Introduction to virtual credit card

A virtual credit card is a credit card that every-time when one wants to make an online purchase on enters the actual credit card information and a new number is generated to facilitate the online purchase. This virtual credit card number generated will be temporary and expires immediately the online purchase is successful.

 Advantages of virtual credit card.

• One of the advantages of the virtual credit card is that the number generated is only valid for the one time online purchase and transaction. Once the online transaction and purchase are successful the it expires.
• Another advantage of virtual credit card is that one can set a limit for the particular online purchase and transaction they want to make. This advantage of the virtual credit card ensures that the merchant does not charge more for the online purchase and transaction. Therefore virtual credit cards help the one take control of their finances by ensuring that they stay within their financial budget.
• Virtual credit card has another advantage in that they are widely recognized and can be used by anyone online to make any online transactions and online purchases. Most merchants accept the virtual credit card giving the online shopper freedom. Therefore virtual credit card allows for online purchase from all over the world.
• Data safety and security is another advantage of virtual credit card in that the actual account number of the credit card is not visible to the merchant or on the online payment system. Therefore this information cannot be used by fraudster to make any other fraudulent online purchases and transactions. This makes online transactions and online purchases using the virtual credit card safe and a great advantage.
• Another advantage of the virtual credit card is that it gives the online purchaser freedom as they are not worries that their actual credit card information would be used fraudulently.
• Another advantage of using virtual credit card is that there is flexibility in the use of this virtual credit card as it can only be used when there is a need to make online purchases. Since the number generated for the virtual credit card is temporary then the online purchaser uses it only when they are ready to make any online purchases.

 Disadvantages of virtual credit card.

•  One of the disadvantages of the virtual credit card is that the transfer of funds from the online purchasers account to the merchant account takes time and at times the goods are delivered before the actual payment to the merchant is made.

• Another disadvantage of the virtual credit card is that even though the virtual credit card is widely accepted, some merchants are still skeptical and have not fully accepted the virtual credit card.

What is a Virtual Credit Card

Over the years this has been hampered by hackers who have used the system to fraud the online purchasers using the information they have obtained from the credit cards hence the introduction of the virtual credit card. A virtual credit card is a card which is a replica of the actual credit card and which a user can generate it online. This virtual credit card generated will only be used to make online purchase and not any other purchases. Like any other credit card the person must apply for this virtual credit card. All credit and lending elements will be taken into consideration by the company offering the virtual credit card.

The main characteristics of the virtual credit card which differentiate it from the physical credit card are as follows:

1. Virtual credit cards are only used for online purchases; one cannot make any other purchases using this card.
2. Virtual credit card may be a temporary card which can only be used to make this online purchase once and will not be used again as it will have expired once the transaction is successful.
3. Every-time one wants to make online purchases, then they have to enter the actual credit card information and a new number is generated for the virtual credit card which can then be used.
4. The virtual credit card does not reveal the actual account number and the account details of the actual credit card. These details are only visible to the account holder and the actual credit card provider.
5. The virtual credit card number which is generated and which can be seen is temporary and also useless and cannot be used to access the actual credit card account.
6. The virtual credit card since it generates a temporary number for a particular online purchase therefore there is no information and details of the actual credit card account. This ensures that the actual credit card is not used for fraud.

 Conclusion on virtual credit card

Since the world has become a global village, the introduction of the virtual credit card has brought a great revolution to online purchases. Curbing of fraud which had really been on the increase has also been enhanced by ensuring good data security systems while also giving the freedom to purchase online. Virtual credit card has revolutionised the concept of cards and their usage in this age.

What is a virtual terminal

A virtual terminal is a terminal that can be used for processing any credit card transactions from any computer with internet access anywhere in the world. Virtual terminal can also be referred to as an online version of what is traditionally known as Point of Sale (POS) terminals for example the ones in the supermarkets, hotels and restaurants, retail clothing outlets and many other places.

Due to the increase in use of credit cards on online shopping and in order for these outlets to be competitive, it would be very important that they acquire the virtual terminal.

Competetive advantages of acquiring a Virtual terminal

• A virtual terminal enables the merchant to reach a wider market and therefore increase their sales. The merchant is able to increase sales volume when they acquire a virtual terminal as they are able to make online transaction for a wider market.
• Acquiring a virtual terminal makes the merchant have a competitive edge over their competitors. This is because the merchants are easy to access because of the online accessibility to their customers and potential customers.
• By acquiring a virtual terminal a merchant is able to grow in business by increasing sales, reducing the costs and growth in the profits of the merchant company. the merchant becomes more efficient and effective.

