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Presentation on : Credit Cards
Presented to :Prof. MS Thuran
Presented by :Sahil 14104002Anuj 14104009Jyoti 14104014Sumit 14104024Preety 14104030
Credit Card
Also known as plastic money, it is a means of deferred payment.
A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder's promise to pay for them.
Brief History
Franz Nesbitum Mc Namara, as American businessman founded Diner’s Card in 1950. Barclays Bank in UK introduced in 1966. Central Bank of India introduced in 1980. Now many banks issued credit cards.
Working Mechanism
Three Parties :
1. Issuing organization or bank-agreements with merchant establishments, makes payments after deducing commission.
2. Card Holders: Buys goods/services from establishments without immediate cash payment.
3. Member Establishment: Sends bills to issuing organization/bank.
Eligibility: different card are issued depending on income of person.
• Standard Card is basic without any frills.• Gold card/executive card offers higher line of credit.• Platinum Card: higher credit limit and additional perks.• Titanium Card provides higher credit limit.
Credit Card Changes
Different banks charge differently, depending on type of card. Main charges are-
• Entry charge- ranging from Rs 100 to 400• Annual fee- generally from Rs 400 to 1500 and added in bill.• Supplementary/ add on fee for additional card from Rs 125 to Rs 1000.• Cash advance (from ATM) fee- 2.5% per transaction, with minimum Rs 50 to 100.• Late payment fee- generally interest.
Types of Cards
1) Debit Card2) Smart Card3) Charge Card4) Secured Credit5) Cash Card6) Travel Card7) Supplementary or Add-on Card8) International Credit Card9) Co-branded Card10) Affinity Cards
Offers of Credit Cards
Reward Points
Discount Coupons
Insurance Cover
Baggage Cover
Advantages of credit cards
For card holders :
Purchase without immediate payment Overdraft/ credit facility Security as less cash carried Freebies and discount facility Status symbol
For issuing bank :
Source of income
New customers attracted
Reduces number of cheque transactions
Relationship with member establishments
For member establishments :
Payments guaranteed, when charge slip sent to member establishment. Speedy settlement of bills by banks Burden of credit facility taken by bank. Increase in volume of business transactions.
Disadvantages of Credit Cards
Heavy Interest Payment
Purchase Beyond Capacity
Bogus Credit Cards
Heavy Commission
Legal Frameworks (Acts related to Credit Cards)
Consumer Protection Act 1986
Income Tax Act 1961
Indian Penal Code 1860
Negotiable Instrument Act, 1861
Foreign Exchange Management Act