Plastic Money 1

PLASTIC MONEY
Plastic money Page 1

INDEX
1. Meaning of credit
1.1 Definition
1.2 credit card
2. Origin of credit card
3. Choosing the credit card

3.1 questions to be considered
3.2 features of credit card

3.3 how does credit card works
3.4 benefits to consumers and merchant
3.5 how many credit cards have been issued in India
3.6 types of credit cards

3.7 offers provided by different credit card banks
3.8 what if credit card is lost or stolen
3.9 understanding credit card cost and terms
3.10 various cost
3.11 travel and entertainment cards
3.12 advantage and disadvantages

4. Origin of debit card
4.1 histories
4.2 types of debit cards
4.3 advantages and disadvantages of debit card
4.4 difference between debit card and credit card
4.5 tips for responsible use debit cards
5. Research analysis
6. Limitations of credit card

6.1 problems
6.2 frauds
7. Suggestions
7.1 Conclusion
8. Bibliography

Meaning of credit
Credit is the provision of resources (such as granting a loan) by one party to

another party where that second party does not reimburse the first party
immediately, thereby generating a debt, and instead arranges either to repay
or return those resources (or material(s) of equal value) at a later date. It is
any form of deferred payment. The first party is called a creditor, also
known as a lender, while the second party is called a debtor, also known as
a borrower.
Definition
A contractual agreement in which a borrower receives something
of value now and agrees to repay the lender at some later date. When
a consumer purchases something using a credit card, they are buying on
credit (receiving the item at that time, and paying back the credit
card company month by month). Any time when an
individual finances something with a loan (such as an automobile or
a house) they are using credit in that situation as well.

Credit card
A credit card is part of a system of payments named after the
small plastic card issued to users of the system. It is a card entitling its
holder to buy goods and services based on the holder's promise to pay for
these goods and services. The issuer of the card grants a line of credit to
the consumer (or the user) from which the user can borrow money for
payment to a merchant or as a cash advance to the user.
A credit card is different from a charge card, where a charge card requires
the balance to be paid in full each month. In contrast, credit cards allow the
consumers to 'revolve' their balance, at the cost of having interest charged.
Most credit cards are issued by local banks or credit unions, and are the
shape and size specified by the ISO/IEC 7810 standard as ID-1.

ORIGIN OF CREDIT CARDS
The first credit card was issued in 1951.Credit was first used in Assyria,
Babylon and Egypt 3000 years ago. The bill of exchange - the forerunner of
banknotes - was established in the 14th century. Debts were settled by one-
third cash and two-thirds bill of exchange. Paper money followed only in the
17th century.
The first advertisement for credit was placed in 1730 by Christopher

Thornton, who offered furniture that could be paid off weekly.
From the 18th century until the early part of the 20th, tallymen sold clothes
in return for small weekly payments. They were called "tallymen" because
they kept a record or tally of what people had bought on a wooden stick.
One side of the stick was marked with notches to represent the amount of
debt and the other side was a record of payments. In the 1920s, a shopper's
plate - a "buy now, pay later" system - was introduced in the USA. It could
only be used in the shops which issued it.
In 1950, Diners Club and American Express launched their charge cards in
the USA, the first "plastic money". In 1951, Diners Club issued the first
credit card to 200 customers who could use it at 27 restaurants in New
York. But it was only until the establishment of standards for the magnetic
strip in 1970 that the credit card became part of the information age.
The first use of magnetic stripes on cards was in the early 1960's, when the
London Transit Authority installed a magnetic stripe system. San Francisco
Bay Area Rapid Transit installed a paper based ticket the same size as the
credit cards in the late 1960's.

The word credit comes from Latin, meaning "trust".
Cheques (checks) came into use in 1875.
Banking has evolved a long way from the days of the medieval
moneylenders counting coins on the bench to the present scenario, where it
is hard to trace the trail of money from the beginning to the end.
The trail starts right from the small saver leaving a few rupees in his local
bank to the billions of rupee loans raised by a syndicate banks and financial
institutions, capable of financing projects in any country in the world. Still,
these banking majors are heavily dependent upon their retail home base of
savers and borrowers. Most of the bankers began focusing on this retail
market segment as global competition intensified in late seventies and early
eighties.
Credit cards, one of the banking products that cater to the needs of retail
segment has seen its number grow in geometric progression in recent years.
This growth has been strongly supported by the development in the field of
technology, without which this could not have been possible.
The history of phenomenal growth in the credit card segment traces way
back to in 1950, the time when Diners Club was established. The card
provided select members with credit at 22 restaurants in New York and
collected a commission for paying the bills promptly. The credit card
industry got a further boost with the arrival of American Express in the arena
in 1958. American Express began selling their card as a prestige to hotels,
restaurants, shops or airlines in America and slowly expanded the network
across the world.

The success of these two players attracted many other banks to join the
credit card business. The entire breed of new players saw a fresh opportunity
of granting unsecured loans at high interest rates to those credit cardholders
who did not pay their bills on time. These banks were not so concerned with
collecting commissions from shops but were thriving on high interest
income from those who did not pay their bills on time.
Starting from Diners Club, some 50 years ago, the card industry has been
growing with a rapid pace world over and so has been the growth in the
domestic card industry. With only two players in domestic card industry,
HSBC and Citibank in the early 80s, the number swelled to over 25 in the
year 2001. Credit cards in India, made their debut in 1981, and are on the
verge of an unprecedented boom. Between 1987 and 2001, the market has
virtually grown to over 4 million cards with over 25-30% of compounded
annual growth in new cardholders base.
Its not that only the card numbers have increased, but even the types of cards
on offer have seen a surge. Today the domestic card industry is flooded with
different types of cards ranging from gold, silver, global, co-branded credit
cards, smart to secure,. the list is endless. Foreign banks have shouldered the
major responsibility of increasing the card base and adding value-added
services to the card products in the past. This is also evident from the fact
that the market share of these foreign banks is estimated to be well over
70%. But the scenario has changed dramatically in the last of couple of years
with the entry of State Bank of India (SBI), a domestic major in the banking
sector. More and more nationalized banks and private sector banks like
ICICI and HDFC Bank are aggressively launching credit card with value
added features.
There is immense growth potential in the domestic card industry. A glance at
the Indian population reveals that Indias middle/upper middle class (target
segment) represents a population of over 10 m. There are only 2 to 3 m
cardholders, each possessing an average of 2 cards. This is a very low figure
given Indias huge middle to upper class population. There is no doubt that
the domestic card industry has to yet to mature and offers significant long-
term growth potential.
Given the lack of maturity of the domestic card industry, its growth will
depend upon building core retail business, with more sophisticated products.
In the expansion of domestic credit card market, the existing foreign players,
SBI, other nationalized banks and the new domestic private sector banks are
expected to play important role with complementary strategies.
Foreign banks with the advantage of technology and industry experience are
expected to concentrate on increasing card spending and customer loyalty in
the major cities. SBI, on the other hand is expected to capitalize its superior
distribution network to expand card acceptance in the smaller towns. The
new private sector banks would have the opportunity to capture significant
market share by combining the strengths of foreign banks and nationalised
bank like SBI.
A credit card is a system of payment named after the small plastic card
issued to users of the system. In the case of credit cards, the issuer lends
money to the consumer (or the user) to be paid later to the merchant. It is
different from a charge card, which requires the balance to be paid in full
each month. In contrast, credit cards allow the consumers to 'revolve' their
balance, at the cost of having interest charged

CHOOSING THE CREDIT CARDS
QUESTINS TO BE CONSIDERED
How are you going to use the credit card?
Do you plan to pay your balance in full each month? If so, a charge card
might be the best option. Will you be using your card for balance transfers?
You should look for a card with a low interest rate on balance transfers. Do
you plan to carry a balance from one month to the next? A credit card with a
low interest rate is ideal.
Whats the annual percentage rate?
The annual percentage rate, or APR, is the percentage applied to balances

that you carry beyond the grace period. The higher the APR, the higher
your finance charge will be when you have a revolving balance. Most credit
cards have a different APR for purchases, balance transfers, and cash
advances. Make sure you know the APR for each.
How long is the grace period?
The grace period is the amount of time you have to pay your balance in full
before a finance charge is added. The period is usually expressed in days
from the billing date, i.e. 28 days from the billing date. Longer grace
periods are better because they give you more time to pay your bill without
incurring a cost for the convenience of using credit. If you already have a
balance on the credit card, new purchases may not have a grace period.

