Basic knowledge of credit cards
1.
Credit card design
2.
Basics of credit cards Functions
3.
Categories of credit cards
4.
Advantages and disadvantages of credit cards
1. Credit cards Card design
If credit cards are discussed on the red machine, they can be divided into two different design types: main card and special-shaped card. The two credit cards differ greatly in the size of the card.
Main card: A credit card is generally a special carrier plastic card with consumer credit that is 1 mm long, 1 mm wide, and 1 mm thick. It is issued by the bank to individuals and organizations, and can be used to shop, consume, and deposit and withdraw cash from the bank. It is in the form of a card with the name of the issuing bank, validity period, number, cardholder name, etc. printed on the front and a magnetic card on the back. strip, signature strip.
Special-shaped cards: Due to individual needs, printing is not limited by size, resulting in many "weird" cards appearing in various countries around the world. We call these cards special-shaped cards. Among them, cards with geometric shapes such as rectangles, squares, triangles, ovals, circles, etc. are called "non-standard cards"; some special-shaped cards with animal shapes and doll shapes are called "quasi-abnormal cards". Relatively speaking, the production process of "quasi-shaped cards" is more difficult than that of geometric objects.
2. Basic functions of credit cards
Credit cards are issued to cardholders by banks or credit card companies based on the user’s creditworthiness and financial resources. Cardholders do not need to pay cash when using credit cards to make purchases. Repayment will be made on the billing date (English: BillingDate).
The various uses and functions of credit cards are endowed by the credit card issuing banks based on social needs and internal operating capabilities. Although the functions of credit cards issued by various banks are not exactly the same, all bank credit cards have Basic functions such as shopping and consumption, transfer settlement, savings, micro-credit, exchange settlement, and installment payment.
Shopping consumption function
When the cardholder pays for goods and services that exceeds the balance of his credit card account, the card-issuing bank allows the cardholder to Make a short-term overdraft within the limit. Essentially, this is consumer credit extended to customers by the bank that issued the credit card. Therefore, we say that credit cards have consumer credit functions. Credit card holders are different from customers who use other settlement methods. When applying for a credit card, customers must go through the bank's credit investigation and have a certain ability to repay debts. Since the amount of credit card overdrafts accounts for a small proportion of credit card transaction amounts, and at the same time, banks have a set of measures to prevent and recover overdraft risk losses, therefore, although credit card overdrafts can expand social consumption levels with the function of consumer credit to a certain extent, they It does not necessarily lead to the expansion of social consumer credit. The interest charged by the banks that issue credit cards on credit card overdrafts is higher than the expected annualized interest rates on bank loans during the same period. This shows that although the card-issuing banks provide overdraft facilities to credit card holders, they also use expected annualized interest rate leverage to restrict them.
Transfer settlement function
After shopping in designated shopping malls and restaurants, credit card holders do not need to pay in cash, but only need to use credit cards for transfer settlement. Transfer settlement is the most important function of a credit card. The transfer and settlement function of credit cards can provide the society with the widest range of settlement services, facilitate the purchase and sale activities of credit card holders and service industries such as shopping malls and restaurants, reduce the use of funds and currencies in the society, and save social labor. Therefore, it has gained popularity in our country. great importance.
Saving function
Credit card holders can handle deposit procedures within a wide range of savings outlets (or business halls, offices) designated by the bank that issued the credit card. It is more convenient to use a credit card to handle deposits and withdrawals than using a savings passbook. It is not restricted by the deposit location and deposit savings bank. It can be deposited and withdrawn at all branches of the card-issuing bank and affiliated institutions, which greatly facilitates credit card holders. Savings activities have increased residents’ enthusiasm for saving.
At the same time, when withdrawing cash with a credit card, the bank must examine the cardholder's ID card and verify the cardholder's signature, which will help the bank that issued the credit card maintain the security of the cardholder's funds.
