ALL ABOUT CREDIT CARDS.
Commonly referred to as “plastics”, credit cards are now quickly replacing cash as the most preferred method of payment by customers. Credit cards are commonly used for electronic transactions, and swiped easily on a credit card reader for verification. These cards are issued by banking companies and works the same way like electronic or digital money since you can use them to pay for your purchases, then pay the same amount back to the issuing bank.
If you own a debit card, then you have a general idea of what credit cards look like too, though they function in totally different ways.
Physically, though, one of the things you will immediately notice that they both cards have would be the black magnetic strip at the back. It is this black stripe that contains the card owner’s primary information such as his account number, name, zip code, address, remaining balance on his account among others. As such it is very important that this black streak not be damaged otherwise you will not be able to charge anything, and would need to have the card replaced by your bank.
If you have used charge cards to pay for your purchases in the past, chances are you are now familiar with the usual method of using it – by swiping it on an electronic pay terminal which accesses your banking information so that your desired transaction can be processed. These electronic terminals are what they call credit card readers.
Card readers work by reading the information on the stripe itself, then sending that same information to the bank’s computer to verify if the account is still valid and whether it has enough funds to charge the total price to be purchased. Should the verification process be successful, then the amount to be charged is taken out of the account and a confirmation message is then sent back to the originating machine (of which, in this case, would be the card reader), all within a minute or two.
Unlike before wherein cash was the most preferred mode of payment, today you seldom see people doing that anymore, and instead are more comfortable whipping out their charge cards from their wallets. Businesses and commercial companies are fully aware of this trend too, and are now joining the bandwagon by providing their customers a means to pay with their credit cards instead of cash. Plus, with the recent boom in e-commerce, consumers have brought the act of shopping to the internet already and paying for their purchases with their cards – and such practice is expected to continue to rise.
If you own a credit card, it would be a great tool to help you build a good credit history, plus it can be used in emergencies when you have no available cash yet needing to pay for something, though make sure that you will use it in a smart and wise way.
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