What are the fees?
You should know the amount of any fees and the circumstances under which
the fees are applied. The most common types of fees include: annual fee, late
fee, and over-the-limit fee. You may also be assessed fees for paying your
account over the phone, requesting additional copies of your statement, or
for having your check returned.
Common Credit Card Fees
How is the finance charge calculated?
The credit card companys method of calculating the finance charge has an
impact on the amount of the charge. Some methods consider only the current
months balance while others consider the current and previous months
balances. New purchases may or may not be included in the calculation.
Common methods of calculating your finance charge include the average
daily balance and double billing cycle method. Of these two, the average
daily balance method is the least expensive.
Double Billing Cycle Revealed
What is the credit limit?
The credit limit influences your purchasing power. If youre new to credit,
its wise to start out with a low credit limit to become familiar with
responsible credit card habits. Some financial situations allow a higher credit
limit. Be wary of no-limit credit cards because they can sometimes look

maxed out on your credit report. This can have a negative effect on your
credit score.
The Key To Building A Good Credit History
What are the rewards?
Some credit cards offer rewards for using your credit card. Make sure you
fully understand the reward structure and the amount of purchases you have
to make to receive the reward.

Features of a credit card
Credit Limit
Your credit limit is the maximum amount you can charge on the card. This
includes purchases, balance transfers, cash advances, finance charges, and
fees. When you go over your credit limit, your creditor may charge a fee,
an over-the-limit fee.
Balance
The balance on your credit card at any given time is the total of your
purchases, finance charges, and credit card fees. The higher your credit card
balance, the lower the available credit you have to make additional
purchases, unless you have a charge card or no-limit credit card. Higher
balances raise your credit utilization and lower your credit score.
APR
The annual percentage rate (APR) is the interest rate applied a balance
carried beyond the grace period. Credit cards can have different APRs for
different types of balances, e.g. balance transfers or purchases. Balance
transfers and cash advances usually have higher APRs than for purchases.
Your APR may increase when you're late on your payment to a particular
creditor, and other creditors if your card agreement includes a universal
default clause.
APRs can be fixed or variable. A fixed APR can change, but the creditor
must inform you in writing before changing the rate. A variable
APR changes from time to time.
Grace Period
The grace period is the amount of time you have to pay your balance in full
before a finance charge is applied to your purchase. If you carried a balance
from the previous month, you may not have a grace period for your new
purchases. In addition, balance transfers and cash advances typically do not
have a grace period.
When balances don't have an applicable grace period, interest is applied

right away.
To find out the length of the grace period refer to the credit card application
or your credit card agreement. Your monthly statements should also include
the number of days in the grace period.
Finance Charge
The finance charge is the cost of carrying a balance. Finance charges are
computed using your balance and APR.
Creditors use different methods for calculating your finance charge. They
may consider one or two billing cycles, use an adjusted, average, or previous
month's balance, and may include new purchases. The least expensive to you
is the average daily balance method excluding new purchases.
In cases where you must pay finance charge (no grace period applies), your
creditor may assess a minimum finance charge. If your calculated finance
charge is less than the minimum, you must pay the minimum.
Incentives and Rewards
Some credit cards offer rewards and incentives for using their credit card.
Rewards come in several different forms: cash back, points to redeem, and
discounts.
Credit Card Fees

There are different situations that you might incur credit card fees. Annual
fee, finance charge, late fee, and over-the-limit fee are some of the most
common fees.

How does a credit card work?
Credit cards are issued after an account has been approved by the credit
provider, after which cardholders can use it to make purchases at merchants
accepting that card.
When a purchase is made, the credit card user agrees to pay the card issuer.
The cardholder indicates his/her consent to pay, by signing a receipt with a
record of the card details and indicating the amount 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/Cardholder Not Present' (CNP) transaction.
Electronic verification systems allow merchants to verify that the card is

valid and the credit card customer has sufficient credit to cover the purchase
in a few seconds, allowing the verification to happen at time of purchase.
The verification is performed using a credit card payment terminal or Point
of Sale (POS) system with a communications link to the merchant's
acquiring bank. Data from the card is obtained from a magnetic stripe or
chip on the card; the latter system is in the United Kingdom and Ireland
commonly known as Chip and PIN, but is more technically an EMV card.
Other variations of verification systems are used by ecommerce merchants

to determine if the user's account is valid and able to accept the charge.
These will typically involve the cardholder providing additional information,
such as the security code printed on the back of the card, or the address of
the cardholder.

Each month, the credit card user is sent a statement indicating the purchases
undertaken with the card, any outstanding fees, and the total amount owed.
After receiving the statement, the cardholder may dispute any charges that
he or she thinks are incorrect (see Fair Credit Billing Act for details of the
US regulations). Otherwise, the cardholder must pay a defined minimum
proportion of the bill by a due date, or may choose to pay a higher amount
up to the entire amount owed. The credit provider charges interest on the
amount owed (typically at a much higher rate than most other forms of
debt). Some financial institutions can arrange for automatic payments to be
deducted from the user's bank accounts, thus avoiding late payment
altogether as long as the cardholder has sufficient funds.

BENEFITS TO CONSUMERS & MERCHANT:-
Because of intense competition in the credit card industry, credit card
providers often offer incentives such as frequent flyer points, gift
certificates, or cash back (typically up to 1 percent based on total purchases)
to try to attract customers to their programs.
Low interest credit cards or even 0% interest credit cards are available. The
only downside to consumers is that the period of low interest credit cards is
limited to a fixed term, usually between 6 and 12 months after which a
higher rate is charged. However, services are available which alert credit
card holders when their low interest period is due to expire. Most such
services charge a monthly or annual fee.
For merchants, a credit card transaction is often more secure than other
forms of payment, such as checks, because the issuing bank commits to pay
the merchant the moment the transaction is authorized, regardless of whether
the consumer defaults on the credit card payment (except for legitimate
disputes, which are discussed below, and can result in charges back to the
merchant). In most cases, cards are even more secure than cash, because
they discourage theft by the merchant's employees and reduce the amount of
cash on the premises. Prior to credit cards, each merchant had to evaluate
each customer's credit history before extending credit. That task is now
performed by the banks which assume the credit risk.
For each purchase, the bank charges the merchant a commission (discount
fee) for this service and there may be a certain delay before the agreed
payment is received by the merchant. The commission is often a percentage

of the transaction amount, plus a fixed fee. In addition, a merchant may be
penalized or have their ability to receive payment using that credit card
restricted if there are too many cancellations or reversals of charges as a
result of disputes. Some small merchants require credit purchases to have a
minimum amount (usually between $5 and $10) to compensate for the
transaction costs, though this is not always allowed by the credit card
consortium.
In some countries, for example the Nordic countries, banks guarantee

payment on stolen cards only if an ID card is checked and the ID card
number/civic registration number is written down on the receipt together
with the signature. In these countries merchants therefore usually ask for ID.
Non-Nordic citizens, who are unlikely to possess a Nordic ID card or driving
license, will instead have to show their passport, and the passport number
will be written down on the receipt, sometimes together with other
information. Some shops use the card's PIN for identification, and in that
case showing an ID card is not necessary.

HOW MANY CREDIT CARDS HAVE BEEN
ISSUED IN INDIA?
In India there are around 25 million credit cards from which ICICI
Bank is the largest competitor with 8.5 million cards issued. Citibank,
SBI-GE Card and HDFC Bank are the other prominent players in the
sector.
The lifestyle of the people has changed so as the spending power. From
traveling to dining to paying small bills to apparel purchases; they pay
everything through their credit cards. Fuel accounts of a very small amount
of these credit purchases, unlike what is usually believed, as most of it is
done through debit cards.
According to the reports of the credit card companies the consumers are
spending Rs 50,000 crores annually which is expected to grow at 50 percent
over the next four to five years. Experts are of a view that with changing
lifestyle this trend will catch momentum in the future.
"Travel and dining corner about one-fourth of the total credit card purchases
which signifies the shift in Indian spending habits. According to industry
expert analysis earlier, purchases of both consumer durables and jeweler
items were larger than the hospitality segment. Going forward, this trend
should continue."
HDFC Bank VP and head (credit cards and product portfolio) Parag Rao
says, "Jewelers, consumer durables, fuel purchases, apparel are a much

smaller segment than travel and dining which comprise the largest chunk of
credit card purchases. Eating out has in fact become a big concept now."
According to the experts while travel and hotel bills along with dining,
account for about 25-35 percent of the total value of purchases through
credit cards, purchase of jewelers accounts for 10-11 percent of the
purchases. Apparel purchases account for eight to 10 percent and consumer
durables like TV and mobile phones account for nearly six to seven percent
of the purchases through plastic money. Besides this, a utility payment is yet
another segment where plastic money is making inroads.
Of course this is good news for the credit card companies, but there is a
hitch attached to it. While there is no doubt that more and more Indians are
turning towards plastic money, not many of them are able to repay their
debts. Bad news! But sadly its true.
The default rate on credit cards is the highest across different loan categories
in the country. The rate for credit cards has risen from seven to nine percent
of total outstanding payments last year to about 10-12 percent this year. In
contrast, the default rate is three to four percent for personal loans, two
percent for auto and two-wheeler loans and is less than one percent for
mortgage loans.
Experts are of a view that with growing daily expenses and rising EMIs on
existing loans, the number of customers defaulting on credit card payments
has risen significantly. But volume games will slowly remove this hitch.

