2. CREDIT CARD
• A credit card is a payment card issued to users
as a system of payment. It allows the
cardholder to pay for goods and services
based on the holder's promise to pay for
them.

3. History of Credit Card
• Invented in 1887 by Edward Bellamy.
• 1st - credit card - 1920s in US.
• Bank of America - BankAmericard in 1958
Chargex – Visa Card
• MasterCard - 1966 Group of Banks in US
• In 1966 - 1st Non-US Credit Card was issued by
Barclays’ Bank in the UK.

4. CREDIT CARD NUMBER STRUCTURING
• 1ST – 6 No’s – Bank of Credit Card.
• Next – 9 No’s – Individual A/c No.
• Final Digit – Validity Check Code.
• Extra Codes - Will be Issue & Security Codes.

5. CREDIT CARD MARKET SHARE IN INDIA
• RBI - 17.4%(2012 – up to Apr)
16.2 %(2011)
• State Bank of India & Punjab
National Bank Contributes More
for the Growth.
• Card base of public sector banks
expanded 7.4 % yoy to 3.09mn.
• Private and foreign banks
declined 1.5 % yoy to 14.7
million.
• New Entrance - IndusInd Bank
acquired Deutsche Bank’s
Standard Chartered Bank
bought Barclays’ card business
in India
• Credit Cards in India - 17.77
million

6. PROTOTYPE CREDIT CARD
FRONT SIDE
• Issuing bank logo
• EMV chip on "smart cards"
• Hologram
• Credit card number
• Card brand logo
• Expiration Date
• Card Holder Name
• contactless chip
BACK SIDE
• Magnetic Stripe
• Signature Strip
• Card Security Code

7. Parties involved
• Cardholder
• Card-issuing bank
• Merchant
• Acquiring bank
• Credit Card association
• Transaction network
• Affinity partner
• Insurance providers

8. TRANSACTION STEPS
Authorization
Charge backs Batching
Clearing and
Funding
Settlement

9. Benefits to customers
• The main benefit to each customer is
convenience.
• Compared to debit cards and cheques, a credit
card allows small short-term loans to be
quickly withdraw.
• Different countries offer different levels of
protection.

10. Benefits to merchants
• More secure than other forms of payment
• They discourage theft by the merchant's
employees and reduce the amount of cash on
the premises.
• Finally, credit cards reduce the back office
expense of processing cheques/cash and
transporting them to the bank.

11. Grace period
• A credit card's grace period is the time the
customer has to pay the balance before
interest is assessed on the outstanding
balance.
• Grace periods may vary, but usually range
from 20 to 55 days depending on the type of
credit card and the issuing bank.
• There are some credit cards that will only
apply finance charge.

12. FACTORS DETERMINING CREDIT CARD
INTEREST RATES IN INDIA
• Repo rate
• Reverse repo rate
• Prime Lending Rate (PLR)

13. VARIOUS KEY FACTOR TO CHOOSE
THE BEST CREDIT CARD
• Credit Limit
• Credit Time Offered
• Rate of Interest
• Eligibility Criteria
• Acceptance of the Card
• Joining fee
• Annual fee

14. DEBIT CARDS VS CREDIT CARDS
• The differences and comparative advantages
and disadvantages of the two types of popular
plastic money on offer in India.
• The basic difference between the two is the
fact that a credit card takes the form of a
personal loan from the issuing bank to the
consumer, while a debit card is more like a
cheque: money is directly deducted from a
person’s bank account to pay for transaction.

15. THE DISADVANTAGES OF THE DEBIT
CARD:
• There are almost no security measures and a person can
use a debit card to clean out the cardholder’s account, if he
knows the PIN.
• A debit card does not prevent the account from being
overdrawn, and has less affordability than a credit card.
• A debit card also has a narrower acceptable area in India,
with many merchants not accepting it since they are
charged a fee every time they do.
• The major problems of a debit card are negated by instant
notifications of transactions via sms and emails. A credit
card or a debit card are both useful tools that must be used
carefully and sparingly to maximize your advantage.

16. ADVANTAGES OF A CREDIT CARD
• Flexile spending limit
• Most features of a debit card such as withdrawal of
cash are available on credit cards as well.
• Wider acceptance and recognition, especially in online
transactions.
• Greater security measures and checks than debit card.
• Credit cards allow for cash back and bonus points
schemes that a debit card is not eligible.
• A credit card can be used as a convenient way to check
and record your spending.
• There is a fixed credit limit, a cardholder cannot
overstretch his purchases.

17. THE DISADVANTAGES OF
• Hidden costs.
CREDIT CARD
• A debt trap for the cardholder.
• Cases of fraud are extremely common today.
• Credit cards can be used at ATM cards, but considerable processing fee
required.
• Debit cards provide access to ready money in a more convenient and
less invasive form than cheques, and allow for a faster withdrawal of
cash.
• Debit card user who are not qualify for a credit card, the advantage is
spent on money he/she possess in their accounts.
• A debit card can be used to withdraw money from an ATM with no
processing charge.
• A debit card is a more convenient way of carrying cash around.

18. Security problems and solutions
• Credit card security relies on the physical
security of the plastic card as well as the
privacy of the credit card number.
• Whenever a person other than the card owner
has access to the card or its number, security
is potentially compromised.
• Merchants would often accept credit card
numbers without additional verification for
mail order purchases.

19. • Many require the card and also requires
signature for security purpose.
• A lost or stolen card can be cancelled, if this is
done quickly, will greatly limit the fraud that
can take place in this way.
• Code 10 calls are made when merchants are
suspicious about accepting a credit card.
• The operator then asks the merchant a series
of YES or NO questions to find out whether the
merchant is suspicious of the card or the
cardholder.

20. Inflated pricing for all consumers
• Merchants that accept credit cards must
pay interchange fees and discount fees on all
credit-card transactions.
• In some cases merchants are barred by their
credit agreements from passing these fees
directly to credit card customers, or from setting
a minimum transaction amount.
• The result is that merchants may charge all
customers higher prices to cover the fees on
credit card transactions.

21. Different Credit Cards Advantages
ICICI Bank Preferred Gold Credit Barclays Bank Smart Budget Credit Jet Airways Citibank Platinum
Card Card Credit Card
Purchase Interest Rate: 3.15% p.m Purchase Interest Rate: 2.95% p.m Purchase Interest Rate: 3.19% p.m
Cash Withdrawal Rate: 3.15% p.m Cash Withdrawal Rate: 0.00% p.m Cash Withdrawal Rate: 2.50% p.m
Annual Fee: No Rewards: Yes Annual Fee: No Rewards: No Annual Fee: Yes
Min. Monthly Payment: 5 Min. Monthly Payment: Rs. 400 Rewards: Yes
Grace Period: 20 to 50 days Grace Period: 50 days Min. Monthly Payment: 5%
Grace Period: 30 days
State Bank Cash Plus ATM-cum- SBI Platinum Credit Card HDFC Bank Titanium Credit Card
Debit Card
Purchase Interest Rate: 3.10% p.m Purchase Interest Rate: 2.65% p.m
Purchase Interest Rate: 0.00% p.m Cash Withdrawal Rate: 3.10% p.m Cash Withdrawal Rate: 2.50% p.m
Cash Withdrawal Rate: 0.00% p.m Annual Fee: No Rewards: Yes Annual Fee: Yes Rewards: Yes
Annual Fee: Yes Rewards: No Min. Monthly Payment: 5% of Min. Monthly Payment: 5%
Min. Monthly Payment: NA outstanding balance or Rs 200, Grace Period: 50 days
Grace Period: Not Applicable whichever is higher
Grace Period: Upto 50 days