A credit card is safer and more convenient to use than cash. But every Luxury has certain side effects also. Often heard / read stories about credit card frauds. How people end up footing huge shopping bills of items they actually never purchase. And now, with ecommerce taking off in the country, the realm of credit card criminals has expanded further. To avoid this what we should always take care the following two things when we own a credit card:

• Credit Card Number
• CreditCard verification Value (CVV): CreditCard verification Value (CVV): It is the number on the backside of your card. The CVV is not contained on the magnetic stripe of the card, it is not typically included in the transaction when the card is used face to face at a merchant, but forms an important part of Online Transactions.

Card companies say that where there is no physical delivery of goods, such as in the e-ticketing, e-shopping and service sectors, there exists a higher probability of credit fraud.

You might be having three cards in your wallet. But knowing and understanding the numbers on your card is the most important aspect of owning a card. If you take a close look at your credit cards, you'll probably wonder what all those numbers stand for. Every digit actually stands for something specific. Lets understand the Logic behind these numbers.

What does that 16 digit CreditCard Number signify?
Hypothetical Example of Numbers on Credit Card

The numbers stand for:
• The first digit in your credit-card number signifies the Network or the type of card you have

3 - travel / entertainment cards
4 - Visa
5 - MasterCard
6 - Discover Card

• The structure of the card number varies by Network:

American Express - Digits three and four are type and currency, digits five through 11 are the account number, digits 12 through 14 are the card number within the account and digit 15 is a check digit.
Visa- Digits two through six are the bank number, digits seven through 12 or seven through 15 are the account number and digit 13 or 16 is a check digit.
MasterCard- Digits two and three, two through four, two through five or two through six are the bank number (depending on whether digit two is a 1, 2, 3 or other). The digits after the bank number up through digit 15 are the account number, and digit 16 is a check digit.

The Stripe
A product of the electronic revolution, each credit card carries a magnetic strip in which is encoded all information relevant to that card. A magnetic stripe on the backside of your card is capable of storing data by modifying the magnetism of tiny iron-based magnetic particles on a band of magnetic material on the card. The magnetic stripe, sometimes called a magstripe, is read by physical contact and swiping past a reading head. The magstripe on the back of the card is very similar to a piece of cassette tape.

If the ATM isn't accepting your card, your problem is probably either:
• a dirty or scratched magstripe
• an erased magstripe

Information on the stripe
Strip of magnetic tape, affixed to bank credit and debit cards, encoded with cardholder identifying information, such as the Primary Account Number and card expiration date, permitting automated handling of transactions. The card industry standard for magnetic stripes allows three separate tracks of encoded data and each track is about one-tenth of an inch wide. The ISO/IEC standard 7811 is used by banks; specifies:

• Track one is 210 bits per inch (bpi), and holds 76-alpha numeric data characters.
• Track two is 75 bpi, and holds 37 Numeric Data characters.
• Track three is 210 bpi, 104 Numeric data characters.

Authentication
There are three basic methods for determining whether your credit card will pay for what you're charging:

• Merchants do voice authentication using a touch-tone phone.
• Electronic data capture (EDC) magstripe-card swipe terminals are becoming more
• Virtual terminals on the Internet.

Mechanism of credit card
There are three parties to a card. They are:

• Credit Card Holder
• Merchant
• Bank (credit Card Company)

On the credit card, cardholder gets the interest free credit period and the discount offers, cash back schemes, reward points etc. The merchants get a secured payment for the sales he has made throughout the month within 6 to 8 days after the discount fee that is charged by the bank. Banks make money through fees from merchant establishments and the higher than normal interest rate paid by cardholders for the balance in their card.

These are some of the basic aspects of your card that we all should know. We’ll continue to share with you more basics of Loans/ Credit cards.

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