Credit card

The three main credit cards used in the world: Visa, MasterCard and American Express.

The credit card is a material bank identification instrument, which can be a plastic card with a magnetic stripe, a microchip and an embossed number. It is issued by a bank or financial entity that authorizes the person in whose favor it is issued to use it as a means of payment in businesses adhering to the system, by signing and showing the card. It is another modality of financing; therefore, the user must assume the obligation to return the amount arranged and pay interest, bank commissions and expenses.

Among the best known in the market are: Visa, MasterCard, American Express, Discover, Diners Club, JCB, UnionPay and Mir, among others.

Features

Users have limits regarding the amount of money they can have in accordance with the existing risk policy at any time and the personal characteristics and economic solvency of each user. You are generally not required to pay the full amount each month. Instead, the balance (or "revolving") accrues interest. You can make only a "minimum payment," as well as pay interest on the outstanding balance. If the balance is paid in full, no interest is paid.

The biggest advantage is the flexibility it gives the user, who can pay their balances in full on their monthly due date or can pay part of it. The card sets the minimum payment and determines the finance charges for the outstanding balance. Credit cards can also be used at ATMs or at a bank to avail of a cash advance, although unlike debit cards, interest is charged for the withdrawal, commission and, in some countries, a tax because it is a loan.

A credit card payment is a payment with M1 money, (credit money) that as credit]]s. Therefore, making a charge with a credit card effective depends on the solvency of the card issuer. That credit money is NOT from the person who owns the card; you have to pay it.

There is usually an annual fee for the use of the card.

When paying with a card in a store, the collector usually asks for identification (personal identification, driver's license, etc.) and requires the signature of the promissory note or voucher to prove that you own the card. There are some exceptions where you are not required to sign the receipt; this system is called "authorized without signature" and it is usually used in shops with large crowds of people, such as cinemas, fast food restaurants and other similar places. In some countries, the entry of a PIN is requested to authorize purchases in person.

The credit card account statement contains the expenses that a person made during the last month and the outstanding installments. The summary contains the total debt and also a minimum payment, so you can choose to pay only the minimum so as not to be in default and pay a fine; and finance the rest of the debt by paying interest.[1]

In case of fraudulent use, you must notify the financial institution or store that issued the card in writing, requesting that they cancel the charge and follow the procedures of each institution. The card issuer must prove that the purchase was made by the owner.

In the event of theft or loss of the credit card, the card issuer must be notified immediately. In Argentina, Law 25,065 obliges credit card issuers to have a 24-hour telephone system to receive complaints, they have to give you a complaint number and the issuer must inform businesses that the card has been canceled due to theft or loss.

Purchases with a credit card may have various insurances on the financed balance.

There are four types, namely: classic, gold, platinum and signature or black; each depends heavily on the limit of credit they can grant.

Form and origin

Materially, the credit card consists of a piece of plastic, whose dimensions and general characteristics have acquired absolute uniformity, due to the virtuality of use and technical necessity. The size of most credit cards is 85.60 mm × 53.98 mm (3³/₈ inches × 2¹/₈ inch) and conforms to ISO/IEC 7810 ID-1.

Each instrument contains the identification of the issuing entity and the affiliate authorized to use it, as well as the time period during which said instrument will remain valid. It usually also contains the signature of the legitimate bearer and a sector with electronic entries perceptible through appropriate instruments. These entries identify that particular card and enable the bearer to dispose of the credit that comes with presenting it, without stamping his signature.

Regarding the origin, we can say that it appeared in the early XX century in the United States. Specifically, the idea arose within the offices of Chase Manhattan Bank, at the hands of its director, under the professional card modality. It was instituted in its majority form around the 1940s and spread from the middle of the century.

Card number

It is a main account number for credit cards and bank cards. It has a certain internal structure and a common numbering system. Credit card numbers are a special case of ISO/IEC 7812, Bank card numbers.

The ISO/IEC 7812 standard contains a one-digit Master Industry Identifier (MII) number, a six-digit Issuer Identification Number (IIN), an account number, and a Single digit checker calculated using Luhn's algorithm. The MII is considered as part of the IIN.

The term "Issuer Identification Number" (IIN) replaces the previously used "Bank Identification Number" (BIN). See ISO/IEC 7812 for more information.

Technologies

In the 21st century there are three technologies available for credit cards.

The traditional one is the magnetic stripe. However, credit cards with microchips are spreading. This technology was developed by Roland Moreno. An electronic circuit integrated into the card performs most of the controls related to its use and offers more security to the user and to the issuing bank: the microchip integrates electronic protection devices that prevent its violation or the unauthorized reading of the information it contains. The latest technology is contactless, which allows credit cards to be used by bringing them closer to the terminal or POS, without the need to introduce it to be identified. As a peculiarity, contactless technology allows you to pay with a card for purchases of less than €20 without the need for a signature or PIN, making the purchase of items in stores more agile.

Digital credit cards

In recent years, sustainable alternatives have appeared, such as credit or debit cards in digital format, which allows transactions to be carried out without the need for a plastic card. Some banks such as Banco Falabella, Nubank or Scotiabank have begun to use this new technology in Latin America.