Credit Cards: Swipe it right to get the best out of them

madathil mhanian By madathil mhanian, 29th Sep 2014 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Money>Credit Cards

Credit cards are very useful when you are in a situation to purchase something online and pay later. The also alleviates the necessity to carry cash with you on your travels.

Credit Cards: Swipe it right to get the best out of them

There is a very interesting story behind the idea of Credit card, which helps the customers to use them to make purchases and pay later. A gentleman named McNamara found himself out of cash to pay at a restaurant, which gave him an idea to charge for the food bill and gave the payment later. Thus the system of ‘credit’ card started by McNamara, Ralph Schneider and Matty Simmons in 1950 has come a long way. If you have not guessed by this time what was the first brand or Credit card, let me tell you that it is DINERS CLUB cards. Today Credit card has a major role to play as a convenient and safer method to pay for purchases made online with the help of internet.
All major banks today have their own credit card which offers their customers interest free period for their purchases and a billing cycle of one month and a twenty days (maximum) to make that payment from the date of the billing. When a credit card is used to pay either at a member establishment that accept the type of card you use, the card will be swiped in a card reader, and the details embedded in the card is transferred to the card servicing company. Depending upon the status of the card the charge (payment) is either approved or declined by the company. Once approved, the amount for the purchase is credited to the bank of the member establishment immediately.
Latest card uses the chip technology, where in the card is inserted to the card reader, the chip in the card will contain all the relevant information about the card and there is no need to swipe the card. The approval for the purchase is through the same process mentioned earlier.
To get a credit card, one can apply to the one of the bank issuing the card through a prescribed application along with the necessary documents such as id proof and address proof and your source of income. The bank after a careful analysis of your credit rating and your ability to pay back will either issue or reject your application. Once you receive your card you can use it as a convenient way to pay for your purchases either online or at shops that have a tie up with the card issuer. The two tier security introduced recently makes it a convenient and safe way to pay for your purchases online without making the physical presence to those establishments.
You can use your credit card right from getting a ticket for air, rail or bus travel and to purchase a ticket for the latest movie released for the weekend. But before you think that you no longer require the paper money and flash your card for this and that you should be aware of some do’s and don’t about your credit card
Do’s; always keep your card safe and keep it within your vicinity even when you handover the card to those merchant establishments when you pay for a purchase. With the rise of credit card fraud, one cannot take the safety for granted. The PIN number by which you authorize your purchases should be memorized and never be kept along with the card. Always pay your credit card bills on time (ideally one day before the due date) so that you will not be getting into the trap of revolving credit where they charge hefty interest rates for the unpaid amount. Always cross check with the tabs you keep with you, when the credit card bill is presented to you. In case there is a discrepancy you should inform them within a month because that is the stipulated timeframe as per the terms and conditions.
Don’ts: Do not divulge your pin number and other card details when somebody call you over phone and claim that they are from the bank. Another case is that somebody “on behalf of the bank” calls you and asks for the details. They are nothing but a franchise who works for the bank on contract basis. You are not obliged to give any details to them on both cases. Always look for the SSL (secure socket layer) sign of the website, shown as a small picture of a lock in the tab, before you do the transaction on that website. If it is not there, please do not transact any business through that website, because chances of your card details reaching the wrong hands are a possibility. Do not entrust the transaction to a third person, even if they are your relative or a close friend.
Credit cards have made giant strides from the days of McNamara in the 1950’s. When used in the right way, they saves you lot of time, give you the convenience of not carrying the cash. More over, you can purchase now and pay for the same conveniently when the bill arrives later. But at the same time, you should be aware of what you are purchasing and able to ‘foot the bill’ when you need to pay for it.


Bill, Billing Cycle, Charge, Credit Card, Internet, Online, Payment, Revolving Credit, Swipe

Meet the author

author avatar madathil mhanian
from Coimbatore, worked as a Zonal Sales Manager for a Pharma company. At present earns as a Freelance Trainer for Pharma companies.

Share this page

moderator Mark Gordon Brown moderated this page.
If you have any complaints about this content, please let us know


Add a comment
Can't login?