Credit cards are an invaluable tool for managing finances during times of cash crunch. Over the years, they have become an essential part of our lives, thanks to their convenient usage and simple repayment options.
Living on a cash-only lifestyle can be the best way to avoid overspending and staying out of debt. But to make big transactions like buying flight tickets or mobile phone online, having at least one credit card is almost a necessity as it makes quite convenient for you to make those transactions. Also, using this financial tool responsibly can help you to maintain a positive credit score. But how much do you know about credit cards that we keep in our wallets? This little financial tool that we all rely on has an amazing history and there are many things that most people simply are not aware of it.
Here are 7 lesser-known and fun facts about credit cards that might leave you in awe and even change your perception about it.
Each valid credit card number meets the Luhn Algorothim’s criteria. With this algorithm, if you begin from the right of the credit card number and double each 2nd number (i.e. 1111 would turn into 2121) and add all of the resulting numbers together. If the number that you come up with is divisible by ten then your credit card number is valid. And if in case, it is not divisible by ten then your credit card number is invalid.
The CARD Act of the year 2009 (i.e. Credit Card Accountability, Responsibility & Disclosure ACT) safeguards card members with regulations such as making credit card providers inform cardholders of minimum payment consequences, providing cardholders at least twenty one days to pay their outstanding bills, limiting, and in few cases, capping late payment fees & over-limit charges, and much more thing.
You might have noticed that all of your credit cards from the same credit card issuer begin with the same number. Well, it is not coincident. The 1st digit of a plastic card shows what industry has issued that card.
Number 1 & 2 shows an airline credit card; number 3 is for the entertainment and travel industry; number 4 & 5 are for banking and financial institutions; number 6 is for merchandising and financial; number 7 is for petroleum; number 8 is for telecommunications, and number 9 is for national standard bodies assignments.
Moreover, American Express credit card accounts begin with a number 3, Visa Accounts with a number 4, and Mastercard accounts with a number 5.
Credit card expiration has two key purposes. First, a physical plastic card has only validity of about 3-4 years worth of swiping & dipping. A credit card expiration date basically gives your lender a date on which to send the cardholder a new credit card before the old one gets expired. Second, the credit card expiration provides a small estimation of identity theft protection mainly for card members because it’s another information source that you’d have if you had the credit card in your possession.
The majority of the credit card providers send you a new credit card before your current plastic card’s validity finishes. If in case, they don’t for some reason and you try to utilize that card after it has been expired, your transaction will be declined. But your account will be valid. All you need to ask your lender for a new credit card.
The American Bankers Association evaluated in March of the year 2009 that there are approximately ten thousand credit card transactions happening every second globally.
The magnetic strip on credit cards lasts only for three to four years of swiping. Therefore, the plastic card gets expired because the magnetic strip wears off and it requires to be replaced after that particular period of time.
Initially, Mastercard was named as MasterCharge. But in the year 1979, its name had been changed to the famous Mastercard as we all know it today.