One of the delivery channels of the banking services is Credit Card. Due to the massive thrust by the Prime Minister of India on technology and easy availability of credit, the credit cards are becoming highly popular nowadays. It is a cost effective way of providing value added services to banks’ customers. Credit Cards are issued to credit worthy clients for purchase of goods or services from authorised merchant establishments on the credit guarantee of issuer of credit card. It is popularly called plastic money.
Benefits to Credit Card Users
- No need to carry cash or write cheques for making payments at merchant establishments. You can make payment upto the sanctioned limit on credit card.
- You get an interest free credit period, depending upon the issuing bank and the card scheme, i.e. the normal card and gold cards, as offered by various banks. The interest free credit period ranges from 15 days to 51 days.
- Cash can be withdrawn up to a ceiling, within the overall credit limit from the banks’ branches or ATMs (Automated Teller Machines).
Disadvantages to Credit Card Holders
- If you are a spendthrift, it often results in over spending.
- Frauds may also occur, due to loss of card in the intervening periods.
- Since signatures are already on the cards, forging of signatures could cause a loss to the card holders. Such kind of a forged signature loss can be avoided with the use of photo credit cards (Credit cards with a photograph of the User).
How to Use Your Credit Card
To use your credit card at merchant outlet(shops), you may follow the following steps:
- The merchant will swipe/dip your card at a PIN enabled POS terminal
- The merchant will then enter the amount to be paid by you as per your invoice
- The POS terminal will ask for the PIN to be entered
- You need to enter your 4 digit Credit Card PIN on the POS machine. Take your card out once the transaction is complete
To use your credit card for online transaction, you may follow the following steps:
- While making payments through the Internet, make sure you are using a secure site. It will have a lock icon in the status bar of your web browser. This lock icon indicates that a site is using an encryption technology during the transmission of your sensitive data.
- Do not respond to phishing e-mails that falsely claim to be from a bank and ask you to disclose your personal and bank related confidential details. No Bank will ever ask you to send your personal banking details on email or phone.
- Get yourself enrolled for 3D Secure (Verified by Visa (VbV)/ MasterCard SecureCode (MCSC)). This is now mandatory for carrying out online transactions.
- Avoid accessing your Internet banking account on unsecured public computers (e.g. internet cafes).
- Once you have completed your online banking transactions, remember to log-off by clicking on the “log-off” option. Close your browser and lock your computer if it is left idle.
The Card Verification Value (CVV) for Visa, MasterCard and Discover Card is the final three digits of the number printed on the signature strip on the back of your card. CVV for American Express appears as a separate 4-digit code printed on the front of your card, above the American Express logo. It is usually required for Online payment transactions.