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Today credit cards have found massive usage due to the convenience they offer. Unlike the old days, you do not have to carry cash all the time. Whenever you go out for shopping, all you need to do is take your credit card with you, shop whatever you want, swipe your credit card at merchant’s machine and walk out with your purchase. Simple, isn't it? In addition to the simplicity, Card issuers offer many type of benefits like cash back, reward points, interest free credit and discount offers on purchases made at select stores. All this makes it attractive to use a credit card in lieu of cash for your purchases. If you are wondering, "What happens after I swipe my card at merchant’s machine?", then read on to know more.
When you hand over your credit card to the cashier to pay for your purchases he takes it and swipes it in the merchant's point of sale (POS) system. This system is connected to the merchant's bank via a communication link. This POS system helps in verifying your data by using an electronic verification system. The details verified include the validity of your card and the availability of sufficient balance on your credit card to pay for the purchases.
Once your details are transmitted to the merchant's bank, they are sent to your bank which then authorizes the payment if all the details are in order. This authorization is then sent to the merchant's bank, which then blocks the amount from your credit limit so as to reimburse it to the merchant later on. The authorization generates an approval code and is transmitted to the merchant. This code has to be keyed in by the cashier, after which two copies of charge slip are generated. This charge slip is your agreement to pay your issuing bank the amount of purchase. You then sign one copy of the charge slip and take the other one with you, along with your purchase.
Just like you, there are many others who use credit cards for their purchases. They also generate their own charge slips. All these charge slips are stored in batches and submitted by the merchant to his bank, once a day at the end of the working day. But remember, the nature of the relationship of the merchant with his bank is far different from your relation with your bank. It is called a merchant account and is actually a line of credit rather than a regular account. As per this contract, the bank agrees to undertake collection of payments on behalf of the merchant from his customers' banks. These payments are credited to the merchant's bank accounts after deducting the fees for all the services involved.
When the merchant deposits these batches in his bank, they are sent by the merchant's bank for clearing and settlement through the credit card association. This association charges your purchase amount to your bank and pays the amount to the merchant's bank. The merchant's bank then reimburses this amount to the merchant.
Your bank now charges your purchase amount to your credit card account. On the specific date, your bank will generate an account statement, listing all the credit and debit transactions in your account. If the debits are higher than credits, you have to pay the difference to your bank. You will also be given a due date, which is the last date by which you have to repay your bank in full. Failure to pay off this amount in full by due date will mean you will have to pay late fees as well as interest charges to the bank. These fees and charges can be very high, so be very careful.
Credit cards are a powerful credit tool to help you tide over short term financial requirements. However they must be used judiciously, as any misuse of the credit card can lead to high charges and make you fall into a debt trap, besides dropping your credit score drastically. So the watch word is - BE DISCIPLINED TO REPAY your credit card!
As the time is changing, the credit card providers have started tailoring their cards as per one’s requirements.
Amex is an American multinational financial service provider and a pioneer in offering credit cards with several attractive, irresistible variations. On offer are cards for shopping, lifestyle, travel, to access select lounges and other commonplace as well as luxurious benefits. The patron is entitled to earn reward and loyalty points that can easily be converted into selected products and services including air miles. Amex has proved itself to be a market leader and a visionary when it comes to credit cards and its usage in a developing market such as India. Also on offer are cash cards and traveller’s cheques from Amex, backed by a robust and responsive customer service initiative. A few of the highlights from Amex credit cards include zero lost card liability, attractive offers, variety of cards in its arsenal, 24 x 7 customer support, membership rewards, payback features, privileged loyalty points and an extra dose of travel through its air miles offer. Sounds too good to be true? Apply for the Amex credit card through BankBazaar and enjoy a refined banking experience.Citibank Credit card:
As a division of Citi Group- a multinational financial service provider, Citibank is an absolute behemoth when it comes to credit cards on the national and international level. Its services in terms of credit cards are loaded with attractive benefits, and offer an irresistible variety, from lifestyle cards, shopping cards, fuel and travel cards to innovative options like the prepaid cards and corporate cards. With a powerful presence in the credit card industry, Citibank has set the benchmark for its competitors to aspire for in terms of quality, availability, features and customer support. Features such as reward points, easy EMIs, instant loans for your financial obligations and insurance benefits on your card make the Citibank credit card a serious contender for your personal banking needs. Apply through Bank Bazaar and enjoy the advantages of a multifaceted credit card like never before.IndusInd Bank Credit card:
Founded in 1994, IndusInd Bank is the classic example of being ‘a novice by age but not by ability’. In fact, the bank boasts of one of the most recognizable line of credit cards with such products as the super-premium credit card, premium credit card, co- branded credit card and core credit card forming the crux of its offerings. Avail attractive features in terms of golf course membership, reward points, air miles conversion and instant loans for your financial needs, while being backed by an energetic and reliable banking institution. Find everything that can be expected from a world class credit card, and more, with IndusInd Bank credit card. Apply with BankBazaar today, and enjoy partnering a fast growing banking superstar through its attractive line of credit cards.SBI Credit Card:
