current cash flow needs 16
    17. 17. 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, taxconsultants ,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 17
    18. 18. 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. 18
    19. 19. Based on franchise/ Tie-up Proprietary card- A bank issues such cards under its own brands. E.g.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. 19
    20. 20. Based on issuer Category • Individual Cards- Non-corporate cards that are issued to individuals • Corporate Cards- Issued to corporate and business firms. 20
    21. 21. 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. 21
    22. 22. Credit card cycle 22
    23. 23. Advantages To 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. 23
    24. 24. To Merchants/ Shopkeepers : • Guaranteed payment • Lessens the security risk of holding the cash • Overseas visitors may purchase more, providing new market for retailer 24
    25. 25. To credit card companies/ Banks : • Source of revenue - Joining fee - card renew fee - services charges from retailers - Interest charged to customer 25
    26. 26. Disadvantages To cardholders : • Loss or stealing of card To Merchants/ Shopkeepers : • Retailers are required to pay a certain fee and service charges at an agreed percentage of their credit card sales. To credit card companies : • Risk of bad debt • Risk of fraud 26
    27. 27. 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 27
    28. 28. Interest charges  Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.  For example, if a user had a Rs.1,000 transaction and repaid it in full within this grace period, there would be no interest charged. If, however, even Rs 1.00 of the total amount remained unpaid, interest would be charged on the Rs 1,000 from the date of purchase until the payment is received. The precise manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement. 28
    29. 29. Detriments to customers High Interest and Bankruptcy Inflated Pricing for All Consumers 29
    30. 30. High Interest and Bankruptcy  Credit cards with low introductory rates are limited to a fixed term, usually between 6 and 12 months after which a higher rate is charged. As all credit cards assess fees and interest, some customers become so encumbered with their credit debt service that they are driven to bankruptcy. 30
    31. 31. Inflated Pricing for All Consumers  Merchants that accept credit cards must pay interchange fees and discount fees on all credit card transactions. However, merchants are usually barred by their credit agreements from passing these fees directly to the credit card customers, or from setting a minimum transaction amount. 31
    32. 32. Size of Credit Card 32
    33. 33. Size of Credit Card  The average dimensions of a credit card in inches, mm and cm  Credit card has a height of 2.125 inches (53.98 mm or 5.4 cm).  It has a width of 3.370 inches (85.60 mm or 8.5 cm).  Its thickness is of 0.030 inch (0.76 mm or 0.076 cm).  Its four corners (edges) are rounded with a circle of radius (r) measuring 0.125 inch (3.18 mm or 0.318 cm). 33
    34. 34. Grace period  A credit card's grace period is the time the customer has to pay the balance before interest is assessed on the outstanding balance. Grace periods vary, but usually range from 20 to 50 days depending on the type of credit card and the issuing bank. Some policies allow for reinstatement after certain conditions are met. 34
    35. 35. Parties involved  Cardholder: The holder of the card used to make a purchase; the consumer.  Card-issuing bank: The financial institution or other organization that issued the credit card to the card Merchant: The individual or business accepting credit card payments for products or services sold to the cardholder.  Acquiring bank: The financial institution accepting payment for the products or services on behalf of the merchant.  Independent sales organization: Resellers (to merchants) of the services of the acquiring bank.  Merchant account: This could refer to the acquiring bank or the independent sales organization, but in general is the organization that the merchant deals with. 35
    36. 36. CONTINUE..  Credit Card association: An association of card-issuing banks such as Visa, MasterCard, Discover, American Express, etc.  Transaction network: The system that implements the mechanics of the electronic transactions. May be operated by an independent company, and one company may operate multiple networks.  Affinity partner: Some institutions lend their names to an issuer to attract customers that have a strong relationship with that institution, and get paid a fee or a percentage of the balance for each card issued using their name. Examples of typical affinity partners are sports teams, universities, charities, professional organizations, and major retailers. 36
    37. 37. Types of Credit Cards 37
    38. 38. Standard Credit Card  Most commonly used.  One is allowed to use money up to a certain limit.  The account holder has to top up the amount once the level of the balance goes down.  An outstanding balance gets a penalty charge. 38
