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

1. Meaning of Credit Card

The glossary of credit carte du jour is every bit follows:

Card is a pocket-size apartment object made of a laminated plastic sheet too other materials.

Cardholder is someone to whom a carte du jour gets issued too who has an obligation to remit all necessary financial borrowings made on his card. The cardholder may live an private or organization. Here,

Issued to someone way 1 is authorized to utilization a card.
Obligation way a moral or legal liability to exercise something.
Remit implies to pay dorsum the money.

ISO is an abbreviation of International Organization for Standardization.

IEC is an abbreviation of International ElectroTechnical Commission.

NBFC is a short-form of Non-Banking Financial Company.

ISO/IEC 7810 is an international criterion that specifies (sets or defines) physical characteristics similar size, thickness, etc. for identification cards.

ISO/IEC 7811 is a laid upwards of nine standards ranging from 7811-1 to 7811-9. It specifies traditional information recording techniques existence used on the magnetic stripe of ID-1 format identification cards.

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 company or NBFC.

ISO/IEC 7813 is likewise an international criterion that specifies the information construction too information content of Track 1 too Track 2. These tracks are acquaint on the magnetic stripe of an identification carte du jour too are used to start (begin or initiate) fiscal transactions.

Embossing is a procedure inward which raised numbers, letters, figures, etc., gets embossed (meaning molded or existence craved) on an identification card.

Checksum is a single-digit added to the goal of a credit carte du jour number to banking company check (validate) the authenticity (genuineness) of it.

Credit Limit is the maximum amount upwards to which a lending entity such every bit a banking company or NBFC tin move give coin to its customers. It is of 2 top dog types, viz., cash withdrawal boundary too credit transaction limit.

Cash's withdrawal boundary is the maximum amount of coin that tin move live taken out alongside the assist of a credit card.

Credit-transaction boundary is the highest boundary assail credit transactions (of purchases) made through a credit card.

Usually, cash's withdrawal boundary is less than the credit transaction limit.

The next half-dozen points clarify the pregnant of credit card:

Image credits © Gaurav Akrani.

Credit carte du jour is a plastic carte du jour issued too authorized past times a banking company or NBFC create to lend coin (i.e. give credit) to its customer.
Primarily, it is a synthetic carte du jour made from a laminated plastic sheet too other materials similar paints, magnetic stripe, microchip (IC), gelatin, hologram, thence on.
It entitles (authorizes) the client to purchase goods too services from merchants, traders too other parties, based on credit sanctioned to him.
Its usage should live inside a prescribed credit limit. This boundary is assail earning capacity too creditworthiness of a cardholder every bit communicated (settled) past times an entity (bank or NBFC) issuing it to its customer.
It gives a client a suitable pick to innovation payments for goods too services that may live most necessary to him on a day-to-day basis.
By its usage, client promises the repayment of credit transactions executed past times him. Here, the repayment along alongside involvement (as applicable) must live paid to banking company or NBFC at a after agreed (contracted) date. Repayments along alongside accrued involvement are made either after a catamenia of 30-45 days or on a monthly billing basis.

Image credits © Galib.

2. definition of Credit Card

It is hard to give a perfect definition of credit card. However, attempts tin move live made to define it nether a general, financial, concern or industrial perspective. Few selected statements given below volition assist you lot derive its narrow too broader meaning.

Here are 3 definitions of credit carte du jour depicted too listed below.

Image credits © Gaurav Akrani.

These definitions existence based on a:

General sense,
Financial perspective, and
Business or industrial context.

1. General sense:: “Credit carte du jour is a suitable choice 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, figurer alongside Internet facility, thence on.”
2. Financial perspective:: “Credit carte du jour is a facility provided past times a banking company or NBFC. It gives its customers a preference to induce got a short-term borrowing of funds commonly at the dot of transaction (i.e. spell 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 company or NBFC to give 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 frequently charged either after a calendar month or 30-45 days later, 1 time credit transactions induce got occurred. The carte du jour boundary is pre-communicated inward written correspondence alongside its holder.”

