What Is Credit Card? Meaning, Definition, Size As Well As Anatomy

1. Meaning of Credit Card

The glossary of credit carte du jour is equally follows:

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1. Credit way to borrow something from someone, for example, to borrow money from a bank.
2. Card is a modest apartment object made of a laminated plastic canvas in addition to other materials.
3. Cardholder is someone to whom a carte du jour gets issued in addition to who has an obligation to remit all necessary financial borrowings made on his card. The cardholder may live an private or organization. Here,
   1. Issued to someone way i is authorized to usage a card.
   2. Obligation way a moral or legal liability to do something.
   3. Remit implies to pay dorsum the money.
4. ISO is an abbreviation of International Organization for Standardization.
5. IEC is an abbreviation of International ElectroTechnical Commission.
6. NBFC is a short-form of Non-Banking Financial Company.
7. ISO/IEC 7810 is an international criterion that specifies (sets or defines) physical characteristics similar size, thickness, etc. for identification cards.
8. ISO/IEC 7811 is a laid of nine standards ranging from 7811-1 to 7811-9. It specifies traditional information recording techniques beingness used on the magnetic stripe of ID-1 format identification cards.
9. ISO/IEC 7812-1 is an international criterion that defines a carte du jour numbering scheme for identification cards. It is used to seat a carte du jour issuing entity, similar a banking concern or NBFC.
10. ISO/IEC 7813 is likewise an international criterion that specifies the information construction in addition to information content of Track 1 in addition to Track 2. These tracks are introduce on the magnetic stripe of an identification carte du jour in addition to are used to start (begin or initiate) fiscal transactions.
11. Embossing is a procedure inward which raised numbers, letters, figures, etc., gets embossed (meaning molded or beingness craved) on an identification card.
12. Checksum is a single-digit added to the halt of a credit carte du jour number to cheque (validate) the authenticity (genuineness) of it.
13. Credit Limit is the maximum amount upwardly to which a lending entity such equally a banking concern or NBFC tin laissez passer on coin to its customers. It is of ii principal types, viz., cash withdrawal bound in addition to credit transaction limit.
14. Cash's withdrawal bound is the maximum amount of coin that tin live taken out amongst the assist of a credit card.
15. Credit-transaction bound is the highest bound assault credit transactions (of purchases) made through a credit card.
16. Usually, cash's withdrawal bound is less than the credit transaction limit.

The next 6 points clarify the important of credit card:

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1. Credit carte du jour is a plastic carte du jour issued in addition to authorized past times a banking concern or NBFC ready to lend coin (i.e. laissez passer on credit) to its customer.
2. Primarily, it is a synthetic carte du jour made from a laminated plastic canvas in addition to other materials similar paints, magnetic stripe, microchip (IC), gelatin, hologram, thus on.
3. It entitles (authorizes) the client to purchase goods in addition to services from merchants, traders in addition to other parties, based on credit sanctioned to him.
4. Its usage should live inside a prescribed credit limit. This bound is assault earning capacity in addition to creditworthiness of a cardholder equally communicated (settled) past times an entity (bank or NBFC) issuing it to its customer.
5. It gives a client a suitable pick to conception payments for goods in addition to services that may live most necessary to him on a day-to-day basis.
6. By its usage, client promises the repayment of credit transactions executed past times him. Here, the repayment along amongst involvement (as applicable) must live paid to banking concern or NBFC at a later on agreed (contracted) date. Repayments along amongst accrued involvement are made either after a current of 30-45 days or on a monthly billing basis.

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2. definition of Credit Card

It is hard to laissez passer on a perfect definition of credit card. However, attempts tin live made to define it nether a general, financial, line concern or industrial perspective. Few selected statements given below volition assist yous derive its narrow in addition to broader meaning.

Here are iii definitions of credit carte du jour depicted in addition to listed below.

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These definitions beingness based on a:

1. General sense,
2. Financial perspective, and
3. Business or industrial context.

1. General sense:

“Credit carte du jour is a suitable option for cash payment or credit payment or deferred (i.e. installment) payment. It is used to execute transactions compiled through electronic devices similar a carte du jour swapping machine, reckoner amongst Internet facility, thus on.”

2. Financial perspective:

“Credit carte du jour is a facility provided past times a banking concern or NBFC. It gives its customers a preference to cause got a short-term borrowing of funds unremarkably at the dot of transaction (i.e. piece purchasing something or carrying out a sale).”

3. Business or Industrial context:

“Credit carte du jour is a laminated plastic carte du jour issued past times a banking concern or NBFC to laissez passer on its client a preference to borrow funds on a short-period basis. Here, the involvement is imposed on a cardholder for lending short-term finance. This involvement is ofttimes charged either after a calendar month or 30-45 days later, i time credit transactions cause got occurred. The carte du jour bound is pre-communicated inward written correspondence amongst its holder.”