    39. 39. Premium Credit Card  This has a much higher bank account and fees.  Incentives are offered in this over and above that in a standard card.  Credit card holders are offered travel incentives, reward points, cask back and other rewards on the use of this card. This is also called the Reward Credit Card.  Some examples are: airlines frequent flier credit card, cash back credit card, automobile manufacturers' rewards credit card. 39
    40. 40. Gold Credit Card  Gold credit cards are made for higher income groups who also have higher credit rating. It is a status symbol and is considered prestigious. The features of gold credit cards are:  Cash withdrawal limit is higher  Credit limit is higher  Provides one Add-on card which can be given to either, spouse, children or parents of the credit card holder  Provides many privileges such as travel insurance, reward points, cash back offers etc. 40
    41. 41. Platinum or Titanium Card  Platinum or Titanium cards are similar to gold credit cards but they have few more additional benefits. The additional features may differ from bank to bank. Few common features are listed below:  Protection against credit card loss and theft.  Protection against online fraud transactions  Protection against sickness and injury by an accident.  There is no yearly fee 41
    42. 42. Silver Credit Card  Silver credit cards are the standard credit cards available and most of the employed people with 4 or 5 years’ experience can own this type of card. The features of silver cards are:  Lower membership fees  The applicant need not be a high- salaried person to buy silver card.  The interest rate is 0% initially between 6-9 months when transferring account balance from one credit provider to another one.  If the credit history of the card holder is good, the credit limit provided will be the same as provided to other credit cards. 42
    43. 43. Rewards Credit Card  Many credit cards have reward programs that can influence your spending.  The perks may come in the form of cash, points or discounts. Points that accumulate, for instance, can be traded off for free hotel stays, merchandise, air travel car rentals and certificates. However, these credit cards can come with complex rules, limits and restrictions. The key is to try to make sure that annual fees don't end up eliminating all the benefits.  Rewards cards are typically best for people who pay their balances off every month 43
    44. 44. Business Credit card  This credit card is available for businessmen who have large scale, small scale or medium scale business to look after.  This card is highly useful for facilitating businessman’s training programs, travel and entertainment programs 44
    45. 45. Prepaid Credit Card  This is directly connected to savings account. The payments from this card can be made until there is balance in the account.  Low Interest Rate Credit Cards: This credit card is highly useful as they will have low interest rates. 45
    46. 46. Corporate Credit Card  Corporate Liability Corporate Cards are an effective way of managing travel policies and negotiating preferential terms with key suppliers.  These cards are issued after credit assessment of the corporate; who in turn defines the limit on individual cards.  The corporate bears the liability for the entire outstanding amount on the cards.  Payment is made directly to the Bank once a month instead of multiple payments to individual employees/suppliers.  Exposure risk of the Corporate is mitigated by the fact that the card is a charge card wherein the full payment. 46
    47. 47. Smart Credit Card  A smart card contains more information than a magnetic stripe card and it can be programmed for different applications.  Smart cards can contain programming and data to support multiple applications and some can be updated to add new applications after they are issued.  Smart cards can be designed to be inserted into a slot and read by a special reader or to be read at a distance, such as at a toll booth.  Cards can be disposable (as at a trade-show) or reloadable (for most applications). 47
    48. 48. Virtual Credit Card  A virtual credit card, also known as a throwaway or temporary credit card, is a disposable payment card used for onetime purchases on the Internet.  It consists of a single-use credit card number generated by the credit card issuer.  most cases, virtual credit card numbers can only be used once, and will expire after about a month if not used; this setup helps protects the user from online credit card fraud. Virtual credit cards can usually be obtained from a consumer's current credit card issuer. 48
    49. 49. E-Wallet Card  E-wallet is an online prepaid account where one can stock money, to be used when required. As it is a pre-loaded facility, consumers can buy a range of products from airline tickets to grocery without swiping a debit or credit card. 49
    51. 51. If Questions any ??? 51