Working of a credit card February 1, 2008
Posted by Chetan in : Banking , add a commentCredit card is termed as a form of payment which is issued, not in the form of money notes or coins, but a plastic form of card is used for transactions. Credit cards can be used by the account holders, to draw money from the ATM centers, or at any merchant shopping places at which accept credit cards to receive the payment. There is a pre-established credit limit issued by a merchant, higher than which a credit card holder can not pay by the credit card.
What use credit cards comes to when buying something in a mall - When a purchase is done by a credit card user, he should agree and accept to pay the bills via the Credit card which he holds, and he ha to sign a credit card receipt. Record of the credit card details or Personal identification number is taken by the merchant to record the history of the credit card.
Electronic verification system is used to verify the credit card and its amount balance so that there is no unsufficient balance in the card at the time of purchase of a product.
Online shopping websites also accept credit cards to receive payment from a buyer, apart from other payment options like paypal, 2CO, moneybookers etc.
There is a statement sent to the card holder showing all the transactions made during the previous month. And a grace period is given to the card holder, before which he has to pay the interest for the credit.