3. Size of Credit Card

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

Image credits © Gaurav Akrani.

Credit carte du jour has a pinnacle of 2.125 inches (i.e. 53.98 mm or 5.4 cm).
It has a width of 3.370 inches (i.e. 85.60 mm or 8.5 cm).
It has a thickness of most 0.030 inch (i.e. 0.76 mm or 0.076 cm).
Its iv 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).
The to a higher house measurements are averages of the maximum too minimum values defined for credit cards using ID-1 format of ISO/IEC 7810.
ISO/IEC 7810 is an international criterion that specifies physical characteristics similar size, thickness, etc. for identification cards.
The identification cards used for banking purposes include ATM, credit, debit transactions, thence on. These are helpful to send out quick too polish fiscal activities on a day-to-day basis.
Though ID-1 format of ISO/IEC 7810 is an International standard, variations may rarely hand from province to province too fifty-fifty from 1 credit carte du jour issuing entity to another.

4. Anatomy of Credit Card

The anatomy of credit carte du jour tin move live studied past times analyzing its front end too dorsum side.

Image credits © Gaurav Akrani.

1. Sample icon of the facial expression upwards or front end side of a credit card.

Image credits © Gaurav Akrani.

Credit carte du jour has next details:

Issuing entity's logo,
Payment processor's logo,
Hologram,
Expiration date,
Cardholder's name,
Card number,
Individual concern human relationship identifier number,
Issuer identifier number (IIN),
Embedded microchip,
Major manufacture identifier (MII),
Issue date, and
Bank identification number (BIN).

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

Image credits © Gaurav Akrani.

Credit carte du jour shows next details:

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

Now let's hash out to 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 every bit follows:

Logo is an emblem of the entity that issues a credit carte du jour inward society to lend coin to its customers.
Its top dog role is to relaxation too assist instant populace recognition of an issuer.
It's a symbol that helps people seat the call of banking company or NBFC that has issued a credit-card.

2. Payment processor's logo

A banking company issues a credit carte du jour inward collaboration alongside some payment processing company. To dot this tie-up, banking company 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 too compile his credit card's transactions. It likewise helps him to pick out an appropriate payment processor spell shopping too filing payment forms.

Some leading payment processors:

Visa,
MasterCard,
Discover,
American Express (AMEX), and
Japan Credit Bureau (JCB).

3. Hologram

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

Important reasons why hologram is on a credit card:

Hologram acts every bit a seal of originality.
It helps to authenticate a genuine build from a counterfeit one.
It aids inward distinguishing an master copy carte du jour from imitation (dummy) cards.
It acts every bit 1 of the security measures to avoid forgery.

4. Card number

Card number is a long too unique number assigned to a credit card. Often, it is embossed (raised) on its facial expression upwards or the front-side. It is 16-digits inward length too tin move live extended upwards to a maximum boundary of 19-digits.

An ISO/IEC 7812-1 carte du jour number is typically 16 digits long too grouped inward iv sets alongside iv digits inward each set. It consists of:

Major Industry Identifier (MII) digit value,
Bank Identification Number (BIN) instantly replaced alongside an Issuer Identifier Number (IIN),
Individual Account Identifier, and
Checksum or banking company check 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 to a higher house sample icon of the front end side of a credit carte du jour to teach a zoomed preview too observe 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 get-go laid upwards of iv digits (which likewise includes MII digit value) of a credit carte du jour number is called Bank Identification Number (BIN). Printed inward pocket-size fonts below the carte du jour number BIN is located on its front-left side.

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

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

With the rising need too recognition of credit cards, the fiscal institutions opine the replacement of BIN alongside IIN. The role of such replacement was to encompass wider areas of fiscal services, to withdraw diverse service providers nether 1 roof too likewise to relaxation their identification. The IIN number consists of initial half-dozen digits when compared to BIN, which comprises of exclusively get-go four. This incorporated modify has resulted inward to a greater extent than prompt too proper assistance to compile too to consummate the carte du jour processing.