TYPES OF CREDIT CARDS
In Indian credit card market there are 12 major types of credit cards being
provided by banks and financial institutions. These cards provide a wide
variety of financial benefits to holders.
Major India Credit Card Types

Following are various types of credit cards available in India:
Premium Credit Cards
Cash Back Credit Cards
Gold Credit Cards
Airline Credit Cards
Silver Credit Cards
Business Credit Cards
Balance Transfer Credit Cards
Co-branded Credit Cards
Low Interest Credit Cards
Lifetime Free Credit Cards
Rewards
There are some additional credit cards that are available in India as well.
Rewards credit cards available in India can be subdivided into six categories
Points, Hotels and Travels, Retail, Auto and Fuel.

Premium Credit Cards
There are 15 various premium credit cards available in India. They may be
mentioned as below:
1. American Express Platinum Credit Card
2. Bajaj Allianz Super Value Titanium Credit Card
3. ICICI Bank Platinum Credit Card
4. Standard Chartered Emirates Platinum Credit Card
5. ICICI Bank Titanium Credit Card
6. Axis Bank Visa Platinum Credit Card
7. ABN AMRO Titanium One Credit Card
8. Citibank Platinum Credit Card
9. Deutsche Bank Platinum Credit Card
10. ICICI Bank Platinum Premiere Credit Card
11. HSBC Platinum Credit Card
12. HDFC Bank Platinum Plus Credit Card
13. SBI (State Bank of India) Platinum Credit Card
14. Kotak Mahindra League Platinum Credit Card
15. ABN AMRO Platinum Credit Card
Gold Credit Cards

There are forty gold credit cards available in India. Fifteen of them are
enumerated as below:

1. American Express Gold Credit Card
2. SBI UBI (United Bank of India) Gold Credit Card
3. American Express Gold Charge Card
4. Axis Bank Gold Plus Credit Card
5. HDFC Bank Gold Credit Card
6. HDFC Womans Gold Credit Card
7. Axis Bank Secured Credit Card
8. Deutsche Bank Smart Gold Credit Card
9. HSBC Gold Credit Card
10. ICICI Bank Solid Gold (Visa) Credit Card
11. Barclays Bank Gold Credit Card
12. ICICI Bank Gold American Express Credit Card
13. Citibank Gold Credit Card
14. Reliance Gold Credit Card
15. Standard Chartered Rotary Credit Card
A number of banks are offering low interest credit cards in India in order to
help the cardholders manage their finances in a better way. These cards are
highly availed by Indian consumers on account of their low interest rates.
OFFERS PROVIDED BY DIFFERENT BANK

CREDIT CARDS
AXIS BANK Credit Card Offers
Travel Offer

Choice Hotels India offers over 30 hotels across 23 destinations under the
international brands of Comfort, Quality and Clarion. Choice Hotels India is
a part of Choice Hotels International, one of the largest and most widespread
lodging franchisors of the world with over 5,000 hotels across the globe.
Enjoy up to 20% discount on rack rates at Choice Hotels India. (Till Dec
08).
The Leela Kempinski Kovalam Beach Kerala and enjoy a 10% discount on
the prevailing Holiday Offers (for a minimum of three nights stay) (Till Dec
08)
Enjoy 20% discount on rack rates at Fortune Hotels. (Till Dec 08)
Domestic and International Ticketing - Axis Bank Cardholders (Debit /

Credit) will get 5% cash back on all Domestic airfares 4% cash back on
International airfares displayed on Akbartravelonline.com.
Hotel Bookings and Holiday Packages - Axis Bank Cardholders (Debit /
Credit) will get 10% cash back Hotel Bookings and 15% cash back on
Holiday Package
10% cash back on Carnival Cruises and Star Cruises.
Shopping Offer
10% discount on the desktops & notebooks of Dell. (Till Dec 08)
Shop at TBZ - The Original with your Axis Bank Credit Card and take
home fine jeweler studded with some Spice rewards!
Spend a cumulative amount of Rs. 1, 00,000 over a period of 3 months at
Adora Outlet with your Axis Bank Credit Card and get a Gift Hamper or
Voucher worth Rs. 20,000, courtesy Adora.
Flat 15% discount to Axis Bank Credit Cardholders on tele shopping (for
cities as detailed herein below) of any product listed on its website fnp.in.
(Till Dec 08)
Sifymall offers a wide range of brands, products and gift certificates,
coupled with some really great shopping deals. Axis Bank Cards has got you
a special pricing on a select set of products. Whats more, use your Card to
buy any product from the list to get a pearl pendant absolutely FREE!!
Entertainment Offer
Get 50% of cash back at all the Multiplexes across India through your
Axis Bank Corporate Card
Exclusive offer for Axis Bank corporate credit card holders,a discount
up to 20% on hotels 7 computers
You can now cruise around in the luxury of Hertzs chauffeur driven cars
with a 35% discount on car rental charges. (Till Dec 09)
Get 15% more music at select Music World Stores across India. Axis Bank
brings you 15% off Gift Vouchers at Indias largest music and home video
retail store. This offer is applicable on Axis Bank Credit. (31st Oct 08).
Barclays Credit Card Offers
Travel Offer
Get 500 cash back offer on domestic flights with Yatra Barclaycard
Platinum

10% cash back offer on flights booked through yatra.com
Amazing discounts & special packages on Holiday resorts.
Shopping Offer
See the offers for your Barclays Card at Futurebazaar.com

Get heavy discounts on top apparels, footware,furniture & many more on
Barclays Times card.
You can also see the city wise offers for your Barclays credit Card
Citibank Credit Card offers
Travel Offer
Get 20% discount on priority pass and availed this over 500 airport VIP
lounges over 275 cities across World through Citibank Platinum credit Card.
On 10000 JPmiles you can have a complimentary upgrade voucher with
the Jet Airways Citibank credit Card.
Shopping Offer
Get 25% cash back with the Citibank Cash back Gold card.
Petrol Offer
No transaction fee applicable on Indian oil Outlets, if you use the Citibank
Indian Oil Credit Card.
You can save 5%evertime you fill the fuel from IOC pumps

DEUTSCHE BANK Credit Card Offers
Travel Offer
Travel offers for Platinum Card holders.
.Entertainment Offer
Log on to Bookmyshow.com and book a ticket through you Deutsche

Platinum Credit card today & get another movie ticket absolutely free.
Petrol Offer
With Deutsche Bank you wont have to pay 2.5% surcharge at petrol
pumps across India (for all petrol transactions between Rs. 400/- to Rs.
4000/-). In addition you get 2.5% savings as part of your Savings Plan.
HDFC Credit Card Offers
Travel Offer
*Get special cash back discount on retail spends from 15 september to 15

November.
5% Cash back on domestic air transactions above Rs.10,000 through
domestic airline websites (2.5% on transactions below Rs.10,000)
5% Cash back on all rail transactions through www.irctc.co.in
*Get up to 50% discount on car rentals from Hertz-Rent-a-car, through
IBTC membership.
*Free Airmiles across leading airlines on redemption of reward points.
*Through your HDFC Bank Visa Credit Card, you can enjoy the Thailand
Grand sale.
*Get 10% cash back on domestic & international airlines & hotel booking
through Yatra.com
Shopping Offer
Shop online using Direct Pay and avail discounts only for HDFC Banks
customers.
See more offers for HDFC Bank Visa cardholders.
Petrol Offer
Enjoy 0% fuel surcharge on BPCL petrol pumps with your HDFC Bank
Credit Cards
HSBC Credit Card Offers
Travel Offer

