apply for credit card
 
Best Overall Credit Cards BEST OVERALL CREDIT CARDS Bad / No Credit History BAD / NO CREDIT HISTORY Small Business Credit Cards SMALL BUSINESS CREDIT CARDS
Chase Bank Platinum Visa® First Premier Bank MasterCard®
Blue from American Express® First Premier Bank Gold Visa®
HSBC Platinum MasterCard® First Premier Bank Centennial Visa®
Credit Cards Home home Dictionary of Credit Card Terms glossary Affiliate Program affiliates Best Credit Cards Applications about us Low APR Credit Cards privacy statement All Credit Cards Offers terms and conditions credit Cadrs
FIND BY CATEGORY:
FIND BY BANK: FIND BY BRAND: FIND BY REWARD:

Find Best Credit Cards ENTER CARD NAME
find best card
FIND BEST CARDS
best overall credit cards Best Overall Cards
get instant approval credit cards Get Instant Approval
low apr credit cards Lowest APR Cards
no annual fee credit cards No Annual Fee Cards
0% intro apr credit cards
0% INTRO APR
0% on purchases credit cards 0% on Purchases
0% on balance transfers creditcards 0% on Balance Transfers

Find Best Credit Cards
LIMITED CREDIT
Credit Cards for Fair Credit Cards for Fair Credit
Credit Cards for Bad Credit Cards for Bad Credit
Credit Cards for No Credit History Cards for No Credit
Secured Credit Cards Secured Credit Cards

reward credit cards
REWARD CARDS
cash rebates credit cards Cash Rebates Cards
frequent flyer Frequent Flyer Cards
point reward credit cards Point Rewards Cards
gasoline credit cards Gasoline Credit Cards
hotel rewards credit cards Hotel Rewards Cards

student credit cards
STUDENT CARDS
student credit cards Student Credit Cards

business credit cards
BUSINESS CARDS
business credit cards Small Business Cards

business credit cards
FOREIGN RESIDENTS
canada credit cards Canada Credit Cards
uk credit cards UK Credit Cards
uk credit cards Belgium Credit Cards
business credit cards
FEATURES
credit card debt calculator Credit Card Debt Calculator
Choose credit cards to compare Credit Cards Compare Tool
free credit report Free Credit Report
free credit score Free Credit Score
reward programs guide Reward Programs Guide

| | |
 

Find Best Credit Cards Credit Cards - LIBRARY  
Facts & Legal
       
Credit Card Basics
Credit Card Terms
Common Sense and Law About Credit Cards
Filing a Credit Complain
Everything About Creditors
The Evolution of Bank Cards
Current Credit Card Products
How Visa System Works
Credit Cards: How It Works
Credit Cards: Profits and Losses
Credit Cards: History and Controversy
Credit Cards: Numbering
Types of Credit Cards
Prepaid Credit Card
Things to know about credit cards
Credit Cards - Those Who Need Can't Get



  How Visa System Vorks

 



Use Your Cash Advance Wisely

Using your credit card for purchasing new clothes or latest DVDs - these products are yours to keep. You can use it for years to come and pay for them over a few months if you wish. But using your credit card for taking cash advance to pay for daily purchases like food and gasoline you will pay much more for that after. And you better give it all back as soon as possible. Read more...

Background

The Visa bank credit card system is composed of three separate entities, Visa (the association), the issuer (bank that issues credit cards), and the acquirer (banks that sign merchants). While both issuers and acquirers are members of the association, each issuer and acquirer is a separate business entity. The Visa bank members are competitors and vie with each other for cardholders and/or the merchants business.



Tips for managing your credit cards

Today`s credit cards always offer a wide range of different features, including frequent flier miles or programs that earn points toward a hotel or car, and cards that make donations for charity organizations. Other cards worth include extended warranty coverage, car-rental insurance coverage, trip cancellation coverage, etc. Read more...

Issuing Banks

or issuer s, are the financial institutions that issue credit cards to individual consumers. These banks carry the credit card loan or, in the case of debit credit cards, maintain the related personal account.

Acquiring

Banks - or acquirer s, are financial institutions that offer accounts to merchants that allow the merchant to accept bankcards. These banks process and settle credit card sales transactions for their merchant clients. These banks are also referred to as a merchant bank.



