Credit cards are the most frequently used financial tools in our daily lives. Do you know the basics of credit cards? The topic that the Card God Group is going to talk about today is the encyclopedia of basic knowledge about credit cards. Let’s take a look at the types of credit cards and various little knowledge.
First, let’s talk about the types of credit cards:
Credit cards have become popular and developed around the world, and today they have developed into a big family with a prosperous family and many members. Although there are many types of credit cards, we can still distinguish them based on the fundamental characteristics and basic functions of bank cards and classify them according to different classification standards. No matter how different the types of credit cards are, they cannot be separated from the following categories.
(1) According to the credit card issuing institution, it can be divided into bank cards and non-bank cards;
● Bank Card (Bank Card)
Bank cards are issued by financial institutions such as banks to facilitate customers to obtain financing channels, and have various payment cards with functions such as shopping, consumption, transfer settlement, etc.
● Non-Bank Card!
Non-bank cards mainly include retail credit cards issued by commercial institutions and travel and entertainment cards issued by the tourism service industry:
Retail credit cards: issued by retail department stores, oil companies, telecommunications companies and other enterprises. Cardholders can use the card to shop in designated stores or refuel at gasoline stations, etc., with regular settlement. The circulation scope of this kind of credit card is greatly restricted and the development scope is narrow;
travel and entertainment card: issued by airlines, travel companies, etc., used to pay for various transportation costs, dining, accommodation, entertainment, etc., and is mostly issued to business travelers. The current American Express and Diners Club cards belong to this type of credit card;
(2) According to the storage medium of credit card information, it can be divided into magnetic stripe cards and chip cards ;
● Magnetic Strip Card (Magnetic Strip Card)
The earliest prototype of a credit card was a paper or metal card. At that time, credit cards were mainly provided by large retailers such as hotels, oil companies, and department stores to relatively wealthy customers for payment and credit purchases. In 1974, magnetic stripe credit cards appeared, and magnetic stripe technology began to be used in credit cards.
● Chip Card (Chip Card / IC Card) )
is also called a smart card (Smart Card) and is a contactless payment method (Contactless Payments). Frenchman Roland Moreno invented and designed the smart card, and launched the world's first smart credit card in France in 1978. This type of card is currently widely used in Europe. A smart card is a special computer chip embedded in a payment plastic card (which can be a credit or debit card) that contains the available amount and personal information. When the smart card is used on a specialized terminal, the embedded chip can perform information exchange, calculation and other multi-functional operations through the terminal, and the contained data can be changed and updated.
Compared with ordinary magnetic stripe credit cards, the rich data storage capacity makes smart cards have more functions. For example, it can carry electronic cash (Stored value Card); after being programmed, it can be used as a security pass card for entering and exiting office floors or hotel room keys; it can be used to transfer large amounts of funds; it can check credit card usage limits, reward points, and airline miles; it can even withdraw or remittance funds from bank accounts and money markets. The multifunctional features of smart cards mean that consumers only need to carry one or two cards, which is very convenient. For merchants, the use of smart cards reduces the risk of theft and counterfeiting. For banks, smart cards can save labor costs in processing cash and checks.
Currently, most merchant point-of-sale terminals in the United States use magnetic stripe scanning technology. There is no economically feasible way to integrate chip technology and magnetic stripe technology. Although promising progress has been made over the past five years, there are still some obstacles to widespread adoption of smart cards in the United States. Today, the total number of smart cards in the world is just over 200 million. In the United States and Canada, there are about 31 million, accounting for about 4% of the payment card market. Since smart cards have many advantages, such as advanced technology, good confidentiality and high information storage characteristics, the development prospects of smart cards are very promising.
(3) According to the different repayment methods, it can be divided into: credit card , quasi-credit card and debit card;
● Credit card (Credit Card)
is a credit card in a narrow sense. It is a payment card that provides consumer credit to cardholders. Cardholders do not need to make deposits at the card issuing bank, but can "buy first, settle and pay later." Based on the customer's credit and other circumstances, the card issuer sets a "credit limit" for each credit card account, such as $1,000. This means that cardholders can use their credit cards to pay bills as long as the total amount does not exceed $1,000. Generally, the card issuer sends a bill to the cardholder once a month. Within a certain grace period after receiving the bill, the cardholder can choose to pay off the account in full without paying interest; or pay part of the account, or only pay the minimum repayment amount, and then pay interest later. Since credit cards do not require a deposit, credit card holders do not have to have a bank account with the card-issuing bank. This type of credit card is currently the most widely circulated payment card, and its core features are credit sales and revolving credit.