 Requirements for merchants who aspire to acquire a virtual terminal

1. The merchant acquiring the virtual terminal must have the capacity to handle  online transactions. The capacity will include computers and human resource. The question that will be raised is if the merchant acquiring the virtual terminal has the ability to securely and efficiently handle a series of tasks. These tasks that the merchant acquiring the virtual terminal will be able to handle include verification of each transaction, documentation of the transaction and processing of the credit card transaction.
2. The merchant acquiring the virtual terminal must have a very efficient data security system. The system should be secure and safe for the merchant to be able to acquire the virtual terminal.
3. Virtual terminal can also be acquired by the merchant if the merchant has a good reputation financially. This is to say that the credit rating of this merchant is good so as to be able to purchase the virtual terminal.
4. A merchant can also acquire a virtual terminal if the merchant has a wide network of outlets. It would not be prudent to acquire a virtual terminal if the merchant has only  one outlet.

Credit card Debt Relief Programs

All over the world, more and more people are finding it difficult to meet their financial needs. With an increase in the number of credit card debt relief programs and companies to work with, financial problems are now being professionally addressed.

In the market today, the new federal law on credit card debt relief has been a more appealing debt management relief option in the settling of debts for the consumers. These federal laws became effective on 27th October 2010, making it possible to and easier to settle debt s for a minimal percentage charge.

 Factors you should consider when looking for credit card debt relief programs

1. The way out offered by the credit card debt relief program

Is the company offering only one debt relief solution and do they have any other solutions if incase one does not work. These include having different selections of debt relief programs that will fit your specific needs.

2. Reliability of the company offering the credit card debt relief program

How long has the company you are dealing with been in business? And is the company reliable if you will be in need of it? Is the company allied to better business bureau and can you entrust in it? These are questions that must be addressed to determine how reliable the company is.

3. Price of the credit card debt relief program services

Get information on how the debt relief company gets the money to pay salaries.  Does it rely on the amount you save with them? What will the company charge you for the services?

Efficient Tips for Saving Money to improve credit card debt relief

When it comes to debts, most people end up struggling on how to pay back their credit card debt.  The tips listed below will help you change your spending habit and make you realize you can live a simple life free from credit card debts.

Do not acquire extra debt on the credit card

• Make payments for your credit card debts on time to stop the debts accumulating increasing the interest paid. This is a tip that most people tend to ignore  and which may probably make them put their credit cards away.

Use some of your investments

• It’s a wise idea for you to use part of your savings to clear off your credit card debt than to pay your debt with accumulated interests.  Interest accumulation makes it difficult for one to make timely payments on the credit card debts.

Cancel unnecessary expenses

• All the unnecessary payments for leisure like gym membership and other expanses that renewed yearly should be cancelled. This will generate extra money to pay for your credit card debt.

Review your weekly spending

• Make a review of your expenses weekly and have a record of your purchases to know where you can reduce your expenses and make savings that can be used increase your credit card debt relief.Get a loan against your life insurance

Those with  whole life insurance policy may borrow against the value of it. You have the option of repaying the amount in installments with no interests.

Reaching Credit Card Debt Relief will depend on how focused you are. You have to organize your self and plan on how you can repay your credit card debt on time to avoid accumulation of due amounts. Better planning and being  well organized is the key  requirement to reach credit card debt relief.

Chase Bank Kenya prepaid cards

The bank is known for its relationship banking. it has scooped many banking industry in Kenya awards in past years. Chase Bank has fifteen branches in Kenya.

Chase bank launched it suite of prepaid cards on the 24th of October 2011. The bank had full page advertisements for these products in both the Nation newspaper and the standard newspaper.

Chase Bank Kenya prepaid cards that were launched are:

Zawadi Chase Bank Kenya prepaid cards

Zawadi meaning gift, is an apt description of how the cards will be sold. These cards can be given to people as gifts. They offer good gifts as the person receiving the gift of the card can purchase what they want.

 Incentive Chase Bank Kenya prepaid cards

These cards may be given as incentives to staff who have performed well in their jobs. these cards could replace the cash bonus that are given to staff at the end of each month.

Traveller Chase Bank Kenya prepaid cards

These category of prepaid cards is targeted for people who travel alot. The account holders can purchase the card either in Kenya shillings or dollar denominated cards. the cards can be used over the Internet.

Chase bank Kenya prepaid cards are MasterCard branded. chase bank is the first bank to offer the MasterCard Chase prepaid cards in Kenya. other banks that offer prepaid cards are Visa branded. These banks are Kenya commercial bank, I and M bank and Bank of Africa.

