credit card basic information

1. Credit Cards
Col Amar Parkar 2120982515
Aneesh Mittal 2120982516
This Photo by Unknown Author is licensed under CC BY-SA

2. Preview
Concept
History
Classification
Mechanics Features
Eligibility and
Documents
Process
Which Card
suits me?
How to build
Credit History
Precautions
Case Study
Advantages
and
Disadvantages

3. Concept
• Plastic Money
• Card which provides the holder , the flexibility of
availing credit for a specified amount and specified
period
• Buy Now Pay Later
• The card issuer (usually a bank or credit union) creates
a revolving account and grants a line of credit to the
cardholder, from which the cardholder can borrow
money for payment to a merchant or as a cash
advance. (says Wiki)

4. History
Edward Bellamy introduced
the idea of a charge card in
his novel “Looking Backward”
in 1887.
1887
Charge coins, Medals and
Charge a plates were some
initial versions
1930s
First air travel card
1934
Diners Club Card, first modern
version.
1950
BankAmericard , first
revolving credit financial
system-based card which was
accepted by No of merchants.
1958
--1.2 Billion cards in circulation
in the US.
--52 million in India.
2020

5. Classification of Cards
• Charge cards- No interest charge, higher
limits, to be paid in full
• Revolving credit cards-a credit line extended
by the bank for 45-60 days. Min amount to be
paid . Any extended time attracts 18-24% interest
from the date of expense till payment date
• Domestic/international use
• Different card issuers( Banks and Payment
networks)
• Cards for specific uses, airmiles, amazon pay,
Petro card, Rewards, Cash back, pay 1/3rd
• Exclusivity: Sapphire, Emerald, Platinum, Gold,
Silver
• Slice cards?

6. How does it work?
• Customer purchase item and
presents card to seller.
• Seller verifies details and credit limit ,
validity using electronic means , POS
machine.
• Seller then submits the voucher to
the bank which pays the said amount
to the seller.
• The customer pays the amount to the
bank after the billing cycle
• The seller must pay a commission to
the bank for the credit facility
• Any default by customer attracts
interest .
• Banks offer loans based on credit
card.

7. Features on a Card
Name of the Customer
Validity from/to
16 digit No
PIN/CVV( backside)
Bank Name
Card issuer Name(Visa/Mastercard/Rupay)
Magnetic Strip
Electronic chip for POS detection

8. Who gets a Card?
• Savings Account
• Tax Return
• Should be in the Govt Revenue System
• Bank should consider the person credit worthy based on the income,
expenditure, assets and liabilities.(CIBIL score)

9. Documents Required to Apply
ID Proof-
Passport, PAN,
Aadhar, Voter ID
Residence Proof
– Aadhar,
Electricity Bill,
Tele Bill
Income Proof-
ITR, Payslips,
Certified
Financials

10. Process
• Compare credit card offers
• Select cards of leading Indian Banks
• Eligibility check
• Instant Approval
Or
• Visit Bank Website
• Compare cards

11. Which Credit
Card Suits me ?
• Spending Pattern
• Reward Type
• Fees and Charges
• Offers on Card
• Welcome Kit/gift
• Payment Options

12. How to Build Credit History
MAKING REGULAR
PAYMENTS
ON TIME PAYMENTS KEEPING CREDIT
UTILIZATION UNDER
CREDIT LIMIT
MAINTAINING LOW
DEBT TO INCOME
RATIO

13. How to get
Credit card if
Customer don’t
have credit
history
• Opening a secured credit card
• Since spenders are only borrowing from the money they
put down as a deposit, there is little risk for the lender,
and it gives them a snapshot of your spending and
repayment habits.
• an authorized user on an established credit account,
such as a parent or spouse(must have good credit
habits)

14. Precautions
Approach Approach the bank if you’ve overspent on your card
Miss Never miss a card payment
Plan Plan your purchases
Choose Choose an EMI option for large purchases
Check Periodically check your credit limit
Avoid Avoid putting daily purchases on your card
Don’t spend Don’t spend more than you can pay back.
Read Read the fine print

15. Advantages
To Card Holder
• Convenience
• EMI
• No need to seek
credit line from
bank
• Facilities like
lounge access,
reward points,
cashback
• Record of
expenses
• Helpline in case of
emergency
To Bank
• Fees
• Interest on default
• More business
thorough
transactions
• Service charge
from merchant
To Merchant
• Assured payment
• Online transactions
• More business
• No need to secure
the cash
To Payment network
• Fees on every
transaction
• Forex conversion
charges
• Global acceptance

16. Disadvantages
To cardholder
• Online fraud
• Physical loss of
card
• Overuse
• Hidden Costs
• High Interest
Rate
• Min Due Trap
To Merchant
• Service charge
of 2.5%
• Delay in
receiving
payment vis a vis
cash
To bank
• Additional staff
• Fraud
• Bad Debt

17. ICICI Credit
cards
• MakeMyTrip ICICI Bank Signature
Credit Card
• MakeMyTrip ICICI Bank Platinum
Credit Card
• Unifare Mumbai Metro Cards
• Emirates
• Accelero
Travel cards
• HPCL Coral Visa Card
• HPCL Super Saver Credit Card
Fuel Payment Cards

18. ICICI Cards
• Platinum Credit Card
• Coral Credit Card
• Rubyx Credit Card
• Sapphiro Credit Card
• Expressions Card
Lifestyle cards
• Manchester United Platinum Credit
Card
• Manchester United Signature Credit
Card
• Chennai Super Kings Credit Card
Sports cards

19. New RBI
Guidelines
1. The objective is to improve security and formulate convenience of card transactions
2. After issuing or re-issuing, all debit or credit cards will be enabled only for ATMs and Point
of Sale (PoS) devices across India
3. In case a cardholder wishes to use credit and debit card outside India, he/she will be
required to apply for the same at the bank
4. Banks will be allowed to deactivate and reissue currently active cards in case any kind of
risk is ascertained
5. Online payment service on all debit and credit cards which have never been used for
online or contactless transactions in India and internationally will be disabled by the issuing
banks or card companies
6. Card users will be allowed to set preferences for international and online transactions as
well as for contactless card transactions
7. Cardholders will now be able to switch on or off the debit and credit cards for facilities like
ATM, NFC, POS, eCommerce transactions, etc.
8. Cardholders will be allowed to set separate spend limit on their debit/credit cards for each
service
9. Several banks have issued cards with near field communication (NFC) technology. This is
a contactless card which does not need to be swiped or inserted for the transaction. NFC’s
maximum spending limit is set at Rs. 2000/day without the use of a PIN. After new
guidelines, cardholders will be able to enable or disable NFC

20. Questions