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redit cards are a form of substitute for direct payments

Updated on March 20, 2016


Credit cards are a form of substitute for direct payments. This form of payment is made based on reputation. Cardholders do not have to pay cash when buying. Instead, the Bank will advance the money to the seller and the cardholder will pay back to the bank transactions. Credit cards allow customers to "amortization" payment amount in your account. Cardholders do not have to pay the full balance on your statement monthly transactions. However, the cardholder must pay the minimum payment by the due date indicated on the statement. Other credit card with a debit card because the money was not debited directly into the deposit account of the cardholder immediately after each purchase or cash withdrawal.

Credit cards are issued after the service provider approved by the approved credit card account, then the cardholder can use it to make purchases at the point of sale to accept cards.

When shopping, commitment card users will pay for the card issuer. Cardholders express this commitment by signing up with itemized bills to the amount of the card, or by entering a personal identification number (PIN). Also many sales locations also accept how to verify by phone or over the internet to verify the transactions is called transaction absentee or absentee cardholders card (CNP - Card / Cardholder Not Present).

Cardholders can also withdraw cash from the credit card account (cash advance) if desired

People use many electronic systems for verification within seconds the validity of the card and check card's credit limit was sufficient to pay for purchases not. The verification is done by a card reader (POS - Point of Sale) connected to the receiving bank (acquiring bank) of the sellers. The reader reads data from the card's magnetic strip or from the chip on the card. New cards using the IC card is often called "chips" or EMV cards.

The online sales often use a different method to verify the card account, in which cardholders often provide additional information such as the security code printed on the back of the card, the cardholder address or password specified before.

Every month, cardholders get a list showing which transactions done by card, the fees and the total amount owed. After receiving the statement, the cardholder has the right to appeal dismissed some transactions he / she deem improper. If there is a complaint, the due date, the cardholder must pay a portion of predetermined minimum, or more, or pay off debt. Provider of credit services will charge interest on the arrears (usually with higher interest rates in most other forms of debt). Many financial institutions can arrange for automatic repayment, cutting money from the bank account of the cardholder (if there is enough money) to avoid delay repayment.


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