3. Size of Credit Card

The criterion dimensions or size of credit carte du jour is equally follows:

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1. Credit carte du jour has a superlative of 2.125 inches (i.e. 53.98 mm or 5.4 cm).
2. It has a width of 3.370 inches (i.e. 85.60 mm or 8.5 cm).
3. It has a thickness of nearly 0.030 inch (i.e. 0.76 mm or 0.076 cm).
4. Its 4 corners (i.e. edges) are rounded or curved past times a circle of radius (r) measuring 0.125 inch (i.e. 3.18 mm or 0.318 cm).
5. The inward a higher house measurements are averages of the maximum in addition to minimum values defined for credit cards using ID-1 format of ISO/IEC 7810.
6. ISO/IEC 7810 is an international criterion that specifies physical characteristics similar size, thickness, etc. for identification cards.
7. The identification cards used for banking purposes include ATM, credit, debit transactions, thus on. These are helpful to ship out quick in addition to shine fiscal activities on a day-to-day basis.
8. Though ID-1 format of ISO/IEC 7810 is an International standard, variations may rarely tumble out from province to province in addition to fifty-fifty from i credit carte du jour issuing entity to another.

4. Anatomy of Credit Card

The anatomy of credit carte du jour tin live studied past times analyzing its front end in addition to dorsum side.

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1. Sample picture of the aspect upwardly or front end side of a credit card.

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Credit carte du jour has next details:

1. Issuing entity's logo,
2. Payment processor's logo,
3. Hologram,
4. Expiration date,
5. Cardholder's name,
6. Card number,
7. Individual line concern human relationship identifier number,
8. Issuer identifier number (IIN),
9. Embedded microchip,
10. Major manufacture identifier (MII),
11. Issue date, and
12. Bank identification number (BIN).

2. Sample picture of nurture or dorsum side of a credit card.

Image credits © Gaurav Akrani.

Credit carte du jour shows next details:

1. Security code (card verification number),
2. Magnetic stripe,
3. Signature panel, and
4. Additional information.

Now let's hash out inward a higher house details of credit card.

1. Issuing entity's logo

Logo of an issuing entity (bank or NBFC) is a unique graphic mark.

The features of the logo are equally follows:

1. Logo is an emblem of the entity that issues a credit carte du jour inward gild to lend coin to its customers.
2. Its principal role is to ease in addition to assist instant world recognition of an issuer.
3. It's a symbol that helps people seat the call of banking concern or NBFC that has issued a credit-card.

2. Payment processor's logo

A banking concern issues a credit carte du jour inward collaboration amongst some payment processing company. To dot this tie-up, banking concern on its issued cards likewise puts (mentions) a logo of its partnered carte du jour payment processor.

Payment processor's logo helps a cardholder (user) to seat which payment processor volition procedure in addition to compile his credit card's transactions. It likewise helps him to take away an appropriate payment processor piece shopping in addition to filing payment forms.

Some leading payment processors:

1. Visa,
2. MasterCard,
3. Discover,
4. American Express (AMEX), and
5. Japan Credit Bureau (JCB).

3. Hologram

Hologram is a 3D picture either of an object, private or some special symbol that has been projected in addition to captured on a 2D apartment surface.

Important reasons why hologram is on a credit card:

1. Hologram acts equally a seal of originality.
2. It helps to authenticate a genuine construct from a counterfeit one.
3. It aids inward distinguishing an master copy carte du jour from imitation (dummy) cards.
4. It acts equally i of the security measures to avoid forgery.

4. Card number

Card number is a long in addition to unique number assigned to a credit card. Often, it is embossed (raised) on its aspect upwardly or the front-side. It is 16-digits inward length in addition to tin live extended upwardly to a maximum bound of 19-digits.

An ISO/IEC 7812-1 carte du jour number is typically 16 digits long in addition to grouped inward 4 sets amongst 4 digits inward each set. It consists of:

1. Major Industry Identifier (MII) digit value,
2. Bank Identification Number (BIN) immediately replaced amongst an Issuer Identifier Number (IIN),
3. Individual Account Identifier, and
4. Checksum or cheque digit.

First single-digit (from left) of a credit carte du jour number is a Major Industry Identifier (MII) digit value. It signifies the category or type of the entity that issued a card.

Note: Click on inward a higher house sample picture of the front end side of a credit carte du jour to larn a zoomed preview in addition to detect out where just is MII digit value located.

Refer next tabular array to seat Major Industry Identifier (MII) digit values represents which category of an issuer.

Image credits © Gaurav Akrani. Source © Wikipedia.

