How do credit card companies determine their aprs?

How to Tell Which Card Number Is What Credit Company?

How do credit card companies determine their aprs?

All of the numbers on a credit card have a meaning. Packed into the 15- or 16-digit sequence of major credit cards are the credit company, the identifying bank number, your account number and security fraud codes. By identifying the credit company from the number, small business owners will know the service charge for that transaction. To find the credit company of a particular card, just look at the first two numbers.

Identify a bank card's credit company by looking at the first number. Cards that start with a "3" are American Express. Those that start with "4" are Visa credit and debit cards, those that start with "5" are MasterCard credit and debit cards, and those that start with "6" are Discover credit cards. The service fee that is charged to merchants varies between card companies.

Count the digits in the credit card number. Most credit cards should contain either 15 or 16 digits. American Express credit cards contain 15. The other three major credit companies -- Visa, Mastercard and Discover -- have a 16-digit sequence on their cards.

Look at the first number on the card again to determine the industry within which the card was issued. Along with identifying the credit company, the first number on the card serves as the major Industry Identifier, which tells you if it is a bank or gasoline card, for example. Cards that start with 1 and 2 are issued by airlines, those beginning with 3, such as American Express, are identified with travel and entertainment, numbers 4, 5 and 6 are bank cards, and those that start with 7 are issued by gasoline companies, such as ExxonMobil and Chevron.

Based in San Francisco, Beth Rifkin has been writing health- and fitness-related articles since 2005. Her bylines include "Tennis Life," "Ms. Fitness," "Triathlon Magazine," "Inside Tennis," "American Fitness" and others. She holds a Bachelor of Business Administration from Temple University.


how do credit card companies determine their aprs?

Renting a car frequently requires a credit card. At best, renting a car is more of a hassle with a debit card. Sure, I'm using their stuff, but putting a £1000 hold on my Visa Debit should work just as well as putting an equivalent hold on my credit card (except that my current account balance is almost always far larger than the credit limit on any credit card I've ever had, which have always been secured, so I don't get the risk of insufficient funds argument either).

What can a car rental agency do with a Visa Credit Card that they cannot do with a Visa Debit Card?

For booking accommodation, Visa Debit works. Why not for rental cars?

How do credit card companies determine their aprs?

A hotel can accept the debit card because each night they can withdraw the money. If you don't have sufficient funds they can instantly lock you out of your room. They an also limit your ability to access room service, and other extra expensive options.

The rental car can't do that once you have the car. Plus they never know if you will bring the car back with damages, toll charges, and an empty tank of gas.

People with credit cards tend to have better credit than those who only have debit cards. People with better credit tend to not abuse such things as car rentals. It costs money for any company to run your credit. It doesn't cost a rental company any outflow of money to reject debit cards. So the possession of a credit card becomes a stand-in for running your credit before you rent a car.

Deposit on a Debit Card have a different effect, and many people don't understand it (and make a big stink), or cannot afford it (or both). Either of it results in lots of trouble for the business:

  • Putting a deposit on a Credit Card limits the remaining spending ability on the card; if the customer doesn't max out his credit cards, it has zero effect on him.
  • Putting a deposit on a Debit Card blocks the customers money for the duration, and disallows him access to it, which for many people is significant.

In addition, having a credit card showes that some bank trusts the customer with an unsecured credit of this height, which is some reassurance for the business. A debit card proves only that he was able to get a checking account, which needs much less liquidity and stability.


How Do Credit Card Companies Calculate Minimum Monthly Payments?

Do you know how your credit card company calculates your minimum monthly payment?

In the past, most companies calculated your minimum payment as 2% of your account balance. Now, however, many companies are using a new formula.

The minimum monthly payment equals 1% of account balance plus finance charges plus fees.

Assuming an account balance of $4000 at 16% APR:

1% of $4000 is $40.

The monthly finance charge on $3960 ($4000 – $40) is

The minimum monthly payment would be $40 + $52.80 = $92.80.

Under the old 2% method, the minimum monthly payment would have been $80.00.