Microcredit functions
Microcredit, first of all, is a credit loan, which does not require collateral. It mainly solves the financial service problems of low-end customers that traditional banks cannot serve. Its service targets are low-end customers (including productive poor people and micro-enterprises); because of the special nature of the service targets, it requires credit loans without collateral; because it is a credit loan, the amount must be small enough to control risks The extent of microfinance; internationally, the amount of microfinance is generally measured by multiples of local per capita GDP. According to the microfinance experience managed by the exchange center, it is generally no more than 5,000 yuan in rural areas and no more than 20,000 yuan in cities; Because it is a small-amount credit loan, it requires a loan management model that is different from that of ordinary banking institutions; at the same time, because the operating costs and risks of small-amount credit loans are high, it is necessary to charge higher loan interest that can make up for the costs and risks; finally , due to its particularity, also requires relatively flexible policies and practices in financial supervision.
Bank loans are still the main channel for financing for small and medium-sized enterprises. However, for these small and medium-sized enterprises with high operating risks, unclear development prospects, and difficulty in obtaining loan mortgage guarantees, it is difficult to obtain bank loans. Even if you can get this loan, you may have missed the business opportunity.
Credit Card Cash Withdrawal Function
With the gradual popularity of credit cards in recent years, various banks have launched "Credit Card Cash Withdrawal" services, but this service is by no means intended to allow consumers to withdraw money. Come to buy a house, but for emergency needs. Many citizens have the experience of borrowing money from others, and the fee is usually not very large, maybe one or two thousand, or up to tens of thousands. But the feeling of borrowing money is not pleasant, and it is not worth seeking a bank loan for this small amount of money. Therefore, from the perspective of providing customers with humanized services, various banks have launched the "Cash Withdrawal by Credit Card" function. As long as it is not a large amount of money, you can withdraw it directly at the counter or an ATM, which is very convenient.
Exchange settlement function
When a credit card holder travels or goes on a business trip and needs to collect money abroad, he can use the card to go through the deposit procedures at a non-local joint bank network institution, and the bank will The funds are remitted back to the local cardholder's account, and the card can be used to withdraw funds at member banks in various locations. You can also transfer the money to another place with the card, then pay with the card and handle the transfer settlement.
Instalment payment function
Credit card installment payment means that when the cardholder uses a credit card to make large purchases, the card-issuing bank pays the merchant a one-time payment for the goods (or services) purchased by the cardholder. ) consumption funds, and according to the cardholder's application, the consumption funds will be deducted from the cardholder's credit card account in installments, and the cardholder will repay according to the monthly account amount.
Most domestic banks have credit card installment services. Installments are generally divided into shopping mall (POS) installments, "mail order installments" and "bill installments" conducted through the Internet, mail, etc. depending on the occasion. ".
3. Categories of credit cards
Credit cards are divided into credit cards and quasi-credit cards. Credit cards refer to cards issued by banks and grant cardholders a certain credit limit and holder. A credit card in which the cardholder can consume within the credit limit and then repay later; a quasi-credit card refers to a credit card issued by a bank, and the cardholder deposits a certain amount of reserve fund as required. A quasi-credit card with an overdraft within the credit limit. The so-called credit card generally refers to a credit card only. In addition, credit cards are also classified as follows:
(1) According to different card issuers, they can be divided into bank cards and non-bank cards
(1) Bank cards. This is a credit card issued by a bank. Cardholders can shop at the card-issuing bank's special merchants, and can also withdraw cash at any time at any branch of the card-issuing bank or at places with ATMs.
(2) Non-bank card. Such cards can be specifically divided into retail credit cards and travel and entertainment cards. Retail credit cards are credit cards issued by commercial institutions, such as department stores, petroleum companies, etc., which are specially used for shopping in designated stores or refueling at gasoline stations, etc., and are settled regularly.
Travel and entertainment cards are credit cards issued by the service industry, such as airlines, travel companies, etc., and are used for purchasing tickets, meals, accommodation, entertainment, etc.
(2) According to the different objects of card issuance, it can be divided into corporate cards and personal cards
(1) Corporate cards. Company cards are issued to various industrial and commercial enterprises, scientific research and education institutions, national party and government agencies, military units, groups and other legal organizations.
(2) Personal card. Personal cards are issued to urban and rural residents, including workers, cadres, teachers, scientific and technological workers, self-employed households and other adult urban and rural residents with stable sources of income. A personal card is applied for in the name of an individual and he/she bears all responsibilities for using the card.