Deals made on MakeMyTrip.com using HSBC credit card, get: 3% cash
back on domestic airlines tickets; 5% cash back on international airline
tickets; 10% cash back on hotels and holiday packages.
10% off on Globus and Cosmos vacations on Europe & North America.
(Till Dec0s8)
Get 10% off on Costa cruises & Norwegian Cruise Lines. (Till Dec08).
Shopping Offer
Exclusive offer for HSBC Gold card Holders, Click here

to know more shopping deals in your city.
Buy movie tickets online through book my show.
Com using your HSBC Credit Card and avail of fabulous discounts. (Till 1st
Jan09).
25% off on your first online purchase through bookmyshow.com
20% off on your second online purchase through bookmyshow.com
15% off on your third online purchase through bookmyshow.com
Shop with your HSBC Credit Card at Westside to enjoy an additional 5%
off on purchases. This is over and above the discount of up to 50% offered
by Westside!
More Discounts and offers on HSBC Gold Visa card.
SBI Credit card offers
Travel offer

Privilege Circle Program get discounts for your dream vacation with your
SBI card.
Shopping Offer
*Get Rs.500 off while shopping through www.homeshop18.com
Petrol Offer
Save 2.5% on transaction fee with SBI Gold Card.
Buy fuel from any of the petrol pumps of Rs.400 to Rs.3000& get 0%
surcharge.
WHAT IF CREDIT CARD IS LOST OR

STOLEN?

Reporting Your Lost Credit Card
The first thing you should do is report your missing credit card to the card
issuer as soon as you notice the card is missing. Dont wait a day or even a
minute.
Most card issuers print their customer service phone number on your billing
statement. Locate a recent copy of your statement to find the number to
reach your card issuer. Alternatively, if you have online access for your
credit card, you may be able to use the website to report your missing credit
card.
When you contact your creditor, you should have the following:
your account number

the date you noticed your card was missing
the date and amount of your last purchase, if known
Even after youve contacted the card issuer by phone, its wise to follow-up
with a letter. The letter should state that your credit card was lost or stolen
and include the account number, date of loss or theft, first date the loss was
reported, and the last authorized transaction. This letter will provide proof
that you reported the loss should that fact ever come into question.
Dealing with Unauthorized Charges

The Fair Credit Billing Act (FCBA) protects you when fraudulent charges
are made with your lost or stolen credit card. Under federal law, if
unauthorized charges are made with your credit card, the maximum amount
you can be liable for is $50. If the charges are made after you report the card
lost or stolen, you have no liability. However, if the charges are made before
you report the loss, your creditor can ask you to pay up to $50. Thats why
its important to report your missing credit card as soon as possible.
Many credit card issuers have some type of protection benefit that eliminates
your liability for any fraudulent charges as long as the card is reported
missing within a certain period of time. Ask your creditor if such a benefit
applies to your account.
Review your billing statement for a few months after the loss to catch any
unauthorized charges made using your credit card. If you see any charges
that you did not make, report them to your creditor as soon as possible.
Preventing Future Loss

The best way to avoid a lost or stolen credit card is to remain aware of
your cards whereabouts at all times. At any point in time, you should
only carry the credit cards that youll need. Leave the others at home.
Take the steps necessary to keep your credit cards in a safe and secure
place.
Avoid placing credit cards directly into your pockets. Its easier for
them to slip out.
Make sure your cards fit snugly inside the slots of your wallet or
billfold. If the slots have become loose or worn, consider purchasing a
new, stiffer wallet that will hold your credit cards securely in place.
Take some time now to create a contact list including the name and
number of all your card issuers. Store the list in a safe place so you can
easily reach your card issuers if a credit card is lost or stolen in the
future

Understanding Credit Card Terms And
Costs
Credit Card Terms are Easy to Learn and Understand
Anyone who does not understand how a credit card works - including
purchasing items with it, reading the monthly billing statements, and
knowing the rules for payments - should not own a credit card. However,
credit card terms and details on how to responsibly own a credit card are
easy to learn.
There are several terms associated with credit cards that often appear on
literature that come with credit card applications as well as monthly
statements. Learning what these terms are and what they mean can be the
difference between achieving and keeping a good credit score and getting
into a large amount of debt that is hard to manage.
Average Daily Balance
The average daily balance on a credit card is the balance on a credit card
divided by the number of days in that particular month. This number is then
used to calculate the interest that will be charged to the credit card holder on
each month's bill.

Annual Percentage Rate
this rate is often referred to as the "APY." This is the rate that credit card
holders must pay as an interest in addition to the cost of purchases made
with the credit card.
Balance Transfer
transferring the balance on one credit card to another is one method many
credit card holders use in order to achieve lower interest rates on balances.
Cash-Advance Fee
Most credit card companies will not allow credit card holders to use their
card at an automated teller machine without charging them a fee. The rate of
interest on a cash advance, or the flat fee a card holder must pay per cash
advance is usually separate and higher than the rate of interest on purchases.
Card Holder Agreement

This is the agreement that gives all the descriptions about the credit card, the
interest rate associated with the card, other fees, and every other detail
related to the terms and conditions of the card.
Finance Charge
The finance charge is the amount of money that the card holder must pay in
addition to the total due for purchases. The amount is calculated using the
interest rate and the purchase balance on the card.
Minimum Payment
Each month, the card holder receives a bill. The bill will specify a minimum
payment that must be sent to the credit card company by the due date. If
there is a balance on the card, or if there have been purchases the previous

month, there will be a minimum payment due. The minimum payment is
usually a small percentage of the balance, or a minimum dollar amount -
usually ten or twenty dollars.
Pre-Approval
Many people receive numerous "pre-approved" credit card applications in

the mail every week. Many of these mailers have the words "Pre Approved"
written on them. Pre-approved does not mean that a credit card is
guaranteed. It only means that the person who receives the mail has a good
chance of obtaining a card.
Secured Card
A secured credit card is one that is attached to the card holder's bank savings
account. The credit card company uses the link between the credit card and
the savings account to withdraw monthly payments. This type of account
ensures that minimum monthly payments are never missed. Credit card
companies often offer this type of credit card account to people who have
low credit scores or a history of problems paying their monthly bills.
Variable Interest Rate
This is the percentage that the credit card holder must pay to hold a balance
on their credit card. Avariable rate is one that can fluctuate depending on the
current national interest rate level.

Other Terms
There are many other terms associated with credit cards, statements and
payments. Complete glossaries of them are located all over the internet, and
just about every credit card company has them posted on their individual
websites.
Various costs
Annual Fee
Virtually all secured credit card issuers charge an annual fee. Some
unsecured card issuers charge one, but most offer free cards in order to
remain competitive. Among unsecured cards, annual fees are most
commonly charged on accounts that provide airline miles or other rewards.
Prestige cards may also charge a fee. However, it will sometimes be waived
upon request.
Grace period
Most credit cards allow you to pay off purchases without being charged
interest, by taking advantage of their "grace period." This is an amount of
time in which you can pay off a debt without incurring finance charges. It is
usually about 25 days.
To make use of a grace period, pay your bills in full each month by the
payment due date. If you owe any money on your previous statement
(referred to as having an "outstanding" or "previous" balance), in most cases

you will lose the benefit of having a grace period on new purchases for the
current month.
Not all credit cards have a grace period. When you use a card with no grace
period, the bank begins charging you interest on the day the purchase is
made or the day it is recorded (posted) on your account, depending on the
bank's policy. When a credit card does not have a grace period, there is no
way to avoid paying interest on your purchases.
If you use a card that has a grace period (and you have no outstanding
balance), you will not be charged interest until the next billing cycle, for
purchases you make during the current billing cycle. In addition, you won't
be charged any interest if you pay off your balance in full during the grace
period of that cycle.
(However, you will probably be charged interest on cash advances every day
until you repay them.)
THE BOTTOM LINE: If you have an outstanding balance at the beginning

of the new billing cycle, you will not benefit at all from the grace period. Try
to pay off your balance in full each month to maintain the grace period and
avoid paying interest.

