Credit Cards

Credit Cards - L-11 Credit Cards(IBFS Prof C Anand Faculty...

Info icon This preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
1 L-11: Credit Cards (IBFS) Prof. C. Anand Faculty – IBS, Hyderabad
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 Contents This lesson deals with:- The Concept of Credit Cards Parties to Credit Cards Features of Credit Cards (Credit/Charge/Debit Cards) Operational Aspects of Credit Cards Credit Cards Business in India: Emerging Scenario Issues/Problems of Credit Cards
Image of page 2
3 1. The Concept of Credit Cards Credit Cards/Plastic Money refers to substitution of usage of currency at the time when transaction of buy/sell is taking place by using a plastic card representing such substitution, which may be due to postponement of payment through the card that is issued. Plastic money protects the user from risks of carrying cash. It is exclusive property of cardholder. Thus Credit Card is a ‘Pay Later Product” along the dimension of time for settlement/payment. These cards are a form of consumer loans, revolving credit account that has a credit line of a specific amount that can be borrowed in part or full. As the outstanding balance is paid, the available credit line is restored for use again.
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
4 2. Parties to Credit Cards : 1. Card Issuers: Mainly Banks like Citi, HSBC, HDFC, SBI, Standard Chartered, ANZ Grindlays, etc., who generally offer a credit period of 30-45 days at 2.5% on outstanding amount remaining unpaid on expiry of credit period; 2. Cardholders : These are individuals and business organizations based on gross and net income levels;
Image of page 4
5 2. Parties to Credit Cards (contd.) 3. Member Establishments (MEs) : These are the well established and reputed establishments with standing and reputation enlisted by the Card Issuer who accepts valid credit cards towards payment for the goods sold or services rendered by them to the cardholders in lieu of cash. They are retail outlets, departmental stores, restaurants, railways, airlines, hotels, travel agencies, gas stations, etc. MEs will have to pay to the Card Issuers a certain percentage of discounts on the credit card transactions;
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
6 2. Parties to Credit Cards (contd.) 4. Member Affiliates (MAs) : The Card Issuers may sometimes enter into a tie-up of credit card with MAs - for interbank tie ups, both Foreign and Indian Banks - whose names and logos would be printed on the cards, which arrangement enlarges the scope and operations of plastic cards (e.g. Master Card International, Visa International, American Express, etc). 5. Clearing Agencies : A card issuer affiliates itself with Master Card International or Visa International which act as clearing agencies, enabling cardholder of one affiliate to use his card at MEs of another affiliate.
Image of page 6
7 3. Features of Credit Cards (Credit/Charge /Debit Cards) A credit card is a payment mechanism which enables the holder of the card to purchase goods or
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern