What Does My Credit Card Numbers Mean

What is a
Credit Card?

A credit card is a plastic card that enables an
individual to purchase goods, products or services by way of a credit line. The
available credit and the card itself are offered by a financial institution,
such as a bank or credit card company.

These institutions will offer an
individual (with a satisfactory credit score) a credit card that is accompanied
by various terms and interest rates. The interest rates are based off the
individual’s credit score. Those with higher scores, meaning they are more
likely to meet the terms and repayment schedules in the agreement, will be
awarded with a lower interest rate and vice versa.

Credit Card Numbers

Credit card numbers are found on the front of the
credit card. These numbers represent the account number of the individual’s
line of credit. Credit card numbers are processed during a transaction, when
the buyer swipes his or her card through a reading machine (the seller can also
process the transaction by copying the credit card numbers and manually
relaying the information).

The credit card numbers are then passed through an
interchange where a merchant will look up the individual’s credit account. As a
result, the credit card numbers act as the primary indicator to look up an
individual’s credit line. When processed, the credit card numbers will reveal
if the prospective buyer has enough available credit to make the purchase.

Credit card numbers possess an internal structure
and share a common number scheme. Credit card numbers are types of ISO/IEC 7812
bank numbers. They are typically 16 digits in length and consist of a
single-digit Major Industry Identifier. In addition to these codes, credit card
numbers also contain a variable length individual account identifier and a
single check digit that is calculated using an advanced algorithm.

The first digit of a credit card number is the
Major Industry Identifier. This number represents the category of entity which
issued the card. Different majority industry identifiers represent the
following issuer categories:

0-ISO/TC 68 and various future assignments

1-Signifies an Airline Company

2-Future industry assignments and Airline
companies

3-Travel and entertainment or banking/financial
companies

4-Banking and financial

5-Banking and financial companies

6-Merchandising and banking or financial companies

7-Petroleum and other future industry companies

8-Telecommunications, healthcare and other future
industry assignments

9-National assignment

How to Protect your Credit Card Numbers

Through the advent of the Internet and online
purchasing, the likelihood of fraud and other criminal activity generated from
the unauthorized obtainment of credit card numbers has, unfortunately, risen.
It is the responsibility of each cardholder to ensure that his or her credit
card numbers are kept private and protected.

The first step to protecting your credit card numbers
is signing the back of your credit card. This step, although simple, is an
authentication process that may prevent an individual from using your card. The
signature acts as a security check.

When the card is used for purchases the
individual must sign the receipt to affirm the transaction. A responsible
seller will check the signature on the receipt with the back of the credit card
to ensure that the individual purchasing the goods is indeed the cardholder.

Never leave your credit card unattended. An
individual may purchase items (primarily online) solely by entering credit card
numbers, the CV2 code found on the back of the card and the expiration date of
the card.

When purchasing items online, make sure the
website you are using is secure. Those websites that are not secure may record
or even share your credit card numbers with third parties. Furthermore, never
respond to unsolicited e-mails that ask for your credit card numbers.

If you lose or have your card stolen, you must
immediately report the incident to your issuing financial institution.

Getting A Good Credit Score

A credit score is a three digit number that symbolizes a consumer’s ability to repay or satisfy loan/credit payments. The credit score is the figure used by lenders to gauge a consumer or prospective borrower’s risk.

An individual’s credit score is calculated based on their credit history, amount of available credit, amount of hard inquiries (consumer’s attempts to open lines of credit), the types of accounts open and a debt to credit ratio.

A consumer who satisfies their loan agreements (pays bills on time and has a low debt to credit ratio) will have higher credit scores than those consumers who are habitually late with their payments, have high debt to credit ratios or have a history of defaults.

A credit score is the fundamental calculation used by a lender (bank, Credit Card Company, Mortgage Company, auto seller etc.) to gauge a consumer’s ability and willingness to repay their loans. As a result, an individual’s credit score will serve as the qualifying test to secure a line of credit; a lender will not offer financing to an individual with a poor credit score, or will do so with unfavorable variables (interest rates, repayment timeframe etc.) attached.