Lower APR Rate

Everyone loves a bargain? Sometimes it is true, but not always. However, nobody likes to find out that they are paying too much for their credit card in interest and fees. Who doesn`t want to get the lowest APR possible? It is good that you think your credit card`s rate too high, but it is not enough to lower it. If you`re paying too much in interest, you need to take action immediately. Read more...

Visa

An association of member banks that provides a global network for value exchange. Visa does this by providing a worldwide telecommunications and settlement system, setting operating standards, and developing new products. Visa itself does not deal or directly serve consumers or merchants; hence, VISA DOES NOT ISSUE credit cards NOR MAINTAIN MERCHANT ACCOUNTS.

Bankcard processing is a communications system, with banks at both ends and Visa in the middle. A single bank can serve as both a credit card-issuing and acquiring bank; but, for the moment, we will treat the functions as separate.



Forms of Currency for Traveling

There are several types of currency that you may use while traveling. If you make right choice and take suitable form of currency with you, you can receive the best bang for your travel budget. There are three major kinds of currency travelers carry abroad: checks, credit cards and ATM cards. The option you choose should allow you get the best exchange rates and offer as much convenience and safety as possible. Each form of currency has number of advantages and disadvantages, so you should carefully measure it before making choice. Read more...

As the term implies, the credit card-Issuer will, after receiving an application from an individual, family, or company, investigate their credit history and upon approval, issue a credit card. The credit cards have specified payment terms, may involve an annual fee and impose interest if the entire balance is not paid within a specified time, usually 20 days from the date of billing. The credit cards also have credit limits, ranging from a few hundred dollars, up to many thousands.

The Acquirer will arrange to accept bankcard charges from the merchant, charging a fee, generally a flat percentage, for the service. Each bank is free to determine its own fee to each merchant. This would include authorization processing and settlement processing. In a case where the merchants and cardholder use the same bank and/or processing centre, certain of the steps are short-circuited, and the cost to the bank is less. The most significant cost involved in the process is interchang e .



Ways of improving a FICO score

The method used to calculate your credit score is just a complicated mathematic formula. That means you can play it`s variables to achieve the necessary value of your credit score. There are several approaches of solving this complicated equation… Read more...

When the cardholder uses their credit card to pay for goods or services, the merchant swipes the credit card through the Point of Sale terminal or imprints the credit card's information on a sales slip. The sales slip is then completed, with the date and amount of the sale and other pertinent information entered. The merchant then has the customer sign the slip, either the electronic printout or the sales slip, and confirms the validity of the credit card. The customer receives one slip while the merchant retains one for their records and sends one or more copies to the bank.

The merchant bank then transmits the sales information (either enters the data of the sale or the electronic swipe information) to Visa. Visa then assures that the account number is a legitimate number and is not “blocked”. This information, the account number, transaction amount and expiration date, are then forwarded to the issuing bank. The information can be verified and matched to the credit card verification value (CVV) and is then returned to the merchant.



Credit Bureaus

Credit Bureaus access information about your payments right from the companies you are applying for credit card credit with, or from state agencies (the legal court system). To create your credit report they use this historical information about some of your financial transactions. This consumer report reveals complete information about you, including where you live and work, whether your bills were paid on time and if you`ve ever been sued, arrested or filed for bankruptcy. Read more...

Clearing

Is the process by which the sales transaction information is gathered, sorted and forwarded to the issuing bank by Visa. Settlement is the crediting of the merchant bank for the sale and debiting the issuing bank for the transaction. The merchant bank will then forward funds to the merchant account. The issuing bank will store the sales transaction information until the end of their billing cycle. At that time a statement, the cardholder billing statement, is prepared and mailed to the cardholder for payment.

POINT-OF-SALE (POS)

POS Terminals

The POS terminal performs a variety of functions at the retail point of sale.

Terminal applications include cheque guarantee, cheque verification, credit card authorisation, data capture, and even inventory control.

Essentially, cheque guarantee, cheque verification, and credit card authorization permit a merchant to obtain immediate approval in order to honour a customer's cheque or credit card. The more sophisticated systems provide credit card data capture, by which sales information is actually captured at the point of sale, thereby eliminating the need for the merchant to gather paper sales drafts and deliver them to the bank for credit.



Credit Bureau - Credit Report

Firs of the most important steps to good credit history is ordering your credit report once a year and knowing your credit reporting rights. The federal FCRA (Fair Credit Reporting Act) as well as state laws restrict the access to your credit records. Read more...