Cash advances
A cash advance is a loan billed to your credit card. You can obtain a cash
advance with your credit card at a bank or an automated teller machine
(ATM) or by using checks linked to your credit card account.
Most cards charge a special fee when a cash advance is taken out. The fee is
based on a percentage of the amount borrowed, usually about 2% or 3%.
Some credit cards charge a minimum cash advance fee, as high as $5. You
could get $20 in cash and be charged $5, a fee equal to 25% of the amount
you borrowed.
Most cards do not have a grace period on cash advances. This means you
pay interest every day until you repay the cash advance, even if you do not
have an outstanding balance from the previous statement.
On some cards, the interest rate on cash advances is higher than the rate on
purchases. Be sure you check the details on the contract sent to you by the
card issuer.
Here is an example of charges that could be imposed for a $200 cash

advance that you pay off when the bill arrives:
Cash Advance Fee = $4 (2% of $200)

Interest for one month = $3 (18% APR on $200)
Total cost for one month = $7 ($4 + $3)
In comparison, a $200 purchase on a card with a grace period could cost $0

if paid off promptly in full.

THE BOTTOM LINE: It is usually much more expensive to take out a cash
advance than to charge a purchase to your credit card. Use cash advances
only for real emergencies.
Calculating interest/ billing period
Most banks use an "average daily balance" method to calculate interest.
Average Daily Balance Method

1. Every day, the bank adds your charges and payments to learn what
you owed it that day. It adds these totals and divides that figure by the
number of days in the month, to determine your average daily balance.
2. Then the bank divides its annual interest rate by 12 (the number of
months in the year) to get a "monthly periodic interest rate." For
example, an 18% interest rate divided by 12 equals a monthly rate of
1.5%.
3. The bank multiplies your average daily balance by the monthly
periodic interest rate, to obtain the finance charge for that month.
In calculating your daily balance, most banks include charges made during
the month ("average daily balance, including new purchases"). Others
exclude those charges until the next statement ("average daily balance,
excluding new purchases"), which is to your benefit.

Two-Cycle Billing Method
Some banks retroactively eliminate the grace period by using a "two-cycle

billing method." If you don't pay the entire balance, the finance charge is
based on the sum of the average daily balances for both the previous and
current months. (Some banks exclude new purchases from the finance
charge calculation of their two-cycle billing method.)
You are only charged for a two-month time period in the first month you
don't pay all charges. People who sometimes pay in full and sometimes leave
a balance will pay about the same amount under the two-cycle method as
with a "no grace period" card.

What are travel and entertainment cards?
Travel and entertainment cards are credit cards with a twist: They dont
charge interest to the cardholder, but their entire balance must be paid every
month.
Diners Club, American Express and Carte Blanche are examples. Some of
these cards come with higher annual fees, and many of them carry
companion interest-bearing cards, such as the American Express Optima
card.
Costly fees
Many people look for a card that doesn't have an annual fee, but did you
know that there are other fees that can cost you more in the long run?
Late fees. Most cards charge a fee when payments arrive late, after
the due date. Some banks wait a few days before assessing this fee, but
many impose it the day after the payment was due.
Some companies have a set fee, such as $10 or $15, while others charge a
percentage, such as 5%, of the minimum payment due. Just paying late
fees twice in one year can cost you more than an annual fee.
To avoid late fees, mail your payment in plenty of time to arrive before the
due date. If you pay your bill at the bank's branch or ATM, find out how
long it will take to process your payment. Sometimes payments made at a
branch or ATM are not credited for a few days.
Over-credit-limit fees. Most cards assess a fee if you charge more
than your credit limit. These fees are charged each time you exceed your

limit, so you could be hit with several of them during one billing period.
Most banks have a set fee, such as $10 or $15, while others charge a
percentage, such as 5%, of the amount you are over your limit.
If you charge $400 over your limit, with a 5% penalty, you will pay a fee
of $20. This is in addition to interest charges.
Lost card replacement fees. A few companies charge people whose
cards have been lost or stolen more than once or twice. These fees are
usually $5 or $10.
THE BOTTOM LINE: Special fees can cost you a lot, so keep track of when
you mail your payments and how much credit you have left.
Tips to lower costs

Switch to a lower-rate card. Maintaining a $1,000 average balance on
your 18% credit card will cost you more than $180 in interest over one
year. If you switch that money to a 14% rate card you will save about $40.
(Some banks reduce the interest rate on balances transferred from another
issuer.)
Take advantage of your grace period. With a grace period, you won't
be charged interest until the start of the next period, so try to pay off the
entire balance each month.
Ask your bank if you can get a lower interest rate. Many banks have
lower-rate cards. If you can't get a better rate from your bank, shop around
for another card.
Always pay more than the minimum balance. Paying the minimum
prolongs the time it will take you to pay off your balance, and costs you a
lot more in interest.
If you are paying interest, mail your check as soon as you receive your
statement. The earlier your money is received, the lower your average
daily balance will be, reducing the amount you pay in interest.
Use savings to pay credit card bills. If you have $100 in a savings account at
3% interest, you will earn a little over $3 in one year. That $100, used to pay
off $100 on an 18% card will save you $18, six times the interest you would
have earned in your account.
Advantages and disadvantages of credit card

Advantages:
1. They allow you to make purchases on credit without carrying
around a lot of cash. This allows you a lot of flexibility.
2. They allow accurate record-keeping by consolidating
purchases into a single statement.
3. They allow convenient remote purchasing - ordering/shopping
online or by phone. They allow you to pay for large purchases in
small, monthly installments.
4. Under certain circumstances, they allow you to withhold payment
for merchandise which proves defective.
5. They are cheaper for short-term borrowing - interest is only paid
on the remaining debt, not the full loan amount.
6. Many cards offer additional benefits such as additional insurance
cover on purchases, cash back, air miles and discounts on holidays.
Disadvantages:

1. You may become an impulsive buyer and tend to overspend because
of the ease of using credit cards. Cards can encourage the purchasing
of goods and services you cannot really afford.
2. Credit cards are a relatively expensive way of obtaining credit if you
don't use them carefully, especially because of the high interest rates
and other costs.
3. Lost or stolen cards may result in some unwanted expense and
inconvenience.
4. The use of a large number of credit cards can get you even further into
debt.
5. Using a credit card, especially remotely, introduces an element of risk
as the card details may fall into the wrong hands resulting in
fraudulent purchases on the card. Fraudulent or unauthorized charges
may take months to dispute, investigate, and resolve.
Origin of Debit Card.

The history of debit card implies that the concept of debit card is not
new. History of debit card dates back around 20 years ago which highlighted
the introduction of e-commerce and alternative means of payment.
The recent history of debit card indicates the rise in the usage of debit
cards. History of debit card reflects the dominance of the debit card as a
means of making payments, becoming increasingly popular. This alternative
means of payment is gradually gaining ground with each passing year.
The Magic of Numbers:
History of debit card shows that back in 1990, the count of debit cards in
circulation was around19 million. History of debit card also has it, that the
initial years of the debit card era witnessed steep growth and by the year
2006 there were as many as 27.8 million debit cards.
The increase in the number of debit cards have sharply declined owing to the
fact that the market is reaching a saturation point but that has not
stopped debit card usage completely.
Statistically, history of debit card usage has followed a trend where one can
expect the debit card usage to rise by 9.2 billion with the spending capacity
to go up by 400 million.
The use of debit card boomed to 28.8 million in 2006 and is expected to
reach 34.4 million in 2016.
History of debit card has shown that food and drink has dominated the
scenario of the majority of the transactions involving a debit card.

History of debit card indicates that the last 20 years have witnessed a radical
change in the payment options and the plastic card has replaced cash.
Debit card
A debit card (also known as a bank card or check card) is a plastic card that
provides an alternative payment method to cash when making purchases.
Functionally, it can be called an electronic check, as the funds are withdrawn
directly from either the bank account, or from the remaining balance on the
card. In some cases, the cards are designed exclusively for use on the
Internet, and so there is no physical card.
The use of debit cards has become widespread in many countries and has
overtaken the check, and in some instances cash transactions by volume.
Like credit cards, debit cards are used widely for telephone and Internet
purchases, and unlike credit cards the funds are transferred from the bearer's
bank account instead of having the bearer to pay back on a later date.
Debit cards can also allow for instant withdrawal of cash, acting as the ATM
card for withdrawing cash and as a cheque guarantee card. Merchants can
also offer "cashback"/"cashout" facilities to customers, where a customer
can withdraw cash along with their purchase.

