CHAPTER - 3 ACRONYMS RELATED TO 3.1 Introduction: The concept is an idea, general notion or abstraction. The scientific study explores real aspects, which helps to develop unique concepts to support its findings. This chapter intends to explain the concepts used in its methodology, objectives, hypotheses and questionnaire in the present research study related to credit card and its use. There are quite a few terms, with which the credit card users may be familiar, when it comes to credit cards and its operations. In this chapter the researcher has put together a glossary to understand commonly used words, phrases and acronyms in the credit card industry. 3.2 Concepts Related to the Credit Card78: 1. Account Number: It is a part of 16 digit credit card number which is embossed and encoded on the face of the credit card. First 6 digit are IIN i.e. Issuer Identification Number, previously called as BIN i.e. Bank Issuer Number. Last 1 (single) digit is Check Digit or Checksum and digits from 7th to 15th are account number of credit cardholders. 2. Acquiring Financial Institution: It is bank agency which settles merchants’ credit card transactions and transactions with the credit card issuer and associations. 3. Adjusted Balance: It is the amount due from credit cardholders for current period of its use including financial and other charges. 4. Additional Cardholder: It is an additional credit card issued to primary credit cardholders for their siblings. For its repayments primary credit cardholders are responsible. 5. Affinity Card: It is a type of credit card issued by bank in association with non- profit group like retailers, shopping centers, airlines universities to offer benefits. 6. : It is popularly known as Amex. It is a payment processor association, having network providing financial services. 7. Annual Fees: It is charged by credit card issuing bank annually for using it.

78. (a) https://www.nasdaq.com/personal-finance/credit-card-glossary.stm (b) https://www.comparecards.com/glossary (c) https://www.creditcardinsider.com/learn/glossary/ (d) https://www.canstar.com.au/credit-cards/credit-cards-glossary-of-terms/ (e) https://www.moneysupermarket.com/credit-cards/glossary/

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8. Annual Percentage Rate: It is an annual rate of charged by bank on each month’s outstanding balance due on credit card. It is also called as Fixed Rate or Fixed APR. 9. Approval Response: It is also called as Transaction Authorization. It is a code to approve transaction for payment through credit card. 10. Authentication: It is the procedure to assure the reliability of transactions. 11. Authorisation: It is the telephonic or electronic approval by credit card issuing bank when transaction exceeds than granted. 12. Authoris(ed)ation Amount: It is an actual transaction amount through credit card. 13. Authorisation Code: It is five or six digit code sent by credit card issuing bank on completion of transaction at the merchant. 14. Authorisation Date: It is a date and time stating details of authorized transaction. 15. Authrised Only: It is the amount reserved by credit card issuing bank for purchases made and actual settlement will occur within three to five days. 16. Authorised Transaction: It is a transaction authorised by credit card issuing bank. 17. (ATM): It is an electronic interactive machine that allows credit cardholders to withdraw cash or conducting credit card related transactions. 18. Automatic Payment: It is a process of direct payment for amount due on credit card out of credit cardholder bank account. 19. Average Daily Balance: It is an amount due from credit cardholder, calculated by adding each day’s balance dividing total by the total number of days in billing cycle, usually a month. 20. Balance Transfer: It is a process in which outstanding balance due on one or more credit card transfer to another credit card account. 21. Balance Transfer Fee: It is a fees charged by a bank to transfer outstanding balance due on one or more credit card to another credit card account, which may vary from 1 per cent to 5 per cent. 22. Bad Credit: It is a poor credit score or rating of credit cardholder because of late payments, cheque bouncing, skipping repayments and overusing credit card generally, a rating below 630 is described as bad credit by banks.

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23. Bank Account: It is a bank account of merchant with bank to settle credit card transactions. 24. Bank Identification Number (BIN): It is also called Issuer Identification Number (IIN). These are 6 to 8 digits to identify the credit card issuing bank. 25. : It is a plastic card issued by bank for making payment. 26. Billing Cycle: It is time gap between two billing statement, usually 28 to 31 days. 27. Billing Statement: It is a written record showing details of the credit card use. 28. Business Credit Card: It is the credit card issued by bank to corporate executives and business owners to meet with business expenses. 29. Credit Card Issuer: These are banks, financial institution and credit union or company that issue credit card. 30. Card Member: These are credit cardholders, authorized to use credit card by bank. 31. Card Member Agreement: It is written terms and conditions of issuing and using credit card. 32. Card Reader: It is an electronic machine which reads magnetic strip or code (i.e. encoded details of credit cardholders) on the credit card. 33. : It is the service of withdrawing cash from ATM of the bank using credit card, within a cash advance limit sanctioned by credit card issuing bank. 34. Cash Advance Rate: It is a fees charged by credit card issuing bank for cash advances. 35. Cash Back: It is a bonus or rewards in terms of cash refund by the credit card issuing bank to cardholder to make use of credit card at particular store or for products. 36. Chapter 11 Bankruptcy: It is a process by which credit card issuing bank withdraw all privileges on credit card and file with a federal bankruptcy for protection. 37. Chapter 7 Bankruptcy: It is a process to recover bankruptcy legally. 38. : It is a process to adjust merchant’s bank account for wrong amount or disputed transactions at Point of Sale. 39. Chargeback Period: It is a number of days taken by bank to complete chargeback. 40. Co-branded Card: It is a credit card issued by bank in association with sponsored merchandise with special privileges. 36