THE AUTHORISATION PROCESS

Model credit card Transaction

Authorisation

A credit card transaction begins when the cardholder presents his or her credit card to a merchant for the purchase of goods or services. The merchant is required to follow established procedures:

Obtain an authorisation for the sale

Obtain the imprint of the credit card, either manually or electronically

Obtain the signature of the cardholder and compare to that on the credit card.

In order to prevent use of credit cards by unauthorised persons and the abuse of credit by the cardholder, both Visa and MasterCard have established data banks in regional authorisation centres. These data banks are linked electronically, and can quickly be accessed worldwide via telephone lines.



Identity Theft Claimed Seven Million Victims

Practically all victims of identity theft don`t reveal this kind of crime for a year or even more. That may happen only after something goes really wrong, because smart thieves used to shield their actions by giving different address when they apply for credit card in a victim`s name. Typically, federal laws cover all losses to consumers, but even in common cases, it takes more than two years to clear victim`s names. Read more...

If the transaction amount exceeds the merchant floor limit, the merchant is required to contact its authorisation centre to obtain an approval for the transaction amount, or swipe the credit card through an electronic terminal, referred to as a POS Terminal. Before granting the approval, the authorisation centre checks the Exception (Negative) file which contains all the statused accounts such as lost, stolen, counterfeit, and credit problems. The account number used for the transaction is matched against those accounts listed in the Exception File. If the account number is listed in the Exception File, the transaction is declined and a response is given to the merchant, which could include instruction to retain the credit card. If the transaction is approved, then an authorisation code is provided to the merchant and either written on the sales draft or printed on the sales draft in the case of an electronic terminal.

The Issuing bank generally provides the authorization code, after the information has been switched from the merchant to the Issuer via the Visa network. If the Issuer is not available for some reason, Visa will perform the checks for the Issuer.

The issuer is then notified at a later date of the transaction.

Authorisation Responses

Electronic authorisations usually only take seconds and provide an excellent protection against fraud. It is important to remember that a negative electronic response in itself does not indicate a crime has been committed or constitutes sufficient probable cause to make an arrest. The authorisation responses that could be received by a merchant are as follows:



Developing Measures to Control Credit Card Fraud

New measures must be developed to control the worldwide increase in credit card frauds, especially Internet fraud. These kind of thieves conceal their identities by using multiple hosts and networks to reach their victims. An effort of tracing them to their point of origin through multiple organizations and across multiple countries is the task of extreme difficulty. Main feature of online credit card fraud is a its facelessness when a thief does not have to be near or even know his victims. Read more...

“Approved”

The transaction is accepted, the most common response.

“Declined” or “credit card Not Accepted”

The credit card issuer will not approve the purchase. In this case, the merchant is directed to return the credit card to the customer and refer them to their issuing bank if they need any further information. This response would not be an indication of fraud.

“Refer” (“ Call or Call Centre”)

The credit card issuer is requesting the merchant to call their voice authorisation centre.

The issuer wants more information before they will approve the transaction.

“Pick Up ”

The credit card issuer wants the merchant to keep the credit card. This is most likely due to the credit card being blocked on the Exception File for lost/stolen; or that this cardholder has not paid his bill or is over his credit limit. Even this response should not be the basis for an arrest without fur ther information.

Authorisation methods

The authorisation can be obtained by phone, POS terminal or ARU Audio Response Unit, using a touch tone phone). The merchant then enters the authorisation code on the sales slip. They must also authorise a transaction when the credit card is not present, as in mail or phone orders.



Credit Card Fraud Increases Worldwide

Unauthorized credit card use has been prevalent for many years. Until the mid-1980s, when the magnetic stripe data was not being swiped at the point-of-sale terminals, thieves were busy using stolen cards. Read more...

Some qualifying merchants utilising a POS terminal or the ARU system are required to authorise all transactions regardless of the dollar amount. This is called a zero floor limit. This authorisation process dramatically reduces fraud and qualifies the merchant bank for lower interchange rates, and therefore, a lower discount rate for the merchant.

Merchants utilising a POS terminal can send their transactions via telephone lines to a host computer where the information is captured and stored. This type of terminal is referred to as a draft capture terminal. At the end of a period, usually the business day, the sales data is transmitted to the host computer, which is subsequently transmitted to the acquiring bank (or their processor). At that point merchant bank account is credited with the sales and the sales information is transmitted to Visa.