(3) According to the credit status, status and other credit conditions of the cardholder, it can be divided into ordinary cards and gold cards.
(1) Ordinary cards. Ordinary cards are issued to cardholders with average financial strength, credibility and status, and their various requirements are not high.
(2)Gold card. A gold card is a high-end credit card that pays high membership fees and enjoys special benefits. Cards are issued to those with higher credit standing, stronger repayment ability and credit, or those with a certain social status. The authorization limit of the gold card starts from a higher level, and the additional service items and scope are much wider, so the requirements for relevant service fees and security deposits are also relatively high.
(4) According to different repayment methods, credit cards can be divided into credit cards and debit cards
(1) Credit cards. When the card-issuing bank provides bank credit, it is first used as an overdraft, and then repaid or paid in installments. Most of these cards are used internationally. That is to say, the way that cardholders are allowed to pay off their credit card accounts without deposits is "spend first, deposit later". Most of these cards are used internationally.
(2) Debit card. It is a credit card issued by a bank that allows you to deposit money first and spend later. When applying for a credit card, cardholders need to deposit a certain amount of money in the card-issuing bank for backup. Cardholders need to use the deposit balance as a basis when using the card. Overdrafts are generally not allowed. Credit cards issued by banks in our country are basically debit cards, but they allow cardholders to make good-faith, short-term, and small overdrafts for consumption purposes. Different limits are stipulated according to different card types, and repayments must be made within the specified period. , while paying interest. So, essentially a debit card with some overdraft functionality.
(5) According to the different circulation scope of credit cards, they can be divided into international cards and regional cards
(1) International cards. An international card is a credit card that can be used outside the country of issue and is accepted worldwide. The five major overseas groups (MasterCard, Visa International, American Express, JCB and Diners Club) issued MasterCard, VISACard, American ExpressCard and JCB respectively. (JCBCard) and DinersClubCard are mostly international cards.
(2)Regional card. A regional card is a credit card that can only be used within the issuing country or within a certain region. Most of the various credit cards issued by commercial banks in my country are regional cards.
4. Advantages and Disadvantages of Credit Cards
Advantages
Compared with ordinary bank savings cards, the most convenient way to use credit cards is that they can be used without cash in the card. For ordinary consumption, in many cases it is enough to repay the consumption amount on schedule.
1. You can use overdrafts without deposits, and you can enjoy an interest-free period of 20-56 days for on-time repayment without any interest charges (most banks will charge an interest of 50,000 cents on the day of cash withdrawal. There is also a handling fee of 2. ICBC cash withdrawals are free of handling fees and only charge interest);
2. Swiping the card when shopping is not only safe and convenient, but also provides gift points;
3. You can enjoy discounts when you use the card at the bank's special merchants;
4. Accumulate personal credit and add integrity records to your credit file, which will benefit you throughout your life;
5. Accessible across the country, you can withdraw money or make purchases by credit card at ATMs and POS machines with the UnionPay logo; (Note: Credit cards are only suitable for consumption, it is best not to withdraw cash, the cash withdrawal fee is very high, which is not cost-effective)
6. Spend by swiping your card, collect existing points with some credit cards, and enjoy various discounts and lucky draws throughout the year, so you can always be surprised just by using your card. (Most credit card online payments do not have points, but online shopping payments are very convenient and fast);
7. Free monthly mailing of statements, allowing you to transparently control every consumption expenditure; (now promoting green environmental protection, you can Cancel paper statements and change to electronic statements)
8. The unique supplementary card function is suitable for couples to manage finances together or control their children’s financial expenditures;
9. The free choice of one card and dual currencies is available all over the world. Overseas consumption can be repaid in domestic RMB;
Telephone or 5-digit short number starting with 9 is available 24 hours a day. Loss reports are effective immediately, and there is no risk of losing the card. ;
11. Have validity period: It is known that domestic credit cards are generally valid for three or five years.
12. Use third-party platforms (the domestic platform that supports credit card bill management is mainly Jujindou) to conduct business cooperation and provide preferential services to cardholders.
Disadvantages
The invention of credit cards is like a double-edged sword, which can solve the temporary economic crisis, but the purpose of banks issuing credit cards is to make money. Once the interest-free repayment time is exceeded, , a high amount of interest will be charged, usually 50,000 per day.