● Semi-Credit Card Card)
Quasi-credit card is a unique credit card type created by our country in the process of developing the credit card industry with Chinese characteristics in order to suit our country's political and economic system, social development level, people's consumption habits and other factors. This kind of credit card has both a credit card and a debit card. Some functions of the card generally require the payment of a deposit or the provision of a guarantor. When using the card, you deposit first and then consume, and interest is calculated on the deposit. When shopping and spending, you can make a small overdraft within the limit approved by the card-issuing bank, but the overdraft amount will accrue interest from the date of overdraft. The outstanding balance must be paid off in one go. There is no interest-free repayment period and minimum repayment amount. Its basic features are transfer settlement and shopping consumption.
● Debit Card (Debit Card)
Corresponding to the "postpay" of a credit card is the "cash payment" of a debit card. In order to get a debit card, the cardholder must have an account with the card issuer and maintain a certain amount in deposits. When a cardholder pays with a debit card, the payment is transferred directly from their account at the card-issuing bank to the bank account of the merchant selling goods or providing services. Therefore, the funds in the debit card actually come from the cardholder's checking account or current account (ie, current deposit account), and the payment amount of the debit card cannot exceed the amount of the deposit. In fact, for cardholders, there is no essential difference between the process of paying with a debit card and the process of withdrawing money directly from the bank and then paying with cash. It is just that it is much more convenient to use a card. It can be said that debit cards are just another more convenient form for consumers to pay cash or checks, so debit cards are also called check cards.
(4) According to different circulation scope, it can be divided into international cards and regional cards;
● International Card
International Card refers to the International Credit Card Organization brand credit card issued by the card issuer. It can be used unimpeded by institutions and outlets around the world that can accept this brand of credit card. No matter which country the international card is issued by, the settlement currency of the credit card must be a freely convertible currency. An international credit card must meet two conditions: the brand of the international credit card organization and the settlement currency being a freely convertible currency.
● Regional Card (Local Card)
A regional card is a credit card issued by a regional credit card organization or a certain country and region, and can only be used in a certain region, country or region.
(5) According to the different settlement currencies of credit cards, they can be divided into foreign currency cards and local currency cards;
● Foreign Currency Card
Foreign currency cards refer to credit cards whose settlement currency is not the legal currency of the country where the card issuer is located. Generally speaking, most credit card operators belong to institutions in countries with freely convertible currencies, so in such countries, there is no difference between foreign currency cards and local currency cards; in most developing countries, the currencies of many countries are not freely convertible currencies. Therefore, even if a credit card using this currency as the settlement currency joins an international credit card organization, the issued card can only be a regional card and cannot be used internationally.To this end, card issuers must use a freely convertible currency, that is, an internationally accepted currency, as the settlement currency for their international cards, so as to achieve the purpose of issuing internationally accepted credit cards. This is the so-called foreign currency card.
● Local Currency Card
A local currency card is a credit card that uses the legal currency of the country where the credit card operator is located as the settlement currency. In countries where the legal currency is freely convertible, the local currency card is an international card as long as it is a brand belonging to an international credit card organization, otherwise it is a regional card. Even if the settlement currency is freely convertible, it cannot go abroad; in countries where the legal currency is not freely convertible, even credit cards with international credit card organization brands can only be used domestically, that is, the local currency card is equivalent to a regional card.
(6) According to the number of currencies in the credit card account, it can be divided into single-currency credit card and dual-currency credit card;
● Single-Currency Card (Single-Currency Card)
Single-currency credit card is a credit card with only a single settlement currency. Traditional credit cards belong to this type of credit card.
● Dual-Currency Card
Dual-Currency Credit Card is a new card type developed to meet the needs of economic and financial development and increasingly frequent international settlements in many developing countries whose legal currencies are not freely convertible currencies. Credit card operators have developed a new card type for the purpose of saving resource costs and developing one card for multiple uses. This type of credit card combines the functional features of a foreign currency card and a local currency card. The two settlement currency accounts of the domestic currency and another freely convertible currency are co-stored in one credit card. Account processing and settlement are performed in the local currency account when used domestically, and accounting processing and settlement are performed in the foreign currency account when used abroad, thus ultimately achieving the ultimate goal of traveling the world with one card. This kind of card was first issued in China by the Industrial and Commercial Bank of China in 1996 - Peony International Card.
(7) According to the credit card affiliation, it can be divided into principal card and supplementary card ;
● Principal Card (Basic Card / Principal Card)
Principal Card is a credit card issued by the card issuer to individuals who are over a certain age, have full civil capacity , and have stable work and income.
