CHAPTER - 3 ACRONYMS RELATED TO CREDIT CARD 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. American Express: 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/ 34 8. Annual Percentage Rate: It is an annual rate of interest 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 credit limit 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. Automated Teller Machine (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. 35 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. Bankcard: 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. Cash Advance: 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. Chargeback: 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 loan 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. Discover Card: 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. 37 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. Grace Period: 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.