I have to confess, I was completely unaware of the fact that some credit card companies had changed the way that they calculate minimum monthly payments. If you are getting out of debt, take a look at a recent credit card statement or call your credit card company. Ask them how, exactly, they calculate your minimum monthly payment.

I called a couple of credit card companies (cold chill) and most of the customer service representatives had a difficult time explaining the above calculation to me. And, after searching the web, most of the information about credit card companies and minimum payments was about the old way, of charging a flat 2% (or 4%). Bank of America and Citibank, however, did confirm that they use the 1% + finance charges + fees method. Also, if you were wondering how I figured the monthly finance charge on $3960 at 16%, I simply divided 16% by 12 (months in a year) and multiplied that number by $3960.

Want a sure-fire way of never having to worry about anything your just read? Live life without the silly things and be happy!

Final thought – If you have any more information about this subject, PLEASE share it with me and my readers. If your card uses a different method, I’d like to hear about it. It’s been so long since I dealt with a credit card company, I’m kinda out-of-the-loop, so to speak. Also, there was some debate about whether you would have to pay interest on $3960, which is the account balance minus the 1% payment, or on $4000. Plugging the numbers into this calculator from Bankrate, you get $92.80, which suggests that using $3960 is appropriate. Information on this page may be out of date. Please contact your credit card companies for accurate and current information.


13 Credit Card Companies That Provide CASH Refunds to Service Members Under The SCRA

How do credit card companies determine their aprs?

Did you know many credit card companies are going above and beyond their legal obligations under the Service Members Civil Relief Act?

Many companies are retroactively lowering interest rates for balances placed AFTER your enlistment! Under the SCRA, 6 percent is the maximum interest rate that can, however, in 2016 many institutions are choosing to use even lower rates.

Considering my current circumstances, this is fantastic news.

For the two or three people who truly know me, I’m always looking for a way to save a few bucks. Since January of 2015, I’ve been a geographical bachelor living in Houston, while my family maintains a residence in San Antonio.

I reside on the North side of the city, well outside of the Beltway. I opted for comfort and security, and some would say I’m paying a premium for rent. Between my house and apartment, we currently pay close to 3k a month for the most basic living expenses. I live off of a credit card and typically pay the balance in full (or close to it) before the end of the billing cycle.

Currently, my go-to credit card is the Hilton Honors Card from American Express. I swipe this card to cover all of my day-to-day living expense while simultaneously earning rewards points.

This card comes with a hefty 15.49 annual percentage rate (APR).

How do credit card companies determine their aprs?

Following Spencer’s guidance, I’ve submitted my request to have my account handled in accordance with the SCRA.

Armed with this new information, I conducted a brief Internet search, searching for a list of credit card companies that also provide similar support under the SCRA.

To my surprise, I failed to locate a substantial resource to share, so I decided to create one.

Many credit card companies are heeding the call and retroactively lowering interest rates, reducing the interest on balances placed AFTER enlistment, and cutting refund checks.

Now I understand that for many of us, the promise of 0% APR and having our annual fees waived may sound like an April fools post on the Duffel Blog.

But I’ve been able to locate 13 credit card companies, which have been secretly offering SCRA benefits to service members and in some cases their spouses.

Here’s a List of 13 Credit Card Companies that Go Above and Beyond To Support Service Members Under the SCRA:

How do credit card companies determine their aprs?

Benefits: USAA has three unique programs designed to put money back into service members pockets:

  • SCRA: USAA provides service members a reduced interest rate of 4%, for credit card debt incurred prior to active duty. This is good for up to six months after separation
  • Deployment of PCS: Active duty members can get a 4% interest rate, and some fees waived on their USAA MasterCard, Visa or American Express for current balances, new purchases, and cash advances for up to 12 months for PCS or up to 15 months for deployment.
  • Campaign Medal: USAA members awarded a qualifying campaign medal can get all the interest incurred during the campaign refunded on their USAA MasterCard, USAA Visa or USAA American Express.

How to apply: Find out if you qualify online and send in the required documents. Call 210-531-USAA (8722) for more information.

How do credit card companies determine their aprs?

From great rewards to low-interest rates, they've got you covered.

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