In the United States, average credit score is 678. This figure is derived from the three credit reporting agencies (Experian, TransUnion and Equifax) in the country. To calculate a credit score, these agencies will take payment reports—sent by lenders—to elucidate a consumer’s specific repayment plan. The table below will list credit scores and the generic characteristics attached to each:

A Credit Score Above 800 is an excellent score; these individual will qualify for the interest rate and loan terms

A Credit Score between 730-799 suggests solid credit management; the individual will likely be approved of loans or lines of credit with favorable interest rates

A Credit Score between 680-729 is regarded as a good credit score; these individuals will qualify for most loans/lines of credit with good interest rates.

A Credit Score between 620-679 is regarded as an average credit score; these individuals may qualify for loans or lines of credit, but the interest attached will be high

A Credit Score between 500-619 is considered a bad credit score; these individuals will have a tough time securing a loan or line of credit. If credit is extended, the terms attached will be unfavorable.

A Credit Score below 499 represents severe risk; these individuals will be rejected for lines of credit or loans—if accepted the attached interest rates will be exorbitant.

The Future of Credit Cards

If you have recently traveled abroad, specifically to Europe, you may have noticed a new kind of credit card terminal at checkout counters. These innovations combine the traditional magnetic strip reader with two sensors: a pad for “tap and go payments” and a slot for cards with uncovered EMV chips.

Since the early 90’s EMV (acronym is derived from the trio (Visa, MasterCard and EuroPay) of processing networks that vaulted the technology’s development) has transformed into the global standard for the majority of credit card and debit card transactions—the United States remains the chief holdout.

The traditional credit card used in the United States utilizes a magnetic strip on the back that contains an encoded version of the cardholder’s account number. The cards are read by swiping the magnetic strip through a reader. By contrast, the EMV technology reads the information from the card’s micro-chip, which is embedded inside of the card. Instead of raw account numbers, the microchip provides validation codes.

With EMV standards, it is not necessary to physically swipe the card; instead, the purchaser will simply tap or wave their card near a payment pad. The payment pad will then transmit a radio signal that activates the chip.

Merchant Services Lawyer

Merchant Services Lawyer

The need for merchant services lawyers has increased dramatically with the growth of consumer credit cards and ecommerce arrangements. Merchant services process payments made to the merchant and facilitate the payment of the merchant. In serving as the medium between the parties, fraud by the merchant services processing payment can cause significant damages to the merchant, both in terms of reputation as well as operating costs. In the event of extraordinarily high service fees or withholding of payments to the merchant, merchant services lawyers can assist merchants in seeking damages against fraudulent or exploitive merchant services companies.

In what ways can merchant services companies defraud clients?

If the merchant services company begins to charge nonconsensual fees or misuses your personal information, you will be able to recover those fees as damages. The worst merchant services companies involve other third parties that charge their own fees. Small businesses that have developed relationships with merchant services companies to accept credit cards at their establishment, only to be defrauded through breach of contract can use the merchant service lawyer to force the merchant services to cancel its fees and repay the client the money withdrawn through misuse of personal information or exploitive billing. Misuse of personal information can be as severe as forging the signature of clients or taking money from the client’s bank account without notice. These violations may include a criminal component, if the merchant services company can be brought into an American courtroom. Application fraud is the use of personal information to open up an account. Some fraudulent merchant services will also do this for the purposes of billing, usually without the knowledge of the client.

Preparing to meet with the lawyer

When meeting with a merchant services lawyer, bring all agreements, electronic or otherwise, made with the merchant service companies. Breach of these agreements is the easiest way to win damages against these companies. These breaches may include raising fees above the agreement threshold without proper notice, processing payments slowly or failing to pay the business the money owed to them in its entirety.

What are issues that the merchant services lawyer may have to deal with?

Many of the most exploitive merchant services are located offshore, beyond the reach of US jurisdiction and regulations. As a result, the merchant services lawyer may have a difficult time of finding whom to file damages against and brining the violators to court. In these cases, the lawyer may file a petition with the Federal Trade Commission to take action against the violator and prevent them from doing further business in the United States. The merchant services lawyer is your best chance at understanding your legal options in the event of merchant services fraud.

What are indications of fraud?

Fraud is usually easy to detect as long as the client constantly checks statements and billing from the merchant services company. Be aware of confusing or vague fees and account for all of the money owned by the merchant services. In case of discrepancies, contact the merchant services for resolution and failing that, contact a merchant services lawyer to files suit.

Couple Arrested For Trafficking Credit Cards

In Tarpon Spring, Florida a Port Richey couple has been accused of stealing approximately 8,000 credit card numbers. Jail records show 30-year-old Angel Toland and 23-year-old Gary Blair were being detained Thursday at Pinellas County Jail on $5,000 bonds—it is not known if either will hire an attorney for their credit card trafficking charges.

A sheriff’s office report claims the pair attempted to sell undercover officers the credit card numbers and personal information of approximately 200 people for $1,500. Subsequent investigations revleaed the couple had roughly 8,000 credit card numbers—the information was secured on lead sheets from a telemarketing agency.

Detectives say the suspects may have stolen the paperwork when they helped the company with an office move; once the investigation concludes, the lead sheets will be destroyed.

The Return of Layaway: The Old/New Competition for Credit Cards

Layaway, a payment plan established by some retailers which allows purchasers to put items aside until they are fully paid off, is making a comeback from many larger retailers, especially for the holiday season.

Layaway was a popular method before credit cards became easily obtainable and commonplace. Now consumers, armed with the knowledge of the dangers of credit cards, can practice financial discipline with the help of retailers such as WalMart, Toys R Us, and Sears, which have all put layaway payment programs in place.

While the practice of layaway does have costs for the retailer, as they must keep track of payments and hold the items within the store until they are paid off, a small fee is charged in order to make up for any losses. Likewise, consumers may cancel their payments, however they will be subject to fees.

Store Specific Credit Cards: Targeting Youthful Holders

Many of us have become familiar with the all too common “help” of a retail store employee informing us that we can save 15% on our purchase if we sign up with the store’s credit card. However, while they may provide savings, many find that the percentage they save now may come at the expense of damaged credit and inflated rates later.

Store credit cards are very similar to standard issued Visa or Discover cards, except that they are often attached with special offers and the promises of future discounts and rewards. However, they also come with the same risks, as interest rates are often very large and spending limits tempting.

Younger consumers, who may not understand the implications of credit card debt, are at risk of damaging their credit and becoming indebted for purchases that seem like a bargain. Most, if not all financial experts, advise that younger consumers should stay away from such credit cards and focus on building their credit in much less riskier methods.

Credit Card Act

CREDIT CARD ACT TEXT

What are new credit card rules?

The Credit Card Act of 2009 provided much needed reform to consumer credit cards which had subjected cardholders to unreasonable fees, soaring interest rates and arbitrary rules. These rules took effect on February 22, 2010.

Reforms to rates, terms and fees

Minimum payments – credit card companies must display on their bill how long it will take for the consumer to pay off the balance is only the minimum payment is made every month. Whenever the consumer pays more than the minimum balance, the leftover amount will go towards paying the next balance with the highest interest.

Billing cycles – credit card companies may no longer charge retroactive fees for the previous billing cycle if there is not a valid reason such as disputed purchases or payments for insufficient funds.

Due dates – the new credit card rules dictate that the due date for monthly payments must be consistent every month and if the date falls on a holiday or weekend, the payment is due on the next business day, without penalty.

Change of Address – a credit card company changes its mailing address which in turn, leads to delays in processing cardholder’s payments, the card company may not charge late fees for sixty days after the change.

Interest rates – the new credit card rules ban retroactive interest rate hikes, with some exceptions.

– An expressed introductory period ends; the law now requires this period to be at least six months.

– The interest rate is variable.

– The cardholder fails to comply with a debt consolidation plan.

– The cardholder misses a payment for 60 days, even then, the rate must return to normal after the cardholder makes six months of on-time payments.

– A military service member leaves active duty which no longer entitles the cardholder to a government mandated cap of 6% APR.

Most importantly, a credit card company cannot raise rates if the cardholder fails to pay balances on other accounts such as utilities or other credit cards.

“Over-limit fees” – usually a credit card is declined when it exceeds its limit. Over-limit fees cover the balance, often with substantial fees. The new credit card law lets consumers opt out of over-limit fees and ensures it can only be charged once per billing cycle. The law also requires those than opt into the fees understand the amount to be charged and retain the right to opt out at any time.

Paying balances – the credit card company is now required by law to not charge additional fees for any methods of payment, unless it is an expedited service to avoid late fees. Statements must now be mailed to the cardholder at least 21 days in advance. Fees may not be applied until 21 days after any declared “grace period” has ended.