What is a pin?
A Personal Identification Number (PIN) is a unique numeric personal code
or password which is often linked with financial accounts. Banks and credit
card companies use PIN numbers to secure financial information, but they
can also be found linked with student loans, utility accounts, and other
secured systems. APIN usually has four digits which are known only to the
account holder. When the account holder wishes to access information, he or
she can enter the PIN along with another form of identifying information
such as a password, account card, or name.
Most consumers are familiar with PINs because they are used to access
Automatic Teller Machines (ATMs). A client inserts a bank card into an
ATM, enters the PIN when prompted, and then makes any account changes,
deposits, or withdrawals necessary. By linking the bank card with a PIN, the
bank secures the information it contains if the bank card is lost or stolen.
Most banks automatically assign PINs to their customers,
although a PIN number can also be manually set.
A PIN number is highly useful for gaining quick access to secure

information. Assuming a consumer keeps a PIN private, the number can be
used to pay bills, check account balances, transfer funds, or
perform a variety of other account transactions. Having a PIN also means
that the client does not have to use his or her Social Security Number as a
means of identification. Since identity theft is a concern for many people,
this alleviates a number of fears

Types of debit card
Online Debit Card

Online debit cards require electronic authorization of every transaction and
the debits are reflected in the users account immediately. The transaction
may be additionally secured with the personal identification
number (PIN) authentication system and some online cards require such
authentication for every transaction, essentially becoming
enhanced automatic teller machine (ATM) cards. One difficulty in using
online debit cards is the necessity of an electronic authorization device at
the point of sale (POS) and sometimes also a separate PIN pad to enter the
PIN, although this is becoming commonplace for all card transactions in
many countries. Overall, the online debit card is generally viewed as
superior to the offline debit card because of its more secure authentication
system and live status, which alleviates problems with processing lag on
transactions that may have been forgotten or not authorized by the owner of
the card. Banks in some countries, such asCanada and Brazil, only issue
online debit cards (santu)
Offline Debit Card

Offline debit cards have the logos of major credit cards
(e.g. Visa or MasterCard) or major debit cards (e.g. Maestro in the United
Kingdom and other countries, but not the United States) and are used at
the point of sale like a credit card. This type of debit card may be subject to
a daily limit, and/or a maximum limit equal to the current/checking account
balance from which it draws funds. Transactions conducted with offline

debit cards require 23 days to be reflected on users account balances. In
some countries and with some banks and merchant service organizations, a
"credit" or offline debit transaction is without cost to the purchaser beyond
the face value of the transaction, while a small fee may be charged for a
"debit" or online debit transaction (although it is often absorbed by
the retailer). Other differences are that online debit purchasers may opt to
withdraw cash in addition to the amount of the debit purchase (if the
merchant supports that functionality); also, from the merchant's standpoint,
the merchant pays lower fees on online debit transaction as compared to
"credit" (offline) debit transaction
Prepaid Debit Card

Prepaid debit cards, also called reloadable debit cards or reloadable prepaid
cards, are often used for recurring payments. The payer loads funds to the
cardholder's card account. Particularly for US-based companies with a large
number of payment recipients abroad, prepaid debit cards allow the delivery
of international payments without the delays and fees associated with
international checks and bank transfers. Web-based services such as stock
photography websites (istockphoto), outsourced services (oDesk), and
affiliate networks (MediaWhiz) have all started offering prepaid debit cards
for their contributors/freelancers/vendors abroad.
Electronic Purse Card

Smart-card-based electronic purse systems (in which value is stored on the
card chip, not in an externally recorded account, so that machines accepting
the card need no network connectivity) were tried throughout Europe from
the mid-1990s, most notably in Germany (Geldkarte), Austria (Quick),

Belgium (Proton), France (Moneo), the Netherlands (Chipknip and Chipper),
Switzerland ("Cash"), Norway ("Mondex"), Sweden ("Cash"), Finland
("Avant"), UK ("Mondex"), Denmark ("Danmnt") and Portugal ("Porta-
moedas Multibanco").
The major boom in smart card use came in the 1990s, with the introduction
of the smart-card-based SIM used in GSM mobile phone equipment in
Europe. With the ubiquity of mobile phones in Europe, smart cards have
become very common.

Advantages and Disadvantages of debit card
Advantages
A consumer who is not credit worthy and may find it difficult or

impossible to obtain a credit card can more easily obtain a debit card,
allowing him/her to make plastic transactions.
Use of a debit card is limited to the existing funds in the account to
which it is linked (except cases of offline payments), thereby preventing
the consumer from racking up debt as a result of its use, or being charged
interest, late fees, or fees exclusive to credit cards.
For most transactions, a check card can be used to avoid check writing
altogether. Check cards debit funds from the user's account on the spot,
thereby finalizing the transaction at the time of purchase, and bypassing
the requirement to pay a credit card bill at a later date, or to write an
insecure check containing the account holder's personal information.
Like credit cards, debit cards are accepted by merchants with less
identification and scrutiny than personal checks, thereby making
transactions quicker and less intrusive. Unlike personal checks,
merchants generally do not believe that a payment via a debit card may
be later dishonored.
Unlike a credit card, which charges higher fees and interest rates when
a cash advance is obtained, a debit card may be used to obtain cash from
an ATM or a PIN-based transaction at no extra charge, other than a
foreign ATM fee.

Disadvantages
Some banks are now charging over-limit fees or non-sufficient funds

fees based upon pre-authorizations, and even attempted but refused
transactions by the merchant (some of which may not even be known
by the client).
Many merchants mistakenly believe that amounts owed can be
"taken" from a customer's account after a debit card (or number) has
been presented, without agreement as to date, payee name, amount
and currency, thus causing penalty fees for overdrafts, over-the-limit,
amounts not available causing further rejections or overdrafts, and
rejected transactions by some banks.
In some countries debit cards offer lower levels of security protection
than credit cards. Theft of the users PIN using skimming devices can
be accomplished much easier with a PIN input than with a signature-
based credit transaction. However, theft of users' PIN codes using
skimming devices can be equally easily accomplished with a debit
transaction PIN input, as with a credit transaction PIN input, and theft
using a signature-based credit transaction is equally easy as theft using
a signature-based debit transaction.
In many places, laws protect the consumer from fraud a lot less than
with a credit card. While the holder of a credit card is legally
responsible for only a minimal amount of a fraudulent transaction
made with a credit card, which is often waived by the bank, the
consumer may be held liable for hundreds of dollars in fraudulent
debit transactions. The consumer also has a much shorter time
(usually just two days) to report such fraud to the bank in order to be

eligible for such a waiver with a debit card, whereas with a credit
card, this time may be up to 60 days. A thief who obtains or clones a
debit card along with its PIN may be able to clean out the consumer's
bank account, and the consumer will have no recourse.
When a transaction is made using a credit card, the bank's money is
being spent, and therefore, the bank has a vested interest in claiming
its money where there is fraud or a dispute. The bank may fight to
void the charges of a consumer who is dissatisfied with a purchase, or
who has otherwise been treated unfairly by the merchant. But when a
debit purchase is made, the consumer has spent his/her own money,
and the bank has little if any motivation to collect the funds.
In some countries, and for certain types of purchases, such
as gasoline (via a pay at the pump system), lodging, or car rental, the
bank may place a hold on funds much greater than the actual purchase
for a fixed period of time. However, this isn't the case in other
countries, such as Sweden. Until the hold is released, any other
transactions presented to the account, including checks, may be
dishonored, or may be paid at the expense of an overdraft fee if the
account lacks any additional funds to pay those items.

What is the difference between debit card and
credit card?
Debit card: to use a debit card a person must have sufficient amount in
his/her account and and shopping is limited to the amount avail in the
account, it cannot be exceeded. From debit card the amount is
transacted/debited at the very moment as and when it is utilized.
Credit card:
To use credit card one need not have to have money/amount in his/her
account. They are the special type of customers because banks issued credit
cards to them based on some attributions or features. When the credit card is
being swapped by the shopkeeper, the amount does not get transacted at the
very moment in fact it is being transacted approximately after 5 or 7 dayz.
There are certain limited amount which the banker allowed to itz customers
up to which they can utilized. From this there is a certain amount upto which
no interest is being added till 1/2 months of repayment but utilisation of
more than this will carry 4% approx. interest.
The following affects are reflected when the those cards are used.
Debit card = decrease in credit balance of bank a/c

Of a account holder.
Credit card = increase in debit balance of bank a/c of

a account holder.

