A credit card is a payment system which allows you to buy goods on credit. Simply put it allows pay for things you buy without physically transferring cash. Each credit card has a card number found on the front of the card. Credit card numbers are a set of numbers which are found on your debit cards.
Banks, card issuers, open up a line of credit for customers. A lot of people also refer to a line of credit as LOC. LOC means the highest amount of credit which your bank or card issuer allows you to have. Once you have reached the limit you will need to pay back the credit to continue using the card. From this line of credit, you can buy goods or ask for cash in advance.
You can always pay for products on credit using your card. So long as you do not exceed the limit of your credit card. The card issuer charges interest on this line of credit.The interest charge does not start until you have made payment using your credit card. The popular card issuers are Visa and Mastercard.
Benefits of Having a Credit Card
Having your personal credit card offers you so many benefits. One reason why a lot of people have them is that they provide solutions to problems. Amongst the benefit are;
- Most credit cards have an interest free/grace period. This can last up to 56 days without charging interest.
- They can also be used to build up your credit score. A credit score helps apply for loans and other credit with ease.
- They are safe to a certain extent as they use a signature strip. This allows you to use a PIN or Personal Identification Number to verify transactions.
When you shop, you can find cards which offer an interest charge of 0% on products you buy. These cards are normally referred to as interest-free cards. Each card has its unique feature which allows you to get the best out of them.
How Do Credit Cards Work?
Your credit card allows you to pay for products and services at any time. This is if you do not max out your card. Having a maxed-out credit card means that you have exceeded your credit limit on your card.
Your credit limit depends on factors which are within your control. These factors are; your ability to pay back the interest charged and your ability to repay the debt of the credit card. If your max out your card, you will be unable to use your card anymore. This can be fixed in 3 instances;
- If you try to settle part of the card debt. This allows your debt to go below the set credit limit on your card.
- Your card issuer can agree to increase the limit of your credit. This will only happen if you apply for it.
- If the card issuer allows you to make just one or more purchase even if you have not made part payment of your debt. Here the card issuer will charge you an over-the-limit fee.
The total amount of debt you owe is shown on the statement and is called a balance. The cost of each product you pay for will be added to the balance.
Understanding a Credit Card Statement
Your credit card statement is roughly a summary of payment which you used your card to make. You should know that the card issuer is meant to send to you a monthly card statement. The card statement is issued 21 days before your first payment due. Your card statement contains the following information:
- The payments which you have used your card to make since the last time your card statement was made.
- Interest fees charged to your account.
- The amount owed. This is the balance on your statement.
- The time and date your payment should be made.
- The minimum amount you can pay for.
- Method of and where you can make payment.
- Your credit issue contact information.
There are times where your credit card issuer will make mistakes on your statement. That is why it is vital you go through your card statement with care to spot mistakes. This will ensure that you are not overcharged or undercharged.
How to Avoid Credit Card Fees
Interest on Purchases
Should you pay the full amount shown as balance in your card statement you will not be charged any kind of interest. If for any reason what so ever your card issuer increases the interest on your card, you can reject it. You have a maximum of 60 days to reject this and then pay the full debt owed. If you are unable to make payment for the debt owed in full you will be charged interest on the remaining balance.
However, this will not apply to you if you have a deal in place whereby the interest is free. Where you can’t pay the full debt owed your credit issuer, you are advised to pay for the most expensive item first. If you can’t pay that also then you should look at paying the minimum payment allowed.
You should note there is a risk that if you are always paying the minimum balance allowed you might never pay off the debt.
Cash Advance Fee
This is a service that card issuers provide for its customers where you can withdraw the line of credit granted to you. This can be withdrawn at ATMs, bank, and some financial agencies. You should know that the interest charged on cash advance by the card issuer is unusually high. The interest charged is added instantly to your balance once you have withdrawn cash from your card.
Commission for Making Payments Abroad
It is a well-known fact that most card issuers charge clients a commission. This when you use their cards to pay for products abroad. These charges make using credit cards expensive. To avoid this, you should do well to credit cards which are travel-friendly as the commission they charge will be cheaper.
Here are some tips to avoid extra charges when abroad. Firstly, ensure you withdraw a lot of cash at once to avoid using the ATM multiple times.Use credit cards whose international usage fees are low. Lastly, if you have the chance, pay using the local currency of where you find yourself.
This is where credit card holders pay off the balance owed on one card by switching to a new credit card. Here you might enjoy the reward of interest rates lower than your previous card. And also you get better terms of service.
A lot of card issuers offer a good deal where interest charged on balance transfer is 0%. However, be sure to check that there are no hidden deals anywhere. These might make interest charge on products you buy later using that card higher.
Default on Payment Charges
Default on payment charges occurs when you have not paid your balance by the time it is due. To know when your debt is due, you can check it on your credit statement. You will also incur charges if you make less than the minimum payment allowed.