41. Co-signer: Co-signer is a person who signs credit card agreement along with minor to qualify to obtain credit. 42. Credit Bureau: It is an agency that collects credit information of person to determine his creditworthiness for obtaining credit on credit card. The major credit bureau are (TransUnion) Credit Information Bureau (India) Limited (2000), Experian (2006), Equifax (2010) and High Mark Credit Information Services (2005). 43. Credit Card: It is a plastic card with revolving account with credit card issuing bank to avail cash advances as a loan and to make purchases on credit. 44. Credit Card Number: It is a 16 digit number embossed and coded on credit card. 45. Credit Freeze: It is a process of security alert on credit card to prevent charges. 46. Credit History: It is a process of generating credit cardholders’ profile of his credit history to be eligible to obtain credit card from a bank. 47. Credit Life Insurance: It is a protective insurance affiliated with credit card issuing bank which repays outstanding amount on credit card on death of primary cardholders. 48. Credit Limit: It is an amount of credit available on credit card. 49. Credit Monitoring Service: It is a service provided by credit card issuing bank to monitor suspicious transactions through credit card against nominal charges. 50. Credit Rating: It is a predicted rating on the basis of demographic profile and past repayment behavior of credit cardholders to decide future debts. 51. Credit Report: It is a credit history report of credit cardholders about their on- time or late past payment behavior. 52. Credit Score: It is a three digit score calculated by credit bureaus to decide future repayment behavior of credit cardholders. 53. Debt: It is a deduction from cardholders account for credit card use repayment. 54. Debt Consolidation: It is a procedure of transferring outstanding balance on high interest bearing credit card to low interest bearing credit card. 55. : It is a credit card payment network and an association which uses Discover Network and PULSE for credit card transactions. 56. Encryption: It is a security code to transmit credit card data over internet. 57. Expired card: It is a credit card with expiry date printed on its face has passed.

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58. Finance Charges: These are fees charged by bank from credit cardholder such as balance transfer fees, other bank ATM use charges, late repayment fees, over limit use fees and cash advance fees. 59. Floor Limit: It is a minimum credit card use limit in terms of money above which authorization from credit card issuing bank is required. 60. Fraud Alert: It is also called as Credit Freeze. It is fraudulent use of credit card without permission of credit cardholders. 61. Fraudulent Transaction: A transaction through credit card which is not permitted by and\or not known to credit cardholders. 62. Fraudulent User: A person who uses credit card without the consent of credit cardholders either for cash advances or for purchases. 63. : It is a credit period (time period) allowed to the credit cardholder for making repayment without interest and other finance charges, usually 10 to 28 days. 64. Interchange: It is a fee paid by merchant to credit card payment processor for accepting and clearing credit card payments, usually it is 1 per cent to 3 per cent. 65. Interest Rate Cap: It is a maximum rate or amount of interest charged by bank to credit cardholders. 66. Index: It is a rate which is charged on short term cash advances through credit card by bank to determine variable rate of interest. 67. Introductory Rate or Introductory APR: It is a low interest rate charged by credit card issuing bank for short duration. 68. Issuer: It is a bank or financial institution that issues a credit card. 69. Magnetic Strip: It is a small magnetic strip on credit card containing credit cardholders’ details. 70. Mail or Telephonic Order Merchant and Transactions: A person who undertakes order and transactions over the mail or telephone is a merchant and it’s a transactions. 71. MasterCard: It is a global credit card payment network provides services to bank and merchants. 72. MasterCard Acquirer: A member group who enters into an agreement with MasterCard allowing cash advances on credit card for an interchange. 73. MasterCard Card: A credit card which has MasterCard symbol on its face.

