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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.
With more consumers adapting to changing payment systems, credit cards are facing stiff competition from mobile payment services such as Paytm. The mobile wallet service provider’s user base is estimated to be an admirable 20 million, which is higher than the total number of credit cards issued in the entire country. Mobile wallets, let users transact with merchants via their mobile phones. This is especially beneficial to those without credit cards or access to internet banking. In fact, most users of Paytm services are from Tier-II or Tier-III towns.
In some cases, mobile wallet services are innovatively used to service those people without any kind of banking relationship at all. Merchants, usually shop-keepers or traders, create mobile wallets in return for cash from those without bank accounts, thereby increasing the service provider’s user base.
Paytm processes transactions to the tune of $600 million dollars annually. Transaction fees vary between 1% and 5% with an average transaction value of Rs.300. Other providers of mobile wallet services in the country are MobiKwik, Oxigen and Citrus. With an increasing number of investors evincing interest in these companies, it can be expected that credit cards companies will face tougher competition than at present.
30th January 2015
In a novel idea to improve payment systems for purchase of apps, Idea Cellular and Microsoft have introduced a billing service whereby purchases from the Windows Store will be directly charged to subscribers’ post-paid bills or adjusted against pre-paid amounts. This will eliminate the need for credit cards or other forms of electronic payments. By making it easier and more convenient for subscribers to make purchases, more paid-apps are expected to be downloaded. Purchase values will currently be limited to Rs.300 for each app bought. Apps will have to be developed to be priced accordingly.
This is a first-of-its-kind facility in India and is expected to work well given the low penetration of credit cards in Indian markets. Currently the credit card user-base stands at 19 million. A large number of people are also not connected to internet banking facilities making online payments a challenge. Idea Cellular hopes to offer strong competition to rivals Vodafone and Airtel through this service. At present, the mobile service provider has about 34 million subscribers to its data packages. The challenge in rolling out a service such as this, however, lies in the revenue distribution model which is yet to be finalised.
22nd January 2015
The Hyderabad police have alerted credit and debit card users to the growing number of cases involving identity theft. With over a 100 cases booked last year alone, police are reiterating the need for improved vigilance. Most cases involved users receiving spurious calls from people claiming to be agents of cardholders’ banks, requesting vital information such as OTPs, Pin Numbers, Names and Card Numbers, in order to make supposed updates or changes to holders’ accounts. Police are yet to identify how cardholders’ contact information was leaked to these individuals. The possibility of banks’ databases being hacked into has not been ruled out, raising serious cyber security issues. Police are also considering information leaks by bank employees. Banks generally do not request account information or card details from customers and have once again stated that cardholders should be wary of such requests.
20th January 2015
ICICI Bank, noted for leading improvements in banking operations, through technology-driven services such as internet and touch banking, has introduced new products as part of its contactless payment system. viz. the Coral Contactless Credit Card and the Expressions Wave Debit Cards
Based on near-field communication (NFC) technology, these cards, introduced in Gurgaon, Mumbai and Hyderabad, require no contact with point of sales machines. This results in benefits such as shorter transaction times and improved security since customers do not have to hand over their cards at check-out counters.
ICICI Bank has set up machines at various outlets to be used for contactless payments. However, these cards can also be used in the traditional manner at outlets that are not enabled with the new system. This system is most beneficial at establishments that require quick payment processing e.g. gas stations or cafes etc.
13th January 2015
In a welcome move to commuters, over 50 banks, led by ICICI Bank and SBI, have been roped in to provide top-up or recharge facilities on Mumbai Metro smart cards. Launched on Dec 25th, 2014, this facility, offered at zero cost, is available online as part of the banks’ internet banking services. Smart cards can also be topped up using credit or debit cards. Additionally, commuters can check balances on their smart cards through this service. Mumbai Metro aims to eliminate the hassle of long queues at stations where commuters are currently required to recharge cards. This will serve to not only save travel time but also positively enhance travel experiences.
7th January 2015