Credit card

Credit card

Even though we may think that the concept of credit card is new it is actually more than a 100 year old concept. The first conception of credit card was given by Edward Bellamy in 1887 in his utopian novel “Looking Backward”. According to various sources Edward Bellamy used the term ‘credit card’ eleven times in his book. The credit card of today is actually the successor of a variety of merchant credit schemes. United States first used credit cards to sell fuel for automobiles. Due to a growing number of automobiles in the 1930’s several companies started to accept each others credit cards even though the card concept was implemented in the 1920.

This idea of using merchant account services to pay merchants using a card was invented in 1950. This was mainly done to consolidate multiple cards. The first general purpose credit card was called The Diners Club Card, it was actually an agreement between Dine and Sign. This merger created a whole generation of credit cards to follow in the later years. Shortly after the diners card American Express and Carte Blanche came out with their own brands of credit cards which used merchant account services and their cards were also widely accepted.

Nowadays credit cards are issued only after an account has been approved by the credit provider and only after that can the user make purchases at various merchants accepting the cards. Higher the reputation of a single brand of card means that more merchants are willing to accept payments made by that particular brand of card. When the consumer makes a purchase, the credit card user agrees to pay the card user. The card holder will have to sign a receipt with a complete record of the card details like name of the holder PIN or Personal Identification Number and various other details. With the advent of technology credit cards are the only means to do online shopping and the card holder does not even have to go to the store to buy things. This sort of purchase is called a CNP, Cardholder Not Present.

Electronic verification is of utmost importance in credit card processing. Because the merchant has no clue about the account balance of the card holder or whether he/she has the credit limit to pay for the bought item. This verification is performed using a credit card payment terminal or a point of sale terminal. Whatever terminal is used, it is in direct communication with the bank to the merchants account. A magnetic stripe on the card holds all the data of the card

Every month the credit card holder gets a bank statement indicating the purchases made with that card in that particular month. The card holder than pays the outstanding bills, sometimes in minimum proportion by a due date or may even choose to pay a higher amount up to the entire owned amount. Some times interest is added to the amount owned and that is how credit card payment is processed.

Article Directory: http://www.article-tree.com

DSS Boxes is author of this article on credit card processing. Find more information about credit card processing here.

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated