Call Girls Pune Just Call 9907093804 Top Class Call Girl Service Available
Consumer credit
1. M B A ( F T ) 4 T H S E M E S T E R
S U B J E C T – F I N A N C I A L S E R V I C E S
S U B M I T T E D B Y : - S H R U T I P E N D H A R K A R
CONSUMER CREDIT
4. (a) Defined as “money, goods or services provided to an
individual in lieu of payment.”
(b) The amount of credit used by consumers to purchase
non–investment goods or services that are consumed and
whose value depreciates quickly.
(c) This includes automobile, recreational vehicles (RVs),
education, boat and trailer loans but excludes debts taken
out to purchase real estate or margin on investment
accounts.
(d) Home Mortgage is not consumer credit.
6. DEFINITION
(a) Defined as “a small plastic card issued by a bank,
business, etc., allowing the holder to purchase goods or
services on credit.”
(b) It allows the cardholder to pay for goods and services
based on the holder’s promise to pay for them.
(c) 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.
7. TYPES OF CREDIT CARD
Balanced
Credit cards
Rewards
Credit Cards
Business
Credit Cards
Standard
Credit Cards
Charged
Credit Cards
Secured
Credit Cards
8. Standard Credit Card
Also called “plain-vanilla” credit cards because they offer no frills or
rewards.
The standard 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.
Balanced Credit Card
Many credit cards come with the ability to transfer balances, a
balance transfer credit card is one that offers a low introductory rate
on balance transfers for a period of time.
9. Rewards Credit Cards
As the name indicates, rewards cards are those that offer rewards on credit
card purchases. Three basic types of rewards cards:
cash back
points
travel
Some people prefer the flexibility of cash back rewards, while others like
points that can be redeemed for cash or other merchandise. Travel
rewards cards remain a favorite among frequent travelers because
of the ability to earn free flights, hotel stays, and other travel perks.
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
10. Secured Credit Cards
An option for people who don't have a credit history or who have
damaged credit.
Secured cards require a security deposit to be placed on the card.
The credit limit on a secured credit card is typically equal to 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.
Business Credit Cards
Designed specifically for business use.
They provide business owners with an easy method of keeping
business and personal transactions separate.
11. MECHANISM OF CREDIT CARDS
A credit card issuing company, such as a bank or credit union, would
enter into agreements with merchants for them to accept their credit
cards.
The credit card issuer would issue a credit card to a customer at the
time or after an account has been approved by the credit provider,
which need not be the same entity as the card issuer.
The cardholders can then use it to make purchases at merchants
accepting that card.
12. When a purchase is made, the cardholder agrees to pay the card
issuer. The cardholder indicates consent to pay by signing a
receipt with a record of the card details and indicating the
amount to be paid or by entering a personal identification
number (PIN).
Electronic verification systems allow merchants to verify in a few
seconds that the card is valid and the cardholder has sufficient
credit to cover the purchase, allowing the verification to happen
at time of purchase. The verification is performed using a credit
card payment terminal or point-of-sale (POS) system with a
communications link to the merchant's acquiring bank. Data
from the card is obtained from a magnetic stripe or chip on the
card; the latter system is called Chip and PIN in the United
Kingdom and Ireland, and is implemented as an EMV card.
Each month, the cardholder is sent a statement indicating the
purchases made with the card, any outstanding fees, and the
total amount owed.
16. DEFINITION
(a) Defined as “A card issued by a bank allowing the holder to
transfer money electronically to another bank account
when making a purchase.”
(b) A debit card is a plastic payment card that provides the
cardholder electronics access to their bank account at a
financial institution.
(c) Debit cards usually also allow for instant withdrawal of
cash, acting as the ATM card for withdrawing cash.
17. TYPES OF DEBIT CARD
PIN only
cards
Dual Cards
EBT cards
Prepaid
Cards
18. PIN-only cards
PIN-only debit cards are linked to your bank or credit union account.
You can use a PIN-only card to get cash from an ATM, make
deposits, transfer funds between accounts, buy goods or services
from retailer and pay certain bills online or by phone.
Dual – use cards
Dual-use debit cards are both signature- and PIN-enabled, and are
tied directly to your financial institution account.
Prepaid Cards
Prepaid cards are not associated with any specific account, but
instead provide access to funds deposited directly on the card by you
or a third party – like a store, friend or family member. When you
make a purchase with a prepaid card, funds are taken directly from
the actual balance on the card.
EBT cards
Electronic Benefits Transfer (EBT) cards are provided by many state
or federal government agencies to people who qualify for cash
payments, food stamps or other benefits.
19. MECHANISM OF DEBIT CARDS
Debit cards give you a fast, easy and secure way to make a purchase or
withdraw cash.
When you use your debit card to buy something or withdraw money
from an ATM, the transaction usually takes three important steps:
(a) The transaction is forwarded through what is called a payment
processor.
(b) The processor routes the transaction to an ATM/debit network.
(c) The network then sends the transaction to your bank or credit union.
Your financial institution verifies the availability of funds and then
approves or declines the transaction.
20. When a purchase is made, the cardholder agrees to pay the card
issuer. The cardholder indicates consent to pay by signing a
receipt with a record of the card details and indicating the
amount to be paid or by entering a personal identification
number (PIN).
Electronic verification systems allow merchants to verify in a few
seconds that the card is valid and the cardholder has sufficient
credit to cover the purchase, allowing the verification to happen
at time of purchase. The verification is performed using a credit
card payment terminal or point-of-sale (POS) system with a
communications link to the merchant's acquiring bank. Data
from the card is obtained from a magnetic stripe or chip on the
card; the latter system is called Chip and PIN in the United
Kingdom and Ireland, and is implemented as an EMV card.
Each month, the cardholder is sent a statement indicating the
purchases made with the card, any outstanding fees, and the
total amount owed.
21. ADVANTAGES DISADVANTAGES
Prepaid card
Alternative to cash
Immediate transfer of
funds
Instant withdrawal of cash
Control Limit
Record keeping is
mandatory
Convenience is not always
guaranteed
Hidden fees are
everywhere
Internet scams are
commonplace
Safety
ADVEANTAGES & DISADVANTAGES