The kickoff laid of 4 digits (which likewise includes MII digit value) of a credit carte du jour number is called Bank Identification Number (BIN). Printed inward modest fonts below the carte du jour number BIN is located on its front-left side.

First 6 digits of a credit carte du jour number (including the unmarried MII digit value) stand upwardly for an Issuer Identifier Number (IIN) of a carte du jour issuing entity. It is required to run inward the global, inter-industry in addition to intra-industry interchange.

As per ISO/IEC 7812-1, BIN is immediately replaced past times IIN. Following paragraph explains reasons behind it.

With the rising need in addition to recognition of credit cards, the fiscal institutions opine the replacement of BIN amongst IIN. The role of such replacement was to comprehend wider areas of fiscal services, to convey diverse service providers nether i roof in addition to likewise to ease their identification. The IIN number consists of initial 6 digits when compared to BIN, which comprises of alone kickoff four. This incorporated modify has resulted inward to a greater extent than prompt in addition to proper assistance to compile in addition to to consummate the carte du jour processing.

Digits starting from 7th seat upwardly to the minute lastly seat (7 to (n-1)) makes an Individual Account Identifier (IAI).

• Here, n equals the full number of digits institute inward a credit carte du jour number.
• For example, if n=16, in addition to thus the IAI number would start from 7 to (16-1) i.e. from 7th seat to the fifteenth position.
• The IAI number is variable inward length in addition to tin accomplish upwardly to a maximum of 12-digits.

Final (last or ending) single-digit of a credit carte du jour number is called a Check Digit or checksum.

• As per ISO/IEC 7812-1, the Checksum is a digit added to the halt of a carte du jour number to assist to verify (confirm) its accuracy in addition to validate its authenticity (genuineness).
• Most carte du jour numbers encoded amongst Checksum digit usage LUHN Formula based on LUHN Algorithm or MOD-10 method.
• Thus, ISO/IEC 7812-1 credit carte du jour numbering scheme gives details on:
  • The type of industry,
  • An issuing entity,
  • Customer's information,
  • Check Digit, thus on.

5. Expiration Date

Expiry Date of a credit carte du jour is the lastly twenty-four hr current until which it remains valid.

The lastly Date of validity is beingness referred equally VALID THRU in addition to read equally ‘valid through.’

It uses the MM/YY appointment format. Here:

1. MM implies a Month, and
2. YY stands for a Year.

For example, if 12/22 is on a credit card, in addition to thus it is valid until 12^th calendar month of twelvemonth 2022 i.e. its ‘VALID THRU’ appointment is Dec 2022. In other words, nosotros tin say that it volition larn expired in addition to lose its validity on 1^st Jan 2023.

6. Cardholder name

Cardholder call is a given string of embossed or printed alphabets on the front end side of a credit card.

It either mentions kickoff in addition to lastly call of an private or specifies the registered call of a company, theatre or an organisation asset the account.

To consummate online transactions, it is mandatory that call on the carte du jour must gibe its cardholder's name.

7. Embedded Microchip

Embedded Microchip is on the front end side of a credit card. It is an electronic storage device commonly known equally a semiconductor memory.

Some essential features of Microchip are equally follows:

1. Microchip acts equally an enhanced protection shield of a carte du jour that safely stores confidential credentials of a cardholder. The credentials stored inward it include:
   1. Personal Identification Number (PIN),
   2. Details of a credit carte du jour issuing entity, thus on.
2. It provides a comprehensive security to forestall cloning or duplication of a credit card.
3. It encrypts the sensitive information it stores. If hackers scan a credit carte du jour amongst some electronic spying device, in addition to thus they volition alone fetch encrypted junk in addition to non the master copy information that the chip contains. This encrypted fighting is almost useless to them equally it is real hard to decode in addition to misuse it intentionally.
4. It has a superior semiconductor retentiveness in addition to meliorate processing capacity.
5. It acts equally a mandatory in addition to essential security characteristic of a credit card.

8. Issue date

Issue appointment is the starting appointment from when a credit carte du jour becomes valid in addition to gets ready to live used past times a cardholder until its twenty-four hr current of expiry.

On card, words similar VALID FROM are printed or embossed to bring upwardly its appointment of issue.

As similar an expiration date, number appointment likewise uses an MM/YY appointment format.

Example: If 01/15 is at that spot on a credit card, in addition to thus its validity starts from the 1^st calendar month of twelvemonth 2015 i.e. its ‘valid from’ Jan 2015. In other words, nosotros tin say that the carte du jour became officially valid in addition to got ready to beingness used on 1^st Jan 2015.

9. Magnetic stripe

Magnetic stripe is likewise sometimes called equally ‘mag-stripe’ or ‘swipe card.’