1. Blind consumption
Swiping a card is not like spending money one by one like paying with cash. Once you swipe it, you will feel nothing, just a few numbers, which leads to blind consumption and spending money like this. Running water.
2. Excessive consumption
Installation for laptops, digital cameras, and smartphones. While enjoying your favorite items in advance, you must also consider whether you are able to repay them.
3. High interest rates
If you do not know how to take care of your credit card and cannot repay the loan as scheduled when the final payment date arrives, the bank will charge you high interest rates. (The minimum repayment for the first month of a credit card shall not be less than 10% of the overdraft amount of the month)[5]
4. Annual fees are required
Credit cards basically have annual fees , but basically there is a policy of waiving annual fees. For example, China Construction Bank only needs to swipe the card three times a year to waive it; but if you do not swipe the card the number of times specified by the bank in a year, an annual fee will be charged.
5. Credit card fraud
Credit cards are basically used for payment without password by default. This makes it easy for someone else to steal your credit card when it is lost or stolen, causing unnecessary trouble or loss; but in fact, credit cards can also be used to apply for swiping purchases with passwords - it depends on how you manage your credit cards. Of course, many people do not cancel their accounts after canceling their credit cards due to lack of experience in this area, and are criticized by some Criminals reapply for credit card overdrafts and lose money in vain, which is not worth it.
6. Impact on personal credit record
Long-term malicious debt will naturally affect personal credit record and even be blacklisted by the bank. If you want to borrow money from the bank to buy a house or a car in the future, you will have to There is a possibility of being rejected by the bank.
7. Repayment troubles
You have to go to the bank every month, which is often overcrowded. Not everyone can repay online.
8. Cancellation troubles
Compared with applying for a credit card, users have fewer channels to cancel their credit cards. Logging out is more troublesome.
What do you know about credit cards?
1. There are two main requirements for applying for a credit card: Age requirement: 18-60 years old; Having a stable job and source of income. \2. Materials and documents required for application: Domestic residents only need to provide: completed and signed application form, identity document, residence certificate, income certificate document; foreigners and people from Hong Kong, Macao and Taiwan also need to provide In addition, provide: Foreigner's residence permit (the reason for residence must be employment) or employment certificate for foreigners/Hong Kong, Macao and Taiwan residents; if you are a private owner, in addition to the above information, you also need to provide: showing the applicant's name, company name and start of operation A copy of the dated industrial and commercial business license. \3. If you want to apply for a credit card with a relatively large limit, you need to provide proof of good financial strength, such as: a copy of the real estate certificate, a copy of the car driving license; a copy of the bank loan account (good credit, overdue no more than 60 days) or deposit certificate pieces etc. \IV. Credit card cash withdrawal:. Credit card overdraft cash withdrawal: \A Handling fee: It depends on the regulations of each bank. For example, China Construction Bank credit card is charged at 0.5 of the cash withdrawal amount in China, with a minimum of RMB 2 yuan/transaction and a maximum of 100 yuan/transaction; China Merchants Bank credit card in China is charged The amount of cash withdrawal is 1, with a minimum of RMB 10 per transaction; \BInterest: Calculated based on daily interest rate of 5/10,000. .Cash withdrawal of credit card overpayment: Some banks need to charge a handling fee, and some do not. For example, the handling fee of China Merchants Bank is 0.5 of the amount withdrawn, and the minimum charge is ￥5 yuan or $1 USD. \5. Credit card purchases at POS machines: repay in full on time, interest-free; repay the minimum repayment on time, with a daily interest rate of 0.05%; overdue repayment, in addition to the above interest, there will also be late fees.
Credit Card Guide: Tips on Use
Credit Card Application, Limit, Points, Handling Fees, Annual Fees, Cancellation, Installment, Cash Withdrawal, and Cash-out Guides are released, and there are many worth collecting. A little knowledge, it is recommended that users who apply for a card for the first time read it carefully to have an overall understanding of credit cards to avoid unnecessary fees and bad credit records.
