This document discusses credit cards and their history and features. It defines credit cards as plastic cards that can be used to make purchases or obtain cash using a line of credit. Credit cards are classified in different ways, including by mode of credit recovery (charge cards or revolving credit), status (standard, business, gold), geographical validity (domestic, international), franchise/tie-up (proprietary, MasterCard, Visa), and issuer (individual, corporate). The document also outlines the credit card cycle and provides advantages to both cardholders and credit card companies/banks, as well as some disadvantages.

1. Credit Card
By:
Harsh Gupta
Himanshu Chugh

2. Credit
 A legal agreement to receive cash,
goods, or services now and pay for
them in the future.

3. Credit Cards
 Plastic cards with electronic
information that can be used by the
holder to make purchases or obtain
cash advances using a line of credit
made available by the card-issuing
financial institution.

4. Debit Cards
 Debit cards are plastic cards with
electronic information, that look
very similar to credit cards, that
you can use to take money out
against your checking account.
 When you swipe your debit card
remember that the money is taken
immediately from your checking
account.

5. History of Credit Card
 Invented in 1887 by Edward Bellamy.
 1st - credit card - 1920s in US.
 Bank of America - BankAmericard in 1958
Chargex – Visa Card
 MasterCard - 1966 Group of Banks in US
 In 1966 - 1st Non-US Credit Card was
issued by Barclays’ Bank in the UK.

6. 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

7. CREDIT CARD NUMBER
STRUCTURING
 1ST – 6 No’s – Issuing bank code.
 Next – 9 No’s – Individual A/c No.
 Final Digit – Validity Check Code.
 Extra Codes - Will be Issue & Security
Codes.
 The size of most credit cards
is 3 3⁄8 × 2 1⁄8 in (85.60 × 53.98 mm)

8. CLASSIFICATION
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
International
Card
Individual
Cards
Corporate
Cards
Proprie-tary
card
Business
Card
Gold
Card
Master
Card
VISA
Card
Domestic
Tie-up
Card

9. 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

10. 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, 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.

11. 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.

12. Based 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.

13. Based on issuer Category
 Individual Cards- Non-corporate
cards that are issued to individuals.
 Corporate Cards- Issued to
corporate and business firms.

14. Credit card cycle
Credit purchase
• Purchase of goods and
service on card.
Credit card
processing
• Merchant delivers goods after taking an authenticated credit card
and noting the number and taking signature on certain forms.
Bill raising
• Merchant raises the bill for the purchase and sends it to
the credit card issuing bank for payment
Payment
• Issuing bank pays amount to the merchant
establishment
Bill to card holder
• Issuing bank raises bill on the credit cardholder and
sends it for payment
Card payment
• Credit card holder makes the payment to the
issuing bank

15. 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 may vary, but usually
range from 20 to 55 days depending on
the type of credit card and the issuing
bank.

16. Advantages
To Cardholders :
 Simple, convenient and can be substituted for cash.
 Convenient method of payment.
 Quick way to borrow.
 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.

17. To credit card companies/ Banks :
 Source of revenue
- Joining fee
- Card renew fee
- Services charges from retailers
- Interest charged to customer

18. DISADVANTAGES
 Hidden costs.
 A debt trap for the cardholder.
 Cases of fraud are extremely common today.
 Credit cards can be used at ATM cards, but
considerable processing fee required.

19. THANK You..!!
HAPPY DIWALI