SBI is one of the most trusted and in-demand banks in India that commands an attractive range of customer-centric and simplicity driven credit cards. Being a pioneer in almost all the product lines of commercial banking, SBI has also stepped very aggressively in the credit cards business. The products in SBI’s arsenal include premium cards, shopping and travel cards, classic cards and exclusive cards, each offering an amazing bonanza of benefits including free movie tickets, best in class concierge services, lounge access facilities, balance transfer facility, flexi payment in EMIs, reward points, online bills payment through pay net and a plethora of similar goodies. If you are looking for a reliable, comprehensive, simple and scalable credit card experience, SBI credit cards are the way to go. Apply through Bankbazaar today, and enjoy a different breed of credit card that was designed with you in mind.Axis Bank Credit cards:
Axis Bank is a progressive bank with an impressive line-up of banking products and services. The Axis Bank credit cards are in a class of their own- offering range, flexibility and simplicity. The products on offer include the ‘Infinite Range’, the ‘Signature Range’ with flexi payment and travel benefits that are applicable to its co-branded cards and ‘My Cards’- exclusively designed for you. Axis Bank cards offer you numerous luxurious as well as everyday benefits like dining offers, airport lounge access offers, cash back, online bills payment, EMI conversion facility and lots more. Get the Axis Bank credit card advantage and put a new spin to your personal banking. Apply through Bankbazaar today!HDFC Bank Credit cards:
HDFC Bank, a top bank in the Indian private sector has already rolled its sleeves to compete aggressively in the credit cards market. Every now and then, you will get acquainted with some special schemes and offers on HDFC bank credit cards, a range that includes featured cards, co-branded cards, super premium cards, professional cards, premium women, premium travel, premium card, regular card, commercial card and cash back card. Undoubtedly, the benefits and rewards attached to these cards are also pocket friendly like movie tickets, travel vouchers, golf club membership, air miles conversion, reward points, exclusive range of gifts, bill payment, EMI facility, cash-on-call, instant loans, dining offers and many more. Avail the HDFC Bank credit card advantage and enjoy a select range of exclusive offers and benefits. Apply through BankBazaar and be the proud owner of a HDFC bank credit card.
Coming as a boon for Micro, Small and Medium Enterprises, the West Bengal Chief Minister, Ms. Mamata Banerjee launched the Micro Business Credit Cards at a programme organized at the state secretariat recently. The Micro Business Credit Card will help small and medium entrepreneurs to easily avail cash credit or loans up to Rs 5 lakhs to set up or grow their businesses, without any collateral security requirements. Farmers and agriculturists will benefit from this as they can easily use the credit availed to start businesses.
The Chief Minister thanked the State Bank of India for extending their support to facilitate this venture. The West Bengal Government has sanctioned Rs 200 crores for this purpose and clearance processes related to Micro Business Credit Cards have been chalked out with clarity. She added that the Government has already started facilitation centers in Bardhaman, Durgapur, Asansol and other places in West Bengal and encouraged business entrepreneurs to actively participate in this new scheme. SBI confirmed that the West Bengal card launch will be a testing phase for the bank and they intend to start the same in other Indian states if this new attempt is a success.
27th February 2015
ICICI has recently launched its e-wallet called ‘Pockets’ for android devices which allows users to send money to anyone via email, mobile number, Facebook and even directly to their respective bank accounts. This makes an addendum to the existing Facebook banking application of the same name launched by ICICI in 2013.
The new Pockets application combines a digital wallet, a physical prepaid card and a basic savings bank account. This app can be downloaded by existing customers as well as by customers of other banks and they can add funds through any existing debit/credit card or bank account. Non-ICICI Customers will be charged NEFT transaction fees. The product features a virtual Visa card and a physical card is provided upon customer’s request.
26th February 2015
In what appears to be a gratifying move aimed at providing relief to millions of credit card users in the country, the Reserve Bank of India (RBI) has directed banks and NBFC’s to rework the interest rates billed on outstanding balance.
This decision was taken on 13th February 2015 during the release of “Annual Report of the Banking Ombudsman Scheme for the year 2013-2014”.The conference held in Mumbai was led by Governor, Raghu ram Rajan and attended by the top leadership from the Apex Bank and bank ombudsmen.
The report observed that interest charges on credit card balances was remarkably high when compared to other credit products or similar offerings in the market. The IBA (Indian Banks Association) has been entrusted with the task of issuing detailed guidelines in this regard. IBA has also been asked to forge a policy of “Zero Liability” with regards to customers falling prey to online fraudulent transactions.
Some of the key decisions taken during the conference were a direct result of increase in the numbers of complaints received by Ombudsman offices across the country in 2013/14.
19th February 2015
Global payment pioneer, MasterCard is serious about enhancing the phenomenon of cashless transactions in India. Still in a nascent stage, the market for card payments and similar cashless dealings has an enormous untapped potential in India, a factor that MasterCard hopes to exploit by incrementing its association with this country- one of the largest commercial marketplaces in the world. Pertaining to this, MasterCard has launched a technology hub with state-of-the-art facilities at Pune and Vadodara. These centers are MasterCard’s largest infrastructure commitments outside the United States. The Pune facility is slated to target the company’s processing business, while the Vadodara facility will focus on digital wallets. MasterCard views India as a priority market- accounting for 10% of its global workforce and recipient of an investment of $250 million in 2014.
17th February 2015
What could an awry credit history cost you, beside some late fees? Well, now, it can cost you that job you’ve been trying for! As part of their recruiting process, leading private and foreign banks in India will be verifying credit records, not only for senior positions but also positions across the firm. With help from organizations like Credit Information Bureau Ltd. (Cibil), this practice is soon to become a part of the standard pre-employment process among banks looking to hire new candidates. How to avoid earning a bad credit score? Ensure that you have settled all loan amounts or credit card dues and neither you nor a co-borrower is a defaulter on your credit interest / principle.
9th February 2015