Overpayment will be charged when depositing money with a credit card
The bank will definitely be happy if you deposit money in a credit card, but the loss will be on the cardholder. First of all, the bank will not pay interest, which is equivalent to giving the bank an interest-free loan; secondly, if the cardholder withdraws the money again, he will have to pay a certain handling fee, which can range from a few yuan to tens or hundreds. Yuan does not vary.
Even if the card is cancelled, you may still be in arrears
The annual fee system of the credit card may cause the canceled credit card to still incur annual fees. Once the card is in arrears, it will affect your personal credit. Record. After cancellation, it is best to destroy the card, because it can still be used in some consumption places that only need to extract information without verifying it, and it may be stolen.
Even if there is a penny difference, the interest will be calculated on the full amount
Currently, except for a few banks, most banks still adopt the full interest calculation system. If the overdraft is 10,000 yuan, even if it is 1 If the penny is not repaid, interest will still be calculated on the basis of 10,000 yuan, and the interest will still be "compounding interest". Late payment fees will also be calculated on the arrears. If only 1 penny is not repaid, the fees incurred may be quite large. .
The installment fee is higher than it appears
Although credit card installment payment can solve the urgent need, in fact it is a loan in disguise, and the fee is even higher than the interest on the loan. , if the repayment is not made on time and in amount, other fees will be incurred. For those products that are promoted as interest-free promotions, it may be better to go to the mall to buy them directly if you pay in installments.
You can easily shop online without opening online banking
Before shopping online, go to the bank counter and queue up to apply for online banking. When shopping, you also need various digital certificates, U-shields, and dynamic Passwords, etc., this general online shopping method can no longer keep up with the trend of the times. In fact, there is no need to specifically activate online banking when using credit cards online.
Hidden currency conversion fees for overseas card payments
Foreign exchange fees, to be precise, should be "international settlement fees", which refers to when the actual consumption currency is different from the credit card settlement currency. , a currency intermediate conversion fee charged by the international card organization to the card-issuing bank.
For example, if you travel to Europe and bring a Visa RMB one-dollar dual-currency card, the euros you consume need to be converted into U.S. dollars when you deposit them into your account. In this process, foreign exchange procedures are generated. fee. Usually, the card-issuing bank will charge this fee to the cardholder, and since this exchange fee is not listed separately in the bill, many cardholders do not care. But if you calculate it based on the exchange rate of the day, you will find that the cost of this part is actually not much.
Little popular knowledge about credit cards that 99% of people don’t know
Today’s literacy chapter mainly introduces two concepts, one is credit cards and the other is traditional consumer loans. Although both are a type of consumer borrowing, they are essentially different.
Next, let’s introduce it in detail from several angles.
First of all, let’s take a look at the scope of use
1. Credit card: Credit card does not have a special scope of use. You can swipe the card at any place where the card can be swiped, and you can also conduct online transactions. , you can even use it to withdraw cash or something. Anyway, as long as you pay it back on time after swiping it.
2. Consumer loans: When applicants apply for consumer loans from banks, they usually choose the purpose of the loan. That is to say, this type of loan can only be used for special purposes. The scope of use you choose is to buy If you choose a car, you can only buy it for car use. If you choose decoration, you can only use it for decoration. You cannot use it for other purposes.
Next, let’s take a look at the costs of the two.
1. Credit card: This so-called cost actually refers to the interest-free period of the credit card. Many card friends know that the interest-free period of the credit card The period ranges from 18 to 56 days. If you use it well, your overdraft consumption within 56 days will be free. As long as you repay in full on the final payment date, you will not need to pay other fees.
2. Consumer loans: As a loan product, banks charge interest for lending, so there is no interest-free period for consumer loans. As long as you successfully apply for the loan, you will be eligible for the loan from the day of borrowing. , the interest must be calculated as agreed, and the repayment must be made on time each period. Borrowing costs cannot be avoided.
Then, look at the convenience of application
1. Credit card: It is very convenient to apply, and there are many application channels. Customers can apply through the bank’s offline branches, the bank’s official website and WeChat , mobile app and other channels to apply. During the application process, you only need to provide proof of employment, income proof and other application materials. The approval time is relatively short, and the results can be available in up to two weeks.