These cards are used in the same way, but in the case of debit card we
would have amount in the account and in the case of credit card no need to
maintain amount in the account but we have to pay after bill payment to the
banker.
Costly fees
Many people look for a card that doesn't have an annual fee, but did you
know that there are other fees that can cost you more in the long run?
Late fees. Most cards charge a fee when payments arrive late, after
the due date. Some banks wait a few days before assessing this fee, but
many impose it the day after the payment was due.
Some companies have a set fee, such as $10 or $15, while others charge a
percentage, such as 5%, of the minimum payment due. Just paying late
fees twice in one year can cost you more than an annual fee.
To avoid late fees, mail your payment in plenty of time to arrive before the
due date. If you pay your bill at the bank's branch or ATM, find out how
long it will take to process your payment. Sometimes payments made at a
branch or ATM are not credited for a few days.
Over-credit-limit fees. Most cards assess a fee if you charge more

than your credit limit. These fees are charged each time you exceed your
limit, so you could be hit with several of them during one billing period.
Most banks have a set fee, such as $10 or $15, while others charge a
percentage, such as 5%, of the amount you are over your limit.
If you charge $400 over your limit, with a 5% penalty, you will pay a fee
of $20. This is in addition to interest charges.
Lost card replacement fees. A few companies charge people whose
cards have been lost or stolen more than once or twice. These fees are
usually $5 or $10.
THE BOTTOM LINE: Special fees can cost you a lot, so keep track of when
you mail your payments and how much credit you have left.
Tips for responsible use of debit cards

1. Know which type of debit card you have, and ask your bank whether you
have a choice. Some consumers have complained that the bank changed
their ATM cards to debit cards that do not require personal identification
numbers without letting them know.
2. Always protect your ATM card and keep it in a safe place, just as you
would cash, credit cards or checks.
3. Do not leave your debit card lying around the house or on your desk at
work.
4. If your card is lost or stolen, or you suspect it is being used fraudulently,

report it immediately to your bank.
5. Close your account and ask your bank for a new account number and PIN.
6. Hold on to receipts from your debit transactions. Don't throw them in

public trash cans or even in your own trash without first shredding them.

Crooks have been known to "dumpster-dive" for documents that have
account numbers and other personal information.
7. Memorize your PIN, and do not write it on your card.
8. Don't choose a PIN a smart thief could figure out, such as numbers
corresponding to your birth date or your phone number.
9. Never give your PIN to anyone. Keep it private.
10. Always know how much money you have in your account, and review
bank statements carefully. Don't forget that your debit card may allow you to
access money that you have set aside to cover a check that has not yet
cleared your bank.
11. Keep your receipts in one place for easy retrieval and better oversight of
your account.
12. Never give your debit card number over the phone unless you initiated
the call and are certain that the recipient is legitimate.

METHODOLOGY:-
Hundred peoples were interviewed.
Quotas were set for sex, age, social class and the working status to
ensure that representative sample of the population was interviewed.
We conducted interviews in the different age groups.

{16-24, 25-34, 35-44, 45-54, 55+...}
The questionnaire was structured in such a way that it covers

ownership of credit cards, reasons for not holding cards.
Number and types of card held, how pay off balances, usage
frequency.
Factors influencing choice of card, reasons for loyalty.

DATA ANALYSIS:-
Do you own a credit card?
- Out of the 34 people interviewed 23 people own a credit card while 11

people do not own a credit card.
- Seventeen people of the twenty nine service class people interviewed

hold a credit card.
- Among the retired people and the housewives eleven people own a
credit card while seven people do not.
- Seven out of the nineteen students interviewed hold a credit card.

Why you do not own a credit card?
- Seven people in business class, four individuals in service and the

retired& housewives category and five students prefer using cash.
- Two individuals each in the business class and the service class and
three people in the retired and housewives category and five students
have the fear of high expenditure. This is one of the greatest fear
people have while buying a credit card.
- One individual each in the business class and the students category
while three people in the service class are not interested in having a
credit card.
- One student and a businessman and three service employees own a

debit card.
Reason for not having credit card?

- Two individuals each in the business class and the retired &
housewives category while three service employees and a student had
applied for a credit card but was refused.
- Eight businessmen, seven service employees, three students and five

people in the retired & housewives category have not applied for a
credit card. The reason being that they do not want to own a credit
card.
- One businessman and two employees were denied a credit card

because of insufficient income.
- Eight students were refused the privilege of a credit card because they
do not fulfill the age requirement.
Why did you give up credit card?

- A businessman and two employees gave up their credit cards because
they were spending too much from their cards. Their liabilities were
increasing.
- Three individuals each in the business class. Service class and

students category gave up their credit cards because they found it too
expensive after using it.
- There are no individuals who gave up their credit cards to get their
finance back in order.
How many credit cards do you own?

- Ten businessmen, nine service employees and five individuals each in
the retired and housewives category and the students category own a
single credit card.
- Thirteen businessmen, eight employees, two students and eight people

in the retired & housewives category own more than one credit cards.
Which companys credit card do you hold?

- Fifteen businessmen, five servicemen and four people in the retired &
housewives category own credit cards from the HDFC Bank.
- Eleven businessmen, six servicemen, three individuals in the Retired

& Housewives category and two students hold cards from the ICICI
Bank.
- Nine businessmen, three servicemen, four students and three

individuals in the Retired & Housewives category have credit cards of
AXIS Bank.
- Five businessmen, three service employees, one student and four

people in the Retired & Housewives category hold credit cards of SBI.
- Three businessmen, five service employees, hold cards of CITI Bank.
- Four service employees, one student and an individual of the Retired

& housewives group hold credit cards of banks other than those
mentioned above
What factors influence you while buying a credit card?

- Twelve businessmen, two servicemen, two people from the Retired &
Housewives category and one student give importance to the interest
rate to be paid on the amount.
- Eight businessmen, six service employees two students and three

people from the Retired & Housewives category give importance to
the Brand name.
- Eleven businessmen, seven servicemen, one student and three people

of the Retired & Housewives category buy credit cards by looking at
the attractive schemes that the banks provide.
- Two businessmen, seven servicemen, and three students own credit

cards that were offered to them while opening an savings account in
the bank
How frequently do you use credit card?

- Four businessmen use their credit card daily.
- Two businessmen and one student use their credit card several times a
week.
- Two businessmen and two servicemen use their credit cards once a
week.
- Seven businessmen, five servicemen, two students and one individual

of the Retired & Housewives category use their credit cards several
times a month.
- Four servicemen, three students and seven members of the Retired &
Housewives category use their credit cards only once a month.
- Seven businessmen, six servicemen, one student and three people of

the Retired & Housewives category use their credit cards rare.
What is your credit limit?

- A businessman, a service man, a student and two people in the Retired
& Housewives category have credit cards having a limit of Rs. 20000.
- Nine businessmen and service men, five students and two individuals
of the Retired category have a credit limit in the range of Rs.20000-
Rs.50000.
- Seven businessmen and servicemen, six people in the Retired &

Housewives category and one student has a credit limit in the range of
Rs. 50000- Rs.100000.
- Six businessmen, two servicemen, one individual in the Retired &

Housewives category and one student has a credit limit of Rs.100000
and above. More number of businessmen own this type of credit cards
because they have to carry out transactions in large amounts.
Do you make payment for credit cards?

- Eight businessmen and servicemen, four people in the Retired &
Housewives category always make payments for their credit card bills
on time.
- Eight businessmen, six servicemen, six people in the Retired &

Housewives category and five students mostly make their bill
payments on time.
- Seven businessmen, two servicemen, one individual in the Retired &

Housewives category rarely make their payments on time. Mostly
there is a delay in making payments. There is an advantage for the
bank as they earn interest on the amount delayed.
- One serviceman never makes his payment on time. This is very

advantageous to the bank.
How do you make your payment?

- Nine businessmen, seven servicemen, one student and four people in
the Retired & Housewives category always pay the full amount of
their bill.
- Six businessmen, three servicemen, one student and one individual in

the Retired & Housewives category sometimes pay the full amount of
the bill.
- Three businessmen, four servicemen three students and three

individuals from the Retired & Housewives category usually pay half
of the total amount to be paid.
- Two businessmen, a serviceman, three people from the Retired &

Housewives category usually pay only a small amount than minimum.
- Three businessmen, two servicemen and a student always pay the

minimum amount of the total. Such customers are beneficial from the
banks point of view as they can make profit from the interest earned
on the balance amount.
Do you always carry a balance on your credit card?

