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Interest - Not a Nightmare - Part 1

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In the modern age of plastic money, I always wonder why a lot of people still run away from a Credit Card. Whenever I talk to them, I find out that not having Credit Card everyone has two common reasons: 1. Humongous Interest Charged by Credit Card Company, 2. Not able to manage extra expense. Managing expenses are based on individual choice and priority. We can't tell anyone that how they can manage their expenses. But I can tell, how can we save us from getting charged huge interest. Before that we have to understand the interest. Usually interest are of two type: 1. Simple Interest, 2. Compounding Interest. Simple Vs Compounding Interest The basic difference between Simple Interest and Compounding Interest is that we calculate Interest on Interest in case of compounding interest. For interest calculation on credit card companies use following methods for interest calculation: Monthly, Daily, Monthly Using Average Daily Balance. Monthly: By using this method interest got calcula...
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SMS Vs DMS

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I swipe my Credit Card at POS terminal, it took two days for reflecting the balance on my card account. On the same day I have performed a transaction using my Debit Card at ATM machine and the balance got impacted immediately. Why we have difference in both transaction processing? How does it work?  This happened due the different messaging system used by the associations. Most of the associations are using SMS and DMS both for Transaction processing. Single Message System and Dual Message System these are the two ways for processing the card payment transactions. In Dual Message System we first get authorization transaction from the association, on the approval of this transaction issuer can block card holders Open To Buy (OTB) only. At the end of processing day or the cut off time defined by association, issuer gets another message in form of clearing file. On the processing of this file issuer will impact the balances of card holder and release the blocked OTB. SMS Vs DMS If we...
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Card Provisioning To Wallet

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Mobile has become the most important part of anyone's life. Without mobile you can't imagine your single  day at all. These days cards are also available on your mobile phones. If your mobile support NFC (Near Field Contact) then you can enable this feature in your mobile. POS Payment using NFC   For using this feature you have to have Apple Pay, Samsung Pay or Google Pay (Android Pay) type of wallet software in your mobile. Apple Pay and Samsung Pay has a limitation that these apps are device specific. If we talk about apple, it has regional restriction as well, it doesn't work in may region.  Apple Pay Vs Google  Pay Vs Samsung Pay   When you add your card in these Wallet App, this process is called as provision the Card(Also know as tokenization). In the provisioning process following terms are usually used: 1. Green Path: A virtual credit card is provisioned without referral to the issuer. 2. Yellow Path:  The provisioning request is referred to the ca...
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Card Holder's Agreement

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I was going through my last month's credit card statement. Normally, I see only a glance at the credit card statement. But, this time I stuck at the charges, I was not expecting any charges on my credit card statement. Then I start looking at the transaction details section and found membership fees on my statement. I got confused why this charge was there on my statement. Then I called customer care and inquired about the same. They explained everything to me and advised me to refer to my card Holder's Agreement, which I had signed at the time of signing up for the credit card. Card Holder's Agreement/Most Important Terms & Conditions/Disclosure/Terms & Conditions are the commonly known terms of Card Holder's Agreement. When applying for a credit card, everyone has to agree to these terms and conditions of a credit card. This is the most unnoticeable document, which will be ignored by most credit card users due to its lengthy format, and many times we assume we...
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Do you know how we should read the Credit Card Statement?

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One day, one of my friends called me, he was seeking my help in understanding his Credit Card Statement. He was getting a hard time understanding the statement. I have seen such kind of issue with other people. Only a few people may be able to understand the statement, not the full statement. The statement usually has the following sections in every credit card statement: Statement Summary Account Summary Due Details Credit Limit Information Statement Messages Transaction Details Rewards and Cash back Summary Loan/EMI Information Statement Summary: Statement with Credit Balance Statement with Debit Balance The above images will give you a little idea about the statement summary. Following are the important information it contains Statement Date - It's your billing cycle date. On this date every month your statement gets generated. Card Number - It contains the number of the card that this statement belongs to. Payment Due Date - This is the date till you have to make payment. If yo...
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Tips and Trick of Selecting Credit Card

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Tips and Tricks of Selecting Credit Card These days whenever you visit any big store, near to billing counter you may easily find a gentleman, who is seeking your time so he can explain you that the credit card offered by his company is better than your credit card. Most of us are using one or more Credit Cards these days. Did you select your Credit Card or they selected you? What should you consider when you want to apply for a credit card offered by different companies? Joining Fees: Most of the companies offer cards with no joining fees. What if you go through their agreement you will find they would be having the Annual Fees/Membership Fees in the following years. Interest Rate:  Whenever you asked a sales representative about the Interest Rate they will always tell you 3.25% only. They never tell you that it's monthly rate not annual rate. Statement Date: I don't think anyone of us really bothers about that what should be your Statement Date while applying for a credit ca...
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