Its features are equally follows:

1. Magnetic stripe is ofttimes on the dorsum side of a credit card.
2. It comes inward iii dissimilar colors viz., black, brown, in addition to silver.
3. It is a storage device.
4. It is divided farther into iii horizontal stripes known as:
   1. Track 1,
   2. Track 2, and
   3. Track 3.

ISO/IEC 7811 is an international criterion that specifies the traditional information recording techniques used on the magnetic stripe of identification cards similar credit cards.

According to this standard, the information recording density must live equally follows:

1. On Track 1: It must live 210 bpi (bits per inch) or 8.27 bpmm (bits per mm),
2. On the Track 2: It should live 75 bpi or 2.95 bpmm, and
3. On the Track No.3: It is over again supposed to live 210 bpi or 8.27 bpmm.

The information recorded on the Track 1 in addition to Track 2 of the magnetic stripe contains details of the cardholder's account, like:

1. A credit carte du jour number,
2. Name of the cardholder,
3. Expiry date, and
4. Issuer's province code.

Track 1 to a greater extent than ofttimes than non contains tape of an alphabetical value that is ever a credit cardholder's call in addition to his related information.

Track 2, of a magnetic stripe, cause got codes encoded inward it, like:

1. CVV1 code of VISA,
2. CVC1 code of MasterCard,
3. CAV1 code of Nippon Credit Bureau (JCB), and
4. CID or 4DBC code of American Express (AMEX).

Track 3 is either non-existent or empty or may consist of some supplementary information nearly the credit cardholder in addition to hardly used for some validation process.

Now amongst continuous improvement inward the technology, magnetic stripes are getting obsolete equally novel contactless credit in addition to debit cards are emerging inward the market.

10. Security code

Security Code is:

1. Card verification number or value,
2. Unique from whatever other number institute on a credit card,
3. Often a 3-digits number,
4. Sometimes may fifty-fifty live a 4-digits number.

The principal features of the carte du jour security code:

1. Security code gives an additional layer of security to the credit card.
2. It helps to cheque in addition to confirm the physical accessibility of the card.
3. It prevents an unauthorized carte du jour access in addition to minimizes online frauds.

The carte du jour security code is beingness named in addition to abbreviated differently past times diverse carte du jour payments processing companies. Visa, MasterCard, American Express in addition to JCB telephone phone it equally CVV2, CVC2, CID, in addition to CAV2, respectively.

1. CVV2 is an abbreviation of Card Verification Value Two.
2. CVC2 is a short-form of Card Validation Code Two.
3. CID stands for a Card Identification Number.
4. CAV2 tin expand equally Card Authentication Value Two.

In the representative of Visa, MasterCard, in addition to JCB, carte du jour security code is a 3-digits number in addition to is unremarkably printed on the nurture or dorsum side of a credit card.

However, inward representative of American Express, it is a 4-digits number printed on the aspect upwardly or front end side of a credit card.

11. Signature panel

Signature panel is a rectangular infinite located on the dorsum side of a credit card.

As its call says, it is a reserved house where a cardholder must lay or write his authorized signature. It in addition to thus must live signed past times a cardholder amongst a practiced permanent mark pen. For this purpose, a pen amongst dark-colored ink preferably blueish or dark must live used.

Features of having a signature panel:

1. Signature panel is an added characteristic for customization in addition to security of a credit card.
2. It allows the merchants in addition to traders to validate the authenticity of a somebody using a credit card. It helps them to cross cheque whether the physical signature inward the transaction invoice matches amongst the i on the dorsum of a card.

It is mandatory that this panel must live signed properly else the credit carte du jour is considered invalid. Often next alert contestation is printed on its top-right corner,

“NOT VALID UNLESS SIGNED.”

12. Additional information

Additional information is at that spot on the dorsum side of a credit card.

It mainly contains useful details about:

1. Service disclaimer,
2. Address of a carte du jour issuing entity, and
3. Toll-free telephone number for a client support.

Service disclaimer acts similar a legal acknowledgment (acceptance) for an understanding on the price in addition to weather betwixt a credit carte du jour issuing entity in addition to the cardholder.

Address of an issuing entity gives official mailing or contact information nearly the banking concern or NBFC that issued a carte du jour to its customer. If anyone is inward possession of a lost in addition to institute credit card, in addition to thus inward such a case, this address helps a owner to give upwardly the institute carte du jour to its issuer.

Customer service is made available via a toll-free telephone number. It supports or helps a cardholder to:

1. Resolve card-related queries,
2. Seek an immediate guidance regarding the usage of credit card,
3. Register a complaint or grievance,
4. Alert a fraud, if any, and
5. Contact the carte du jour issuer on diverse of import matters arising on a day-to-day basis.

Related articles on credit card:

1. Features of credit card.
2. What is debit card?
3. Advantages of debit card.