How Credit Cards Work?
How Credit Cards Work?
As first step, the credit account of a customer should be approved by the credit provider. This step confirms that the customer can make purchases where this credit provider's systems are available. Second step is to issue a credit card to customer by a card issuer, which is usually a bank.
Merchants usually put visual markings outside of their store to inform customers about the type of credit cards they accept (Visa, MasterCard, American Express, Diners Club, etc..) After a purchase, credit card user's confirmation is need to finish the payment process. To make this happen, credit card owner enters his or her personal identification number (sometimes referred as credit card password) to a POS machine which is connected to the credit union center. It is also possible use electronic authorization for online purchases made through Internet.
Online POS devices and other various electronic verification systems allow merchants to verify that if the credit card is valid and if it has enough credit for the purchase. For this confirmation, whole batch of data is transmitted to bank center or credit union data department. After the confirmation or rejection, the answer has been sent to POS machine immediately. The most impressive part is that the whole process takes only few seconds; most of the time less than using cash for the purchase.
Credit Score: How to get the money?
Credit score is a term which is widely used in credit card and all other credit related issues. Credit score can be described as a number which represents the creditworthiness of a person. In other words, it gives information about person's possibility of paying his or her debts.
Credit provider companies such as banks or credit card companies widely use credit score as the main criteria. They evaluate potential risks of lending money to the particular customer by examining their credit score. As credit score is adapted to be used more widely, the process of getting a credit or credit card from the banks became much shorter. There are various credit score models. The most widely used one is the FICO Score model. FICO Score model uses some criteria to calculate the credit score.
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