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

Here, n equals the full number of digits constitute inward a credit carte du jour number.
For example, if n=16, thence 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 too tin move attain upwards 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 goal of a carte du jour number to assist to verify (confirm) its accuracy too validate its authenticity (genuineness).
Most carte du jour numbers encoded alongside Checksum digit utilization 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, thence on.

5. Expiration Date

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

The terminal Date of validity is existence referred every bit VALID THRU too read every bit ‘valid through.’

It uses the MM/YY appointment format. Here:

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

For example, if 12/22 is on a credit card, thence 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 move say that it volition teach expired too 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 get-go too 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 fit 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 every bit a semiconductor memory.

Some essential features of Microchip are every bit follows:

Microchip acts every bit 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, thence on.
It provides a comprehensive security to preclude cloning or duplication of a credit card.
It encrypts the sensitive information it stores. If hackers scan a credit carte du jour alongside some electronic spying device, thence they volition exclusively fetch encrypted junk too non the master copy information that the chip contains. This encrypted fighting is almost useless to them every bit it is really hard to decode too misuse it intentionally.
It has a superior semiconductor retention too amend processing capacity.
It acts every bit a mandatory too 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 too gets create to live used past times a cardholder until its twenty-four hours of expiry.

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

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

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

9. Magnetic stripe

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

Its features are every bit follows:

Magnetic stripe is frequently on the dorsum side of a credit card.
It comes inward 3 unlike colors viz., black, brown, too silver.
It is a storage device.
It is divided farther into 3 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 every bit follows:

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

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

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

Track 1 generally contains tape of an alphabetical value that is ever a credit cardholder's call too his related information.

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

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

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

Now alongside continuous improvement inward the technology, magnetic stripes are getting obsolete every bit novel contactless credit too debit cards are emerging inward the market.

10. Security code

Security Code is:

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

The top dog features of the carte du jour security code:

Security code gives an additional layer of security to the credit card.
It helps to banking company check too confirm the physical accessibility of the card.
It prevents an unauthorized carte du jour access too minimizes online frauds.

The carte du jour security code is existence named too abbreviated differently past times diverse carte du jour payments processing companies. Visa, MasterCard, American Express too JCB telephone telephone it every bit CVV2, CVC2, CID, too CAV2, respectively.

CVV2 is an abbreviation of Card Verification Value Two.
CVC2 is a short-form of Card Validation Code Two.
CID stands for a Card Identification Number.
CAV2 tin move expand every bit Card Authentication Value Two.

In the instance of Visa, MasterCard, too JCB, carte du jour security code is a 3-digits number too is commonly printed on the nurture or dorsum side of a credit card.

However, inward instance of American Express, it is a 4-digits number printed on the facial expression upwards 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 set or write his authorized signature. It thence must live signed past times a cardholder alongside a skillful permanent marking pen. For this purpose, a pen alongside dark-colored ink preferably bluish or dark must live used.

Features of having a signature panel:

Signature panel is an added characteristic for customization too security of a credit card.
It allows the merchants too traders to validate the authenticity of a someone using a credit card. It helps them to cross banking company check whether the physical signature inward the transaction invoice matches alongside the 1 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 disputation is printed on its top-right corner,

“NOT VALID UNLESS SIGNED.”

12. Additional information

Additional information is in that location on the dorsum side of a credit card.

It mainly contains useful details about:

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

Service disclaimer acts similar a legal acknowledgment (acceptance) for an understanding on the damage too atmospheric condition betwixt a credit carte du jour issuing entity too the cardholder.

Address of an issuing entity gives official mailing or contact information most the banking company or NBFC that issued a carte du jour to its customer. If anyone is inward possession of a lost too constitute credit card, thence inward such a case, this address helps a owner to give upwards the constitute carte du jour to its issuer.

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

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