- Nineteen businessmen, eight servicemen, eleven people from the
Retired & Housewives category and five students always keep a
balance amount on the bill payable.
- Four businessmen, nine servicemen and two students never keep any
balance amount on their credit cards.
Do you make internet purchases with your credit cards?

- Ten businessmen, eight servicemen, seven people from the Retired &
Housewives category and three students use their credit cards to make
internet purchases.
- Thirteen businessmen, nine servicemen, four students and people from

the Retired & Housewives category do not use their credit cards to
make internet purchases.
LIMITATIONS OF CREDIT CARD
PROBLEMS

A smart card, combining credit card and debit card properties. The 3 by 5
mm security chip embedded in the card is shown enlarged in the inset. The
contact pads on the card enable electronic access to the chip.
The low security of the credit card system presents countless opportunities
for fraud. This opportunity has created a huge black market in stolen credit
card numbers, which are generally used quickly before the cards are reported
stolen.
The goal of the credit card companies is not to eliminate fraud, but to
"reduce it to manageable levels".[15] This implies that high-cost low-return
fraud prevention measures will not be used if their cost exceeds the potential
gains from fraud reduction.
Most internet fraud is done through the use of stolen credit card information
which is obtained in many ways, the simplest being copying information
from retailers, either online or offline. Despite efforts to improve security for
remote purchases using credit cards, systems with security holes are usually
the result of poor implementations of card acquisition by merchants. For
example, a website that uses SSL to encrypt card numbers from a client may
simply email the number from the web server to someone who manually
processes the card details at a card terminal. Naturally, anywhere card details
become human-readable before being processed at the acquiring bank, a
security risk is created. However, many banks offer systems where
encrypted card details captured on a merchant's web server can be sent
directly to the payment processor.

Controlled Payment Numbers are another option for protecting one's credit
card number: they are "alias" numbers linked to one's actual card number,
generated as needed, valid for a relatively short time, with a very low limit,
and typically only valid with a single merchant.
The Federal Bureau of Investigation and U.S. Postal Inspection Service are
responsible for prosecuting criminals who engage in credit card fraud in the
United States, but they do not have the resources to pursue all criminals. In
general, federal officials only prosecute cases exceeding US $5000 in value.
Three improvements to card security have been introduced to the more
common credit card networks but none has proven to help reduce credit card
fraud so far. First, the on-line verification system used by merchants is being
enhanced to require a 4 digit Personal Identification Number (PIN) known
only to the card holder. Second, the cards themselves are being replaced with
similar-looking tamper-resistant smart cards which are intended to make
forgery more difficult. The majority of smartcard (IC card) based credit
cards comply with the EMV (Euro pay MasterCard Visa) standard. Third, an
additional 3 or 4 digit code is now present on the back of most cards, for use
in "card not present" transactions. See CVV2 for more information.
The way credit card owners pay off their balances has a tremendous effect on
their credit history. All the information is collected by credit bureaus. The
credit information stays on the credit report, depending on the jurisdiction
and the situation, for 1, 2, or even 10 years after the debt is repaid.
FRAUD

The fraud begins with either the theft of the physical card or the compromise
of data associated with the account, including the card account number or
other information that would routinely and necessarily be available to a
merchant during a legitimate transaction. The compromise can occur by
many common routes and can usually be conducted without tipping off the
card holder, the merchant or the bank, at least until the account is ultimately
used for fraud. A simple example is that of a store clerk copying sales
receipts for later use. The rapid growth of credit card use on the Internet has
made database security lapses particularly costly; in some cases, millions of
accounts have been compromised.
Stolen cards can be reported quickly by card holders, but a compromised

account can be hoarded by a thief for weeks or months before any fraudulent
use, making it difficult to identify the source of the compromise. The card
holder may not discover fraudulent use until receiving a billing statement,
which may be delivered infrequently.
When a credit card is lost or stolen, it remains usable until the holder notifies
the bank that the card is lost. Most banks have toll-free telephone numbers
with 24-hour support to encourage prompt reporting. Still, it is possible for a
thief to make unauthorized purchases on that card up until the card is
cancelled. In the absence of other security measures, a thief could potentially
purchase thousands of dollars in merchandise or services before the card
holder or the bank realize that the card is in the wrong hands.
The only common security measure on all cards is a signature panel, but
signatures are relatively easy to forge. Many merchants will demand to see a
picture ID, such as a driver's license, to verify the identity of the purchaser,

and some credit cards include the holder's picture on the card itself.
However, the card holder has a right to refuse to show additional
verification, and asking for such verification may be a violation of the
merchant's agreement with the credit card companies. Self-serve payment
systems (gas stations, kiosks, etc.) are common targets for stolen cards, as
there is no way to verify the card holder's identity. A common
countermeasure is to require the user to key in some identifying information,
such as the user's ZIP or postal code. This method may deter casual theft of a
card found alone, but if the card holder's wallet is stolen, it may be trivial for
the thief to deduce the information by looking at other items in the wallet.
For instance, a U.S. driver license commonly has the holder's home address
and ZIP code printed on it.
Banks have a number of countermeasures at the network level, including

sophisticated real-time analysis that can estimate the probability of fraud
based on a number of factors. For example, a large transaction occurring a
great distance from the card holder's home might be flagged as suspicious.
The merchant may be instructed to call the bank for verification, to decline
the transaction, or even to hold the card and refuse to return it to the
customer.
Suggestions

Always settle a credit card bill full for two good reasons. First and
foremost, if you are not able to pay now, you should not have spent it
in the first place. Second, the credit charge now tends to be extremely
high ranging from 2 per cent to 3 percent per month.
Credit cards should be used only as an emergency exit from a

financial crisis.
Conclusion
Credit cards are a necessity these days. They are considered a boon for
the ready convenience they confer on the user- you dont have to
worry about carrying enough cash while going shopping or to a
restaurant. Just flash your card, sign and walk out. But many criticize
credit cards for the easy money syndrome they generate. Many people
fall into a debt trap because of the extensive use of their cards. But if
youre careful with your expenses they can be a handy thing to have
around. Hence, you need to consider the term responsible usage and
understand the actual significance of living on credit
But here again there are two sides to a coin. Credit cards could be a
useful, easy-to-use tool for you or could end up being a Deadly
weapon".
Bibliography
www.google.com

www.wikipedia.com
http://credit.about.com/od/creditcardbasics/p/creditcard.htm
www.icicibank.com/pfsuser/customerservice/ccfeatures.htm
http://ezinearticles.com/? Credit-Card-Features-Fully-Explained
www.moneyextra.com/credit-cards/
http://en.wikipedia.org/wiki/Credit_card

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2. Origin of credit card

3. Choosing the credit card

3.2 features of credit card

3.4 benefits to consumers and merchant

3.5 how many credit cards have been issued in India

3.6 types of credit cards

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6. Limitations of credit card

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Credit is the provision of resources (such as granting a loan) by one party to

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The first advertisement for credit was placed in 1730 by Christopher

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Cheques (checks) came into use in 1875.

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Whats the annual percentage rate?

The annual percentage rate, or APR, is the percentage applied to balances

How long is the grace period?

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How is the finance charge calculated?

What is the credit limit?

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What are the rewards?

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When balances don't have an applicable grace period, interest is applied

Credit Card Fees

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Electronic verification systems allow merchants to verify that the card is

Other variations of verification systems are used by ecommerce merchants

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In some countries, for example the Nordic countries, banks guarantee

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Major India Credit Card Types

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Gold Credit Cards

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OFFERS PROVIDED BY DIFFERENT BANK

AXIS BANK Credit Card Offers

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Domestic and International Ticketing - Axis Bank Cardholders (Debit /

Barclays Credit Card Offers

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See the offers for your Barclays Card at Futurebazaar.com

Citibank Credit Card offers

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Travel offers for Platinum Card holders.

Log on to Bookmyshow.com and book a ticket through you Deutsche

HDFC Credit Card Offers

*Get special cash back discount on retail spends from 15 september to 15

HSBC Credit Card Offers

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Exclusive offer for HSBC Gold card Holders, Click here

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WHAT IF CREDIT CARD IS LOST OR

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your account number