2. Consumer loans: It is troublesome to apply, the process is cumbersome, the approval is strict and the approval time is usually long. Many times, applying for consumer loans requires applicants to provide a lot of supporting documents, and even provide mortgages, guarantees, etc.
Finally, let’s introduce the repayment methods
1. Credit card: There are various repayment methods. If you have more money, you can repay in full. If you feel pressured to repay, you can choose to repay in installments. Or repay according to the minimum amount, which makes repayment more convenient for cardholders.
2. Consumer loans: There is only one repayment method, that is, you must repay on time. If you underpay or fail to repay, you will be blacklisted by the People's Bank of China.
China Merchants Young Card
(No handling fee for the first cash withdrawal every month; Cash withdrawal limit is 100; Double points in birthday month; Only customers under 30 years old can apply)
How many do you know about these little knowledge about credit cards (debit cards)?
After using credit cards (debit cards) for so many years, do you know all the ins and outs of credit cards (debit cards)? In fact, there are a lot of unknown facts about credit cards (debit cards). Here are a few points, I hope you can use the cards better.
Why the bulge?
The bumps on credit cards (credit cards) were originally used for rubbings. This type of information is called Emboserdata (embossed data), because early POS machines could only confirm transactions by using the card's embossed information on carbon paper such as blue printing paper as your credit card (credit card) voucher. Therefore, with the help of these protruding information, the user's identity can be confirmed → the transaction can be completed → the document can be formed.
What exactly is the “dashed line” around the UnionPay logo on a credit card (debit card)?
In fact, it is not a dotted line, but a message composed of microtext. The microtext includes: the Chinese pinyin abbreviation of "UnionPay", the code of the issuing bank (including the Postal Savings and Remittance Bureau), the card type code, and the manufacturer code. It is said that these words require a magnifying glass to be seen clearly, and it is difficult for ordinary users to see clearly with the naked eye.
Do I need to sign the signature on the back of a credit card?
When swiping a credit card (debit card) for consumption, if the cashier finds that the signature does not match the signature on the credit card (debit card) during the signature verification process, the cashier has the right to cancel the purchase and reject it. Goods for sale. The merchant will be responsible for the losses caused by running settlement without verifying the signature, but if a credit card (debit card) is stolen without a signature, the responsibility lies with the cardholder. When swiping a credit card (debit card) abroad, you do not need to verify the password. If you swipe a credit card (debit card) abroad without the cardholder's signature, consumption will be affected.
What is the role of the 3-digit card verification code behind a credit card (debit card)?
The so-called card verification code is the last three digits on the signature line on the back of a credit card (debit card), but it has many "fancy names" - UnionPay calls it CVN2, Master calls it CVC2. VISA calls it CVV2, and American Express calls it CSC2. These three-digit security codes are equivalent to the ID cards of credit cards. All types of mobile Pay card binding and online cardless purchases usually require this code for cardholder identity verification, so be sure to keep it safe.
What is the minimum repayment amount and installment payment?
The minimum repayment amount refers to the minimum amount you need to repay in each period. No special application is required. It can be viewed on the monthly bill. If you are unable to repay the loan in full on time, you can repay the minimum payment amount on time. This will not affect your personal credit, but it will also result in you not being able to enjoy the interest-free period, and the bank will charge additional interest on the outstanding balance until it is paid off.
Instalment repayment requires independent application. It refers to dividing the single repayment amount into multiple installments. At the same time, a certain handling fee will be charged based on the installment amount and number of installments. As long as each installment is repaid on time, you will still be eligible. You can enjoy the interest-free period and it will not affect your personal credit.
Generally speaking, installment repayment is suitable for bills with large amounts that cannot be paid off within a short period of time, while the minimum repayment amount is suitable for bills that do not have enough funds to repay at the time, but can be repaid in a short time. Arrears.
What is a cash advance?
Similar to cash withdrawal, funds are transferred to a debit card in one's name within the limit of a credit card (credit card). Major banks have slightly different regulations on the proportion of the amount of cash that can be withdrawn and cash advanced to the credit limit. different.
Don’t underestimate these trivial knowledge, it can help us better use credit cards (credit cards) and understand credit cards (credit cards).
This is the end of the introduction about credit card knowledge and popularization of credit card knowledge. I wonder if you found the information you need?