Subprime cards

Subprime cards have been known as “fee harvesters” as the holders typically incur several unforeseen fees which especially victimize individuals with poor credit worthiness. Credit card companies can no longer charge upfront fees that exceed 25% of the credit limit.

Reforms to gift cards

The new credit card laws also contain provisions for gift and prepaid cards as well as gift certificates. Unless the issuer specifically discloses it, these items cannot expire within five years. Dormancy, inactivity and service fees are all expressly banned unless it is expressly disclosed and the inactivity exceeds one year. In this case, only one fee may occur per month.

Youth credit reform

Issuing credit cards to persons under 21 is now banned unless there is an adult co-signer. Alternatively, they may show proof that they have the means to pay back the balance. Credit card companies may no longer solicit persons under 21 with prescreened credit card offers.

Colleges and universities must disclose all marketing and promotional relationships with credit card companies including contracts that disclose student and alumni information to credit card companies. These disclosures are subject to inspection by the federal government.

The new credit card laws mandate that credit and debt management courses become part of new student orientation at colleges. Free offers may not accompany credit card promotions at or near (within 1,000 feet of) college campuses. Colleges and universities are now required to limit the number and locations of credit card marketing events.

Disclosures

The new credit cards laws ensure that all fees, penalties and terms are disclosed and that there is at least 45 days notice of changes to credit card agreements. They must also inform the cardholder of how long it will take to pay off their balance when making only the minimum monthly payment. The Federal Reserve must collect electronic copies of all credit card agreements for public record. The Federal Reserve also issues guidelines for card issuers to set up toll-free credit counseling and debt management assistance.

Credit reports

Consumers are entitled to one free credit report a year at AnnualCreditReport.com. Other companies that offer free credit reports must disclose both visually and audibly that their credit report is not the “free one” provided by federal law.

Opting out

The right of consumers to opt out of significant change to their account is affirmed by the new credit card law and prevents opting out to be at the discretion of the card company. Card companies that have account holder close accounts due to radical changes may collect the remaining balance over the next five years, charge a minimum payment amount that is up to twice the percentage charged before the change in terms or hold the former account holder to the same terms of the original agreement.

Consumers cannot be punished for opting out of rate increases. However, consumers are not allowed to opt out of minimum balance increases. Consumers who are more than 60 days late on payments are also not allowed to opt out of rate increases

Credit Reporting Agencies

What are Credit Reporting Agencies?

Credit reporting agencies are companies that collect information about a person’s ability to handle credit. They can then sell that information to certain other businesses that can use the information to evaluate applications for insurance, employment, credit, or other allowed purposes.

These credit reporting agencies have sounds agreements with government agencies that allow them to receive and combine credit information from creditors who optionally provide the information. This combined information is then sold, sometimes by smaller reporting agencies to the consumer. This is most often done in the form of a credit report, which helps determine through a credit score the creditworthiness of an individual.

A credit reporting agency issues credit reports that describe just how an individual manages any debts they may have and how they manage them. It can also discuss payments made and how much available credit they have they is not used and whether the individual has applied for loans.

Credit reporting agencies can collect information about:

• Public record information (for example, bankruptcy or judgments)

• Inquiries about credit record as well as names and companies who have inquired

• Information on credit accounts, such as date opened, balance, account status, payment patterns, most recently activity of the account.

Credit reporting agencies do not collection information about:

• Personal background or lifestyle

• Racial or religious information

• Medical history

• Political preference

• Criminal record

There are three major credit reporting agencies in the U.S.:

• Experian

• Equifax Credit

• TransUnion

Under the Fair Credit Reporting Act, a federal act passed in 1970, a new amendment from 2003 states that all consumers can order a free copy of their credit report from each of these credit reporting agencies once a year. These credit reports can be ordered by mail, through the phone, or online. While it is possible to order all three credit reports from each credit reporting agency at once, it is also possible to order them separately.

By federal law, credit reporting agencies can only report information for a certain amount of years. For example, bankruptcies can be reported by credit reporting agencies for up to 10 years while other negative information can be reported for up to 7 years. However, negative information can be considered indefinitely when applying to a job paying more than $75,000, a life insurance policy worth at least $150,000, or any lines of credit for at least $150,000.

