Credit+Card+Background+Information




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 A credit card is a card entitling its holders to buy various goods and services with the holder’s promise to pay for these goods and services. The issuer of the credit card gives the card holder a line of credit which is used for the borrowing of money to give to a merchant or as a cash advance to the user. A cash advance is when costumers can withdraw cash from an ATM or over the counter at a bank. Credit cards are issued to a costumer after one’s account has been approved by the credit provider. The credit provider has to make sure that the consumer can pay back the loaned money used to make purchases. When a purchase is made, the user of the credit card agrees to pay the card issuer. The consumer indicates that he or she will pay back the card issuer by signing a receipt. The receipt contains a record of the card details which includes a personal identification number. Merchants now accept verbal authorizations using the internet or the telephone which is another way for a costumer to make purchases. This form of transaction is called Card/Cardholder Not Present. Every month, the card user is sent a statement indicating all the purchases used with the credit card which includes all the outstanding fees and the total amount owed to the credit card issuer. A minimum portion of the bill must be paid by a due date although; some choose to pay a greater portion of their bill all at once. The card issuer charges interest on the amount owed each month if the balance is not paid in full. This helps to avoid late payments as long as the cardholder has sufficient funds. ======

 Sources Sited:www.wikipedia.com


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 A grace period occurs after your credit card bill is already supposed to be paid. If you do not pay your credit card bill, the company will give you a grace period, which is a certain amount of time to pay the credit card bill before you get charged interest. There are times when credit card companies will not give you a grace period. This would occur when you do not pay your previous credit card bill. When this happens, the credit card company usually charges interest to your previous bill that was not paid and your current bill. Some credit card companies charge interest on your previous and current bill, but some companies will only charge interest on the previous unpaid bill and not the current one. ======

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 C. Merchant side: what happens from the merchant's perspective?
The merchant is charged a few for the privilege of accepting credit and debit cards. They usually have to pay between $.10 and $.50 cent for each transaction. There is also a time delay on when they receive payment for their good or service. They are forced to wait until the credit card holder pays their bill at the end of the month. Then the credit card company is the one that pays the merchant, not the person directly. by Kristin Murphy  [|http://en.wikipedia.org/wiki/Credit_card#Benefits_to_merchants] 

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 There are numerous types of credit cards. One type is the standard credit card, which is the most common and readily available kind. One example of a standard credit card is a balance transfer card. These cards allow consumers to transfer a high interest credit card balance onto a card with a low interest rate. Another standard credit card is a low interest credit card. These offer low annual percentage rates (APR) that can become higher or they have a fixed APR. These are useful when a consumer wants to make a large purchase, since it allows people several months to pay it off. Another type of credit card is the credit card with rewards programs. These credit cards give consumers incentive to make purchases. An example of a credit card with rewards is a cash back credit card. As stated in its name, the card allows people to earn cash back on purchases that they make. There is also a general reward points credit card, which is similar to a cash back card because users earn points for purchases and later receive cash for them. Also, there are hotel or travel points credit cards, which work the same way but only when purchases are made for hotels or flights. The same concept applies with major retailers, who issue retail rewards credit cards, as well as gas cards which give people money back for spending money at specific places. ======

source: http://www.creditcards.com/credit-card-news/types-of-credit-cards-1267.php
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<span style="font-family: 'Times New Roman',Times,serif; color: rgb(255, 0, 92);"> E. Discuss fraud and security issues. "fraud and secuirty issues are very big with cerdit cards. There has been many problems with cerdit cards being stolen or someone finding out the cerdit card information. When this happens a person can have to pay for things that they never bought on their cerdit card. There are many ways where this is trying to be stopped and made so cerdit cards are alot more safer. One way is controlled payment numbers.This is when you are normally shopping online you would only have a certain number or certain amount to use in a certain amount of time. By having this it makes it so that you are not actually giving out your real information when shopping online. Another way fraud is trying to be stopped is using a chip and pin instead of a cerdit card. This would make it so you could not shop on line you could only shop at a store and use it at a place that time. It would also effect where it could be used. It would make it so that it could only be used in certain countries. Another benefit is that if someone was to try and use the card the person would be notifide right away and if someone did try to use it online it would be declined. A third way fraud has tried to be elmitiated is by having smart cards to make fake cards harder to make. Even with all of these ideas though none of them have worked yet. " by Sarah Reeder ======