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74. MasterCard Issuer: A credit card payment processor that issues card with MasterCard logo on its face and processes credit card transactions. 75. Merchant or Accepter: A merchant which accepts credit card as a payment for goods or services provided. 76. Merchant Bank: A financial institution having an agreement with merchant to clear due generated on use of credit card. 77. Minimum Payment: It is a lowest amount of credit card statement which credit cardholders required to pay. 78. Monthly Periodic Rate: It is a rate of interest applied on balance amount due on credit card. 79. Online Bill Presentation and Payment: It is a process not only to receive but also to view and pay credit card bill via computer using internet. 80. Over Limit: It is the term used when credit card users surpassed the credit limit allowed on credit card. 81. Over Limit Fees: It is the fees charged by credit card issuing bank when credit card users surpassed the credit limit allowed on credit card. 82. Per Transaction Fees: It is a fees paid by merchant to merchant bank for clearing transaction payment. 83. Personal Identification Number (PIN): It is a four or six digit number generated by credit card issuing bank and sent to credit cardholders. It is used to ATM for cash withdrawal or advance and at Point of Sale transaction. 84. Point of Sale (PoS or PoP): It is a Point of Purchase, where the merchant calculates the amount of purchases and to be payable and hence the transaction is completed. 85. Posting: It is a details of transactions made through credit card such as purchases, cash advances, payments etc. 86. Pre-approved: It is credit limit on credit card approved by credit card issuing bank. It is decided on the basis of credit history or credit score of applicant. 87. Primary Account Number (PAN): It is a number coded on face of credit card which identifies credit card issuing bank and account number of credit cardholders. 88. Prime Rate or Prime Interest Rate: It is a rate of interest which is offered by credit card issuing bank to their credit worthy credit card users.

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89. Processing Date: It is a date on which details of transactions through credit card are processed by the bank. 90. Receipt: It is printed copy issued to credit card users showing details of purchases made through credit card. It is also called as Sales Draft. 91. Recurring Billing: It is permission granted by credit card users to merchants to debit his account for recurring purchases. 92. Reference Number: It is a unique code generated to make each credit card transaction distinct. It is also used to generate credit card statement in detail. 93. Refund: It is a process to credit certain amount to credit cardholders account on account of goods return and to reverse any error in transaction through credit card. 94. Revolver: The credit card users who do not pay their credit card outstanding statement in full. They pay off the same over a period of time with interest. 95. Schumer Box: It is a table shape like a box used by all credit card issuer to give details about Interest Charges, Terms and Conditions, Late Payment Charges and Cheque Bounce Charges etc. It is very useful to applicant to compare with other credit card issuer bank and make right type of credit card . Generally, it is of 12 to 18 Point Type. 96. Scored Credit Card: The credit card issued against collateral security to applicant with low or poor credit score. 97. Service Charges: A credit card issuer charges certain amount of fees for providing specific services referred as Service Charges. 98. Settlement: A closing and finalization of particular transaction among Credit Card Issuer, Acquirer, Merchant and Payment Association. 99. Settlement Bank: It is a financial institution which processes and settles credit card transactions. 100. Standard Floor Limit: It is a limit on credit card which varies from merchant to merchant. Using credit card above this limit requires authorization from the bank. 101. Tiered Rewards: It is a reward on credit card spending (generally in tiers or slab) offered by credit card issuer. 102. Transaction: It is an activity or action between credit cardholder and merchant establishment, resulting into debit of credit card account. 103. Transaction Identifier: It is a 15 digit value which is assigned by VISA to each transaction. It is maintained by the Payment Association unless transaction amount is fully paid. 40

104. Two-Cycle Billing: It is a method of billing to compute outstanding balance of two month and apply interest and finance charges. 105. : It is a state when the credit card users unable to make repayment of credit card use. 106. Unsecured Credit Card: The credit card issued by bank without collateral security and purely on the basis of credit score and past repayment history. 107. Usury: It is a highest rate of interest which is charged by credit card issuing bank for cash advances on credit card. 108. Validation Code: It is a security code and referred as CVV, CV2 or CVV2. It is different for different association and payment processor such as;  CID - It is a Card ID or Card Identification Number or Code for Discover and American Express Credit Card, generally of four digits on face of Credit Card.  CVC2 - It is a Card Validation Code for MasterCard.  CVE - It is an Verification Code, used in Brazil for Credit Card transaction.  CVN2 - It is a Card Validation Number 2, used in China for UnionPay.  CVV2 - It is a Card Verification Code 2 for VISA the Credit . 109. Variable Interest Rate: It is a floating rate of interest charged by the credit card issuer, which depends upon the inflation rate in market. 110. Visa: It is an association to undertake financial transaction between credit card issuer and credit card users. 111. Visa Card: It is a credit card having Visa Card symbol on its face and allowing Visa Credit Card users to use with the Merchant Acquirer and for cash advances. 112. Visa Issuer: It is a credit card issuer issues Visa Credit card. 113. Visa Merchant: They are merchant establishments, which accept Visa Credit cards for all purchases. 114. Voice Authentication: An approval of credit card transaction through an interactive media like telephone, facsimile or telex communication between credit card issuer and acquirer. 115. Void Transaction: It is an action taken by credit card issuing bank after authorisation but before settlement of transaction. It does not appear in the monthly statement of credit card. 116. Void(ed): It is a credit card transaction which is recorded by the credit card issuing bank for settlement but the same transaction is yet to be finalized and settled with. 41