An individual can also request more information be reported by credit reporting agencies. For example, creditors sometimes do not file information to credit reporting agencies. This can be changed by asking the agency to add the information.

Furthermore, if there are any errors in the credit report, an individual can report the problem to the credit reporting agencies. They will then have to investigate the error and give a response to the individual within 30 days.

Caution: Keep Your Eye On Your Credit Rating

What is a
Credit Rating?

A credit rating is a statistical analysis of an
individual’s credit history. The credit rating is delivered as a number based
on the individuals debt vs. credit amount.

This number is used by numerous
lenders (organizations that distribute loans or credit card companies) to
determine whether or not they will issue an individual or business a line of
credit. In essence, the credit rating is the fundamental statistic used to
evaluate an individual or entity’s credit-worthiness.

There are three agencies that will issue a credit
rating: TransUnion, Experian and Equifax. The majority of lenders will evaluate
the credit rating of two of the three agencies. The credit rating is
distributed in a report, which will detail the prospective borrower’s credit
history.

The formula used to determine a credit rating is
known as FICO. Named after the Fair Isaac Credit Organization (the first
company to use credit ratings), this formula will yield a number ranging from
300 to 900 (the three rating agencies will have different scales.) The lower
the credit rating, the greater the risk of default.

An
individual with a score that is below 500 is viewed as a risky borrower to most
lenders. The risk in this sense is tied into the borrower’s ability to repay
the loan or pay off his or her credit card. The credit rating, thus, acts as a
gauge to determine a risk of default. Ratings closer to 300 are viewed as
extremely risky, while those above 800 are viewed as possessing limited to no
risk.

The FICO Calculation used for Credit Ratings

The FICO score is calculated based on the
percentage of an individual’s total credit that is currently being utilized,
the amount of time an individual has had an open line of credit, the types of
credit lines the individual possesses, the amount of past lines of credit the
individual has had, and the number of delinquent payments the individual has on
his or her record.

Each variable in the FICO calculation contains the
following percentage weight to determine one’s credit rating: Amount of credit
currently utilized (30%), the period of time the lines of credit have been open
(15%), the types of credit lines open (10%), the size of past lines of credit
(10%), and the number of delinquent payments (35%).

In a general sense, a credit rating around 500 is
viewed as high risk. This score will generally yield a refusal to lend. If an
individual obtains a credit line with a credit rating around 500, they will be
given a line of credit with higher interest rates, increased fees and
complicated terms.

In contrast,
a credit rating of 800 or above will grant an individual the lowest possible
interest rates, small down payments (where applicable) and limited fees. A credit
rating of around 650 is viewed as safe enough to receive favorable terms. This
score will typically be good enough to receive a new line of credit.

How do I view my Credit Rating?

The majority of organizations offer online access
to your credit rating. These websites will offer reports from the leading
credit agencies and detail why your score may be low. Given the importance of
favorable terms and interest rates, it is recommended that you view your credit
rating to ensure that no mistakes have been made.

Oftentimes an individual’s credit
rating will be lowered because of a forgotten debt or miscalculated payment. In
order to raise one’s credit rating, they must realize the position they are in.
As a result of this, paying a small fee to view your credit rating is well
worth it.

Credit Card

Easy Overview of the Credit Bureau

Credit Card Calculator

What Does My Credit Card Numbers Mean

Getting A Good Credit Score

The Future of Credit Cards

Merchant Services Lawyer

Couple Arrested For Trafficking Credit Cards

The Return of Layaway: The Old/New Competition for Credit Cards

Store Specific Credit Cards: Targeting Youthful Holders

Credit Card Act

Credit Reporting Agencies

Caution: Keep Your Eye On Your Credit Rating

Ways for Credit Card Debt Relief

The Importance of Credit Card Consolidation

The Secret Behind Credit Card Companies

Credit Card Calculator

Easy Overview of the Credit Bureau

Understanding APR In A Glance

A Guide to Student Credit Cards

A Guide to Understanding Prepaid Credit Cards

A Guide to Low Interest Credit Cards

A Guide to Interest Free Credit Cards

A Guide to Instant Approval Credit Cards

A Comprehensive Guide to Credit Cards for Fair Credit

5 Facts You Must Know About Credit Cards for Bad Credit