So, it is vital that no matter what you do always pay your credit debt before your due date. You should be aware that interest will be included in the default charges already incurred. Therefore, your debt keeps rising and people find it difficult to come out of their credit card debt.
Getting your Credit Card Insured
Should you be unable to earn income and are unable to pay your credit card bills you can be protected. For situations like this is where credit card insurance is needed. This allows payment of your credit card debt and interest will be stopped for a period. This helps to sustain a good credit rating as your debt and interest payment can be paused for up to 2 years.
Credit card insurance can take two forms;
- Payment Protection Insurance – this kind of insurance covers your card should you lose your job or are unable to make regular card payments. Before signing this insurance policy, ensure that the policy is tailored to your needs.
- Card Protection Insurance – this kind of card insurance covers your cards in case they are stolen or you lose them. Should you lose your card, ensure you call your card issuer n time.
Most times you do not need a card insurance, sometimes they are worth it. Beware of people calling pretending to offer credit card insurance. They are mostly scammers who try to get your card number and its expiration date.
Credit Card Numbers
This question, as well as how, are credit card numbers verified seem to be on the mind of a lot people. In as part of today’s article, we will be looking to answer this question including other questions you might have.
What Are Credit Card Numbers?
Credit card numbers are a set of numbers which are found on your debit cards or credit cards used to identify the cards. It identifies the card issuer but not the bank account to which it is linked to. You can find your credit card number on the front of your credit card.
Your credit card number should not be given out to any website or individual. This is because your card number can be used to carry out fraudulent activities. That is why you need credit card number generators. Credit card number generator produces fake card numbers which do not work. These fake card numbers do not have money on them.
With that said, you can use them to check out products which you have no intention of buying. This process keeps your money and account information safe.
What Is Credit Card Number Format?
The format of your credit card basically has to do with the structure of the numbers. This includes the credit card length, the Major Industry Identifier (MII), Issuer Identification Number, a single check digit.
People keep asking me, “are credit card numbers the same as account numbers?”. And each time I find myself having to explain the structure of credit card numbers and how to validate credit card numbers. Now, the standard credit card number length lies at 16 digits. However, it is not uncommon to see credit cards which have up to 19 digits. The length of a credit card varies with card issuers. For instance, American Express cards are said to have 15 digits. While Discover credit card length ranges from 15-19.
The Major Industry Identifier of your card is the first digit of the Issuer Identification Number (IIN). Every credit card has an IIN which is the first 6 digits of the credit card number. The rest of the digits of the card, removing the last digit, is the individual account identification number. This is not usually known but the last digit on your card number is used with Luhn’s formula to validate your card numbers.
How Are Credit Card Numbers Verified?
To verify your card number is quite easy. All you need to do is follow the steps once you know them. You don’t even have to be technically inclined to be able to do so.
In order to validate your card number, you will your credit card beside you. On all credit cards, there a set of digits which contains the single validator digit. The validator digit is the last single digit of your credit card number. Using Luhn’s formula you are able to verify your credit card number with ease.
How to Validate Your Credit Card Number?
Here is a step by step break down of how validate your credit card number using Luhn’s formula.
Remove the last digit of your credit card number. This single digit checker which helps to verify your card number.
Flip the credit card numbers left.
Multiply by 2 the numbers which occupy odd positions such as 1st, 3rd, 5th, 7th and so on.
Minus 9 from the results of the numbers which are greater than 9.
Sum up all numbers.
The single digit validator is the number you add to the sum total to get a module of 10.
Example of Luhn’s formula
Your original credit card number: 4 0 2 4 0 0 7 1 0 9 5 8 8 8 4 7
Remove the last digit of your credit card number: 4, 0, 2, 4, 0, 0, 7, 1, 0, 9, 5, 8, 8, 8, 4
Flip the credit card number: 4, 8, 8, 8, 5, 9, 0, 1, 7, 0, 0,4, 2, 0, 4
Multiply by 2 the numbers in odd positions: 8, 8, 16, 8, 10, 9, 0, 1, 14, 0, 0, 4, 4, 0, 8
Minus 9 from numbers greater than 9: 8, 8, 7, 8, 1, 9, 0, 1, 5, 0, 0, 4, 4, 0, 8
Sum up all the numbers: 63
63 to get a module of 10 add 7 = 70
Using this formula, you are able to find any single digit errors and validate a set of identification numbers.
How to Find CVV Code Without Card
The only way to get the Card Verification Value without having a credit card is if you are the processor of the card. Without being the card processor or having the card physically present, there is no way for you to get the CVV.
Now, the CVV is a 3-digit number which serves as security to prevent credit card fraud. And you can see the CVV number on the back of your card.
A credit card is a payment system which allows you to buy goods on credit. Simply put it allows pay for things you buy without physically transferring cash. Each credit card has a card number found on the front of the card. Credit card numbers are a set of numbers which are found on your debit cards