● Supplementary Card (Additional Card / Supplementary Card)
Additional card refers to a credit card issued by the card issuer when the main cardholder applies for his or her parents, spouse, children or relatives and friends who have full capacity for civil conduct. The principal card and the supplementary card share the account and credit limit, or the principal card can independently limit the credit limit of the supplementary card. The principal cardholder is responsible for repaying all debts incurred by the principal card and the supplementary card. In foreign countries, the principal cardholder can not only apply for supplementary cards for his relatives and friends, but also apply for supplementary cards for his business partners. However, the principal cardholder and the supplementary cardholder need to bear the responsibility for repaying the debts under each other's credit cards. In other words, the supplementary cardholder is also responsible for repaying the debts of the principal cardholder.
(8) According to the credit status and credit status of the cardholder, it can be divided into unlimited card, platinum card , gold card and ordinary card. Card issuers generally issue different levels of credit cards based on the social status, economic strength, purchasing power, credit rating and other standards of credit card applicants. Generally, ordinary cards are the lowest level, and high-level credit cards have higher credit limits than low-level credit cards;
● Infinite Card
Infinite Card is the highest-level credit card launched by card issuers due to the increasingly fierce competition in the financial environment and in order to lock in the consumer market at the top of the pyramid. It usually enjoys more respected services and rights than platinum cards. Infinite Card is a high-end credit card brand organized by Visa International. Currently, only nine countries or regions in the world have launched Infinite Card products, namely the United States, Brazil, Mexico, Costa Rica , Kuwait , Dominica, Iceland, Italy and Taiwan, and the total number of cards issued is only 30,000. Since Infinite Card is not a popular credit card product, and the emphasis is not on the number of cards issued, but on the contribution of cardholders, so far, the number of Infinite Cards issued around the world is extremely limited.Credit card brands of the same level organized by MasterCard International are called World Cards.
● Platinum Card
Platinum Card is a credit card launched by the card issuer to distinguish it from Gold Card customers, and provides more high-end services and rights than Gold Card. It generally adopts a membership system, has customer service hotline services and highly respected value-added services. It usually has service functions such as global airport VIP room privileges, personal annual consumption analysis reports, high-value traffic insurance, global emergency support services (GCAS), and 24-hour global exclusive platinum hotline phone services.
● Gold Card
● Common Card
Common Card is the lowest level of credit card issued by the card issuer. In the past, there were also card issuers that issued Silver Card. Now, the silver card level setting is generally cancelled, and Silver Card and Common Card are grouped into one category, referred to as Common Card. In fact, ordinary cards also have advantages and disadvantages, which are reflected in the credit limits approved for cardholders.
(9) According to the different objects of credit card issuance, it can be divided into corporate cards and personal cards;
● Business Card
Corporate card, also known as business card , is a credit card issued by the card issuer with business services as its core. Specifically for the needs of the company, it launches differentiated employee credit lines, comprehensive statements, business travel preferential plans and other professional services to prepare company employees for official business travel consumption, business entertainment and other expenses. When a company uses a commercial card, it can enjoy an interest-free repayment period for consumption, which helps reduce the company's liquidity pressure. In addition, there is a dedicated online financial management report data platform that can provide various financial statements in real time, fully reflecting the flow of the company's business expenses, making the company's financial management and process control clearer and more effective. The card issuer will grant the company a comprehensive credit limit for the commercial card based on the company's credit standing. Within the scope of this credit limit, the company can grant different credit lines according to different levels of employees or actual needs, and can adjust the credit limit or limit the use at any time, making the company's financial allocation more flexible. The company gets a comprehensive statement every month, including the total business expenses such as business travel, business entertainment and operations, clearly showing the monthly transactions of card-holding employees, comprehensively simplifying the bill accounting process, saving administrative costs, and greatly improving financial efficiency. At the same time, the company's card-holding employees can receive a personal statement every month, listing various business expenses in detail to facilitate cardholders' item-by-item verification. For example, the powerful DOL (Smart Data Online) online financial management report data platform of MasterCard Business Card, coupled with flexible and changeable credit limits, enables companies to control business expenses without being restricted by time and space, and can easily achieve unified management across countries and regions. The cutting-edge online management system SDOL (Smart Data Online) is designed, developed and maintained by Mastercard International Organization and supports 13 languages including Chinese, English, Japanese and Korean. Help company financial managers reduce traditional multi-layered accounting procedures, more effectively integrate, organize and analyze various transaction data related to GF MasterCard commercial cards, and understand the company's tariff flow in detail. This data reporting system facilitates systematic financial fee analysis and is directly connected to the Internet to understand all expenditures and usage status of all commercial cards of cardholders and the company at any time and anywhere to help the company simplify management procedures. At the same time, you can also check the usage of each subsidiary and branch, which is also simple and fast, effectively controlling costs, saving expenses, and keeping security confidential.
