The credit card – independence & danger in one? | Credit cards 2017

The German name credit card is a translation of the English name Gudrun Brangwen Card. This is understood to mean a card with which it is possible to pay for various products such as goods or services without cash. This is possible both in shops or other institutions as well as when paying online on the Internet. With a credit card, money can also be withdrawn at various ATMs or at a bank counter. Credit cards can generally be used worldwide.

The best known credit card companies are Visa and MasterCard, which offer their cards in cooperation with different banks. There are also American Express and Diners Club, which issue the credit cards themselves. As the name suggests, a type of credit is granted when using a credit card. Unlike when paying with an EC card, whereby the respective amount of money is always debited directly from the corresponding account, a credit card is only debited after a certain period, usually once a month.

The history of the credit card

The history of the credit card

The credit card was introduced in the United States in 1894. Initially, it was only used by certain institutions and, for example, by hotels to certain guests. From the 1920s, this form of payment was introduced by other institutions. These include, for example, mineral oil companies or department stores. A few years later, other providers such as airlines and restaurants were added. In contrast to today’s credit card model, however, these were specifically intended only for payment to the respective card issuer and could not be used for other payments. The credit card model as we know it today was also first introduced in the United States. In 1950 the so-called General Purpose Gudrun Brangwen Card (universal credit card) was introduced by the so-called Diners Club.

Members of the club should receive this card in order to be able to pay without cash in different restaurants. Since the Diners Club had practically no competition on the market for years, it was able to expand quickly, even to countries outside the United States. Two different card names were introduced: the travel and entertainment credit card and the company credit card. Both were aimed primarily at people who were traveling a lot for business or pleasure. In 1958, American Express was added as another credit card provider. At the same time, the bank credit card developed, as is common with us today.

The bank was able to use the card to pay at various points on credit. If this loan could not be paid within a certain period of time, interest was payable on him. Since the creditworthiness of people who applied for a credit card was often not checked, the card quickly lost confidence. This only changed when several laws were passed regulating the issuing of credit cards. In 1966, several credit card associations merged, which over the years developed into one of the largest internationally recognized bank credit cards, the MasterCard. At this time the Visa Card also developed, which is also internationally recognized and is one of the largest providers worldwide.

Appearance and function of a credit card

Appearance and function of a credit card

A credit card is usually made of plastic and is regulated according to an international standard in terms of its size, the so-called credit card format. The mostly 16-digit number of the credit card is embossed on the front of the credit card in the form of an embossing. The first four numbers represent the respective credit card company. The number five indicates the type of credit card. The sixth number indicates whether it is, for example, a company card or a private card.

In addition, the name of the card holder and the date up to which the card is valid are printed. On the back of a credit card there is usually a magnetic stripe on which the card data is stored, a field in which the respective owner has to sign with his signature, and a card verification number. In the long term, the magnetic stripe should be replaced by a chip on all cards. With the credit card number, the owner of the card can be clearly assigned during a transaction. When making a purchase, the owner is usually verified by a signature. When withdrawing money from an ATM, a PIN (personal identification number) previously set by the bank must be entered for identification.

Acceptance of credit cards

Acceptance of credit cards

Acceptance of credit cards differs worldwide. There are approx. 35 million MasterCard acceptance points and approx. 20 million where you can pay with a Visa card. There are also over a million ATMs where money can be withdrawn with a credit card. In the United States, credit cards can be used to pay almost anywhere and almost anything. There are many acceptance points in Germany, but there are also restrictions. Smaller shops in particular do not offer this type of payment option.

The fact that it is not possible to pay with a credit card everywhere in Germany, for example, is partly due to the technical equipment required for this, but also due to the fees that are charged when paying with a credit card, as this is paid for by the merchant, must be worn. The amount of the fees always depends on the amount of money and also on the industry in which this transaction takes place. These transaction costs are usually 3 to 5%, but can also range from 1 to 10%. Fees may also apply to credit card holders. Some issuing institutes charge an annual fee for use. While payment by credit card does not incur any fees in Germany, the opposite is the case when paying abroad. Withdrawing money from a yellow machine, whether at home or abroad, is always subject to a charge.

