Credit cards are given once an account has been approved by the credit provider, after which cardholders can use it to make purchases at shops accepting that card. When a purchase is made, the credit card user agrees to pay back the issuer. The person having credit card shows his will to pay by signing a receipt with a record of the card details and indicating the sum to be paid or by entering a personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the internet, known as a 'Card/Card holder Not Present' (CNP) transaction. Electronic checking mechanism permits the vendors to check if the card is valid and the credit card customer has enough credit to cover the purchase in a few seconds, permitting the check to happen at time of purchase. Data from the card is obtained from a magnetic stripe which is called PIN, and more technically is an EMV card. Other types of verification systems are used by e-Commerce merchants to determine if the user's account is valid and able to accept the charge.
It involves the cardholders providing additional information, such as the security code printed at the back of the card, or the address of the cardholders. Credit card issuers usually exempt interest charges if the balance is paid in full every month, but normally it charges full interest on the entire outstanding balance since the date of each purchase if the entire sum is not paid.
The credit card interest rates have different types of interest rates starting from 7 to 35% depending largely upon the bank's risk evaluation methods and the borrower's credit background. Europe has much higher interest rates, about 50% over that of most developing nations, which average about 200%. In Brazil bank-issued Visa or Master card to a new account holder can have annual interest as high as 240% even though inflation seems under control at around 6% per annum.
RBI has made life convenient for credit card users. It has come up with a host of criteria for financial institutions and other companies that manufacture cards. The new instruction says that banks should not charge excessive credit card interest rates and must define a rate of interest. RBI also wants banks to have a system to provide credit card customers their monthly statement.
Financial institutions are warned against sending statements after a gap of a few years and demanding payments. RBI has slammed the practice of issuing unsolicited credit cards and has regulated stringent penalties on banks indulging in any mal-practices.
Let us take a look at the best credit cards in India which differ from bank to bank and some of them are visa card,master card, domestic, international, gold credit card, classic credit card,platinum credit card, sterling silver card etc. Many people feel that ICICI has the best credit cards with range of Signature Credit Card, Ascent American, Express card and ICICI bank Titanium Credit Card.
Thus it is clear that credit cards are the latest fashion tools in the word of finance and economics. Their arrival has infused a new spirit in the otherwise boring areas of retailing and shopping. Their arrival has facilitated the business to a very large extent.
Posts
0 comments:
Post a Comment