● Personal Card
Personal card is a credit card issued by the card issuer to individuals with full capacity for civil conduct and stable work and income, which is different from company cards.
(10) According to the different shapes of credit cards, they can be divided into standard credit cards and special-shaped credit cards;
● Mini Card (Mini Card)
Pocket Mini Card is a newly launched credit card variety by Visa International. Generally, MINI credit cards are composed of a large card and a small card.The large card is a traditional credit card, while the small card has absorbed the most advanced and trendy card design concepts of VISA International Organization, and made bold innovations and breakthroughs in the card shape. Compared with traditional cards, the small card has abbreviated nearly half (43%) in size, and has a unique popular eyelet design in the lower left corner of the card, making the shape more compact and exquisite, and the appearance more refined and fashionable. In particular, this seemingly inadvertent opening is integrated into the ingenious idea of the card design. Through this small hole, the cardholder can easily combine the card with personalized accessories such as mobile phones, keychains, necklaces, etc., making it more convenient to carry and travel easier whether out for dinner, shopping, or fitness. On March 9, 2004, China Merchants Bank took the lead in launching the VISA MINI credit card in China.
● MC2 Card
This card is a newly developed credit card type launched by MasterCard International in 2001. The lower right corner of the card is round, so it is called mc2 card. This is the first credit card that breaks the traditional design of standard credit cards. It was the first time that a credit card could change its shape.
● SideCard
MasterCard's credit card, called SideCard, is MasterCard's second breakthrough in design. Compared with mc2 card, SideCard is more lightweight. This credit card is designed to be easy to carry. It is 8.57 cm long and 3.81 cm wide. Cardholders can attach the card to their keychain and carry it with them. The card will be launched first in the Singapore market. It is said that the card launched in Singapore is also the first credit card with contact-free chip technology. At present, this card has also been launched in Hong Kong, my country.
● Irregular-shaped credit card
Due to extremely fierce competition in Taiwan's credit card market, a credit card company finally launched this irregular-shaped card sample at the end of February 2004 to seize the market. This unique MasterCard travel card launched by the Commonwealth Bank of Taiwan features an aerial photo of Taiwan on the front, and the edge of the card is cut along Taiwan's west coastline, breaking away from the stereotypical curved or square designs of ordinary credit cards. This irregularly shaped credit card is the first of its kind in the world.
● Letter-shaped credit card
This special-shaped card is the first letter-shaped credit card jointly issued by Guangdong Development Bank and China Southern Airlines. The card is divided into black M-shaped card and red F-shaped card. It is planned to be widely promoted in the society in the first half of 2005.
Categories of domestic payment cards:
The card categories currently issued by domestic card issuers mainly include:
1. In terms of credit card brands, they include VISA, MasterCard, American Express and UnionPay brands;
2. In terms of credit card levels, they include regular cards, gold cards and platinum cards;
3. The scope of use of credit cards is divided into international cards and domestic cards;
4, according to the credit card account settings, it can be divided into single currency cards and dual currency cards;
5, according to the credit card settlement currency, there are RMB cards, US dollar cards, Hong Kong dollar cards, and Euro cards;
6, according to the nature of credit cards, it can be divided into three categories: credit cards, quasi-credit cards and debit cards.
Bank Card Bank Card
Charge Card (Charge Card) Charge Card
Credit Card (Credit Card) Credit Card
Quasi-Credit Card Semi Credit Card
Debit Card Debit Card
Cash Card ATM Card
Chip Card/Smart Card Chip Card/Smart Card
Stored Value Card Prepaid Card
Approval Card Affinity Card
Co-Branded Card Co-Branded Card
Business Card Business Card
Card God Group Summary: Friends, after reading these encyclopedias of basic credit card knowledge, do you feel that there are so many types and different application scopes of credit cards? The Card God Group has always said that good use of credit cards is a boost to business and projects, but credit cards are a scourge in the hands of friends without the ability to control them. Because you have to pay back the credit card when you use it. If your monthly income is 5,000 yuan, but your spending power is 10,000 yuan, you will fall into the trap of being a card slave sooner or later if you use a credit card like this.The Card God Team has encountered many readers who say that credit cards are a scourge, but why don’t they reflect on themselves? If you control your spending power and spend your money where it should be used, what will happen? Is a credit card a tool for entrepreneurship and investment in your life? Or as a settlement card for friends to eat and drink? I hope this information will be helpful to my friends.