Credit card fraud on the Internet

Credit card fraud on the Internet

Due to the increasing payment with credit cards on the Internet, fraudulent actions were increasingly carried out. Credit card data is creeped up by wrong mails or online shops and criminal transactions of money are then carried out. For this reason, a security system for payment on the Internet was introduced. Various data that are not noted on the credit card, such as the owner’s date of birth and a password that will be requested for future transactions, must be entered once. This is to ensure secure payment with credit cards on the Internet.

If you are unemployed, schoolchildren, pensioners, welfare recipients or insolvent, it is not possible to apply for a credit card through the house bank. However, there are credit card institutes that issue the credit card to everyone despite a difficult financial situation or even without Credit Bureau query.

What is a prepaid credit card?

What is a prepaid credit card?

Many credit card organizations offer the option of a prepaid credit card. A credit card is issued for this purpose, which is loaded with money before use. As a rule, this credit card is issued without a prior credit check and therefore without a Credit Bureau check. Thanks to the prepaid system, a Credit Bureau check is not required; anyone can apply for a prepaid credit card without having to worry that the credit card organization will reject it.

What are the advantages of the prepaid credit card?

What are the advantages of the prepaid credit card?

The prepaid credit card keeps the debt risk low. Before the credit card can be used, it must be loaded with money, and the credit limit only remains within the amount credited. This gives the cardholder full cost control at all times, unlike normal credit cards, you don’t run into a debt trap. Monthly statements can not cause any problems, as you have to top up your credit card before using it. The modern prepaid credit card also offers clear online banking, so the cardholder has access to his credit at any time, can view debits and top up the card at any time. Many reputable prepaid credit cards even offer your customers credit interest, so the holder not only benefits from the wide range of possible uses. The deposited credit also earns a few interest.

Can I use a prepaid credit card to make cashless payments in shops and on the Internet?

Can I use a prepaid credit card to make cashless payments in shops and on the Internet?

As soon as the desired amount is credited to the credit card account, the card is ready for the next shopping tour. A prepaid credit card can be used to pay at all usual acceptance points, whether in shops or on the Internet. The prepaid credit card offers the comprehensive security of a normal credit card.

Prepaid credit card on vacation?

Prepaid credit card on vacation?

The prepaid credit card is secured twice. On the one hand, no credit card credit can be used up. On the other hand, the prepaid credit card can only be used with a PIN. Especially abroad, the use of a credit card should be used with caution. With a prepaid credit card you are always on the safe side. In the event of loss, the card will be blocked, but anyway, no one can use this card without the personal PIN, so the deposited credit is optimally protected at all times. A loss does not deceive the holiday mood either. In addition, the Preipaid credit card does not have to carry as much cash into your travel bag, the prepaid credit card also allows you to withdraw cash from ATMs abroad.

How do I get a prepaid credit card and where can I apply for one?

How do I get a prepaid credit card and where can I apply for one?

By entering the keyword in a search engine, you can directly get several offers from the credit card organizations. In the meantime, various credit card offers can also be found on the different comparison sites. A precise comparison and careful reading of the terms and conditions as well as the costs is also essential here.

You can apply for the prepaid credit card directly on the online portal of the respective credit card organization. Corresponding links are shown on the comparison pages. As a rule, it is only necessary to enter your personal details such as name, address and date of birth, because the prepaid credit card does not require a Credit Bureau query due to the prepaid process.
The card is conveniently sent by post and can be used as soon as a credit has been transferred to the card.

Caution is advised with offers that require a transfer in advance, these can be dubious and should therefore not be considered. Customers with a financially difficult background are also welcome. Being unemployed, insolvent, sick or retired does not mean that you have no credit rating. Why should people in difficult situations not be able to enjoy the many advantages of a credit card? The credit card is the safest form of payment, especially for Internet purchases, but the Internet is an important source of shopping for our fellow human beings with low incomes, since the limitless offers are often far cheaper to obtain than in the normal market. A credit card is therefore an important financial instrument for people with poorer financial backgrounds. The prepaid credit card creates trust because over-indebtedness is impossible, the monthly debits therefore do not cause sleepless nights or great uncertainty. On the way back to a normal life, the prepaid credit card is intended and important for everyone. The prepaid credit card is the credit card of our modern world, packaged in sufficient collateral and with full and clear cost control.