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Credit Card

Credit Card

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Published by yogeshaggarwal88
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Published by: yogeshaggarwal88 on Nov 26, 2009
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10/21/2011

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Introduction
A
credit card
is part of a system of  paymentsnamed after the small plasticcard issued to users of the system. It is a card entitling itsholder to buy goods and services based on the holder's promise to payfor these goods and services.
The issuer of the card grants aline of  creditto theconsumer (or the user) from which the user can borrow money for payment to amerchantor as acash advanceto the user. A credit card is different from acharge card, where a charge cardrequires the balance to be paid in full each month. In contrast, creditcards allow the consumers to 'revolve' their balance, at the cost of havinginterestcharged. Most credit cards are issued by local banksor  credit unions, and are the shape and size specified by theISO/IEC  7810standard as ID-1. This is defined as 85.60 × 53.98 mm in size.
 
How credit cards work 
This article may betoo longto comfortably read and navigate.Please consider splitting content into sub-articles and using thisarticle for asummaryof the key points of the subject.
(May2009)
Credit cardAn example of the front in a typical creditcard:1.Issuing bank logo
2.
EMV chipon "smart cards"
3.
4.
Credit card number 5.Card brand logo6.Expiration Date7.Card Holder NameAn example of the reverse side of a typical credit card:
1.
2.
SignatureStrip
3.
 
Credit cards are issued after an account has been approved by thecredit provider, after which cardholders can use it to make purchasesatmerchantsaccepting that card.When a purchase is made, the credit card user agrees to pay the cardissuer. The cardholder indicates consent to pay by signing areceipt with a record of the card details and indicating the amount to be paidor by entering a personal identification number (PIN). Also, manymerchants now accept verbal authorizations via telephone andelectronic authorization using the Internet, known as a'Card/Cardholder Not Present' (CNP) transaction.Electronic verificationsystems 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 timeof purchase. The verification is performed using acredit card payment terminalor Point of Sale(POS) system with a communications link to the merchant'sacquiring bank . Data from the card is obtained from amagnetic stripeor chipon the card; the latter system is in theUnited  KingdomandIrelandcommonly known asChip and PIN, but is more technically anEMVcard.Other variations of verification systems are used byecommerce merchants to determine if the user's account is valid and able to acceptthe charge. These will typically involve the cardholder providingadditional information, such as thesecurity codeprinted on the back of the card, or the address of the cardholder.

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