PROCESSING:CLEARING and SETTLEMENT

Banks contract directly with merchants to process the merchant's credit card transactions. Every merchant that accepts Visa credit cards does so according to terms and conditions set forth in a merchant contract with the bank. The banks, referred to as acquirers or merchant banks, may have thousands of merchants signed at any given time. At the end of each day, the merchant batches (or totals) all credit card sales and transmits the data to the acquiring bank. The banks in turn credit the merchant accounts for the full amount of the sale less a discount (small fee) for handling the transactions.



Smart Cards Will Be Used in Multiple Applications

According to some prognosis - up to the year 2018, five billion smart cards will be issued by financial institutions in over 100 countries of the world covering up to 90 % of it`s population. The first generation of credit cards were cards with a magnetic stripe on it. That allowed to reduce processing costs and increased the security level. Adding a computer chip to the credit card making it a smart card was the next step in the credit cards security system progress. Right now smart cards are used mainly for telephones, transportation, healthcare, movies, fast food outlets, Internet and banking programs. Read more...

Each day the merchant bank electronically transmits all the credit card sales information to the Visa processing centre. During this process, called clearing, Visa sorts the credit card sales data by credit card issuing bank. Clearing is the term for moving the sales transaction information from the acquiring bank to the issuing bank. Like cheques that are cleared through local clearing houses, various banks and/or a national clearing system, credit cards are cleared through the Visa network.

At the same time clearing is taking place, a process called settlement is occurring. During this process, the merchant banks are credited for the merchant sales while the issuing banks are debited. The sales transaction information transmitted to each of the issuers is posted to the appropriate cardholder account.

The cardholder billing statement is then mailed, usually monthly, to the cardholder for payment. Millions of transactions are processed daily in this manner. The merchant bank is charged an "interchange fee” for being allowed to recover the sales amount for the merchant through the network. A portion of the interchange fee is then credited to the issuing bank to cover their cost and the risk associated with issuing credit cards.



Credit Cards Security Features

Due to fact that no security features were introduced in the design of credit cards, consequently, in a short period of time, counterfeit credit cards that were an extremely good imitation of the genuine items were manufactured and being widely used all over the world. Read more...

The difference between the interchange fee and the merchant's discount rate is the gross revenue received by the merchant bank. If a bank services both the merchant and the cardholder, the interchange fee is retained, therefore, lowering the banks cost. These transactions are called "on us" transactions.

CHARGEBACKS

After a sales slip has been processed, there are several reasons that a merchant's account may be debited for the sale and the merchant suffers the cost of the transaction. These debits are called chargebacks.

If the merchant complied with the prescribed procedures, they will receive payment for all credit card sales. In instances of fraud or questionable sales practices, the cardholder may dispute a charge on their billing statement with their issuing bank. The issuing bank would request a copy of the sales draft from the acquiring bank, which may have to obtain the copy from the merchant. The information would be reviewed by the issuing bank and based on specific regulations would determine whether or not the disputed transaction can be reversed. If a chargeback is granted, the issuing bank will be refunded the transaction amount. The acquiring bank may then deduct that amount from the merchant's account. However, if the merchant followed all required procedures a chargeback may not be allowed. The issuing bank then must settle the dispute with the cardholder and often, in the case of fraudulent use of the credit card, the issuing bank is the victim.

There are many reasons for chargebacks. However, if the merchant and their employees are properly trained, follow the procedures and inspect the credit card, almost all charge-backs can be avoided.



Credit Cards: Security and Fraud

Countless opportunities for fraud are the consequence of the low security of the credit card system. It creates a huge black stolen credit cards numbers market, which generally are used before the cards are reported to be stolen. The goal of the credit card issuing companies is not to eliminate fraud, but to "reduce it to manageable levels", when the total cost of fraud and fraud prevention are minimized. Read more...

 
 
 
 
 
recommended credit cards search center
Enter favorite brand:
Select your favorite brand from list:
hotels
airlines
gas stations
   
   
0% APR on Balance Transfers Credit Cards 0% APR on Balance Transfers
   
   
No Annual Fee Credit Cards No Annual Fee
   
   
| | | OUR PARTNERS
Acclaimnetwork.com
Credit-Land.com
Credit.com
Icommissions.com
Cardoffers.com

| | | ARTICLES
Tips to Apply
Tips to Use Cards
Improve Score
Bankruptcy
Credit Bureaus
Credit Card Frauds
Facts & Legal

| | |
   
   
 
2005-2011 ©