Advantages of Chase Bank Kenya prepaid cards

• one does not have to be an account holder to purchase a chase prepaid card
• the cards can be purchases on Kenya shillings or dollars
• the cards are MasterCard branded cards so have a wide acceptability
• the cash or funds are held in the card not a bank account, so the risk affects funds only held in the card not a bank account
• they can be used in many outlets both in Kenya and the rest of the world, that accept MasterCard cards

Chase Bank has joined the world in availing customers with prepaid cards. Prepaid cards have become popular especially after the economic crisis in the western world from the year 2008. Credit rating for many people especially in America was affected and so they cannot qualify for credit cards, and prepaid cards is the solution.

Chase Bank Kenya prepaid cards have been introduced into the market at the right time when the growth is expected to double in the next two years.

Types of debit cards

Proprietary debit cards

what are debit cards

Debit cards given by a bank to access just that banks accounts and are known as proprietary card. The cards are sometimes also called ATM cards since they are used just at the banks ATMs. Is the bank has merchants or outlets where they have connected their systems, then these ATM cards can be used to access those merchants. In some instances the banks come together and form a common network of ATMs especially. After membership, the proprietary cards from various banks can be used in these common outlets. Charges are agreed amongst the members.

Co-branded debit cards

When a bank works with another company and they come up with a card that would suit both the institutions members and customers, these are known as co-branded or affiliate cards. The cards may be proprietary or they may be association debit cards. Co-branding is usually done with hotels, clubs, malls and airlines. Both institutions work together to give their customers more convenience and to grow their customer base. Both institutions gain from the partnership.

Association debit cards

Banks may sign up with associations like mastercard and visa to give out their branded cards. The association debit cards are widely used globally. The networks for associations are very well networked and use modern and sophisticated technology to ensure cards so branded are acceptable and create convenience for the financial institutions and their customers. There are stringent rules and regulations for those financial institutions wanting to join associations. Joining fees, annual fees and transactions are some of the charges levied by members. The associations have rules not just for joining, but after joining there are rules of engagement between the associations and other members.

Prepaid debit cards

The prepaid debit cards are used by financial institutions to collect funds before the funds are used. Unlike many other cards, the prepaid cards are paid for before the money is used. There are many kinds of prepaid cards like: gift cards, travel cards, store cards, and payroll cards. The prepaid cards are used as a way to control funds and help in financial management.

The choice of which debit cards financial institution or potential cardholder should get depends on which card is most convenient for them.

What is a prepaid card

prepaid card

A Prepaid card is a card that mostly works like a credit card or a debit card but it has to bee preloaded with money for the cardholder to spend. The card can be used in outlets that credit and debit cards are used.

Prepaid card advantages

• A prepaid card uses money that is loaded. This means it will not lead you to get into debt. Prepaid card can help manage your finances and the amounts loaded will be what is available for use.
• It does not matter whether you have a bank account or not, the applicant can access the prepaid cards when they purchase the cards. This card may be used to reach the unbanked masses in many countries.
• The prepaid card can be given to your children or wife while they travel. The card can be reloaded online for whatever amount is required as per the guidelines of the card company.
• Prepaid cards are faster to get since there is no credit check done.
• The prepaid cards are used to improve credit rating but the cardholder or the card company must give this account to the card reference bureau.
• The cardholder is able to load just what they require especially where they are suspicious of online fraud. Once the funds are depleted, the cardholder waits for the next time when they want to shop and then they load just what they require. This card is not linked to a current or savings account, so if a card is stolen, the money in the bank account is not touched and is safe.

Prepaid card disadvantages

• The prepaid cards have many charges that eat away at the available spending amount. Some companies have hidden charges and after the card has been used at a point of sale or ATM, a charge is debited directly in the cardholders account. Ensure to understand all the costs that are associated with the prepaid card that you get
• There is no cash back guarantee like for credit cards. When a prepaid card is used online, and the goods are not delivered or are damaged, some prepaid card companies do not insist that the cardholder get their money back.
• For those customers who do not like to go online, the prepaid card is seen as a problem since the cardholder is expected to get their balance online. They may be embarrassed if the transaction fails due to lack of funds.

A  cardholder has to be aware of prepaid card advantages and disadvantages of the product they have signed up for.

Advantages and disadvantages of debit cards

Advantages of debit cards

• Use only what the cardholder has as it debits the bank current or savings account. The cardholder does not go into debt since they can only use as much as they have in the account.
• A debit card can be used in the same outlets as a credit card and acceptability is higher than for cheques. Getting debit cards is faster than credit cards and for those with bad credit ratings are not affected by getting debit cards.
• One may use the cards at numerous ATMs that have the logo of the association branding their cards in many countries.
• Goods and services can be purchased online. When goods and services are not received as per the order given, the cardholder can get a refund or cash back for the merchant.
• With a debit card, the cardholder does not have to physically visit their bank to get cash but can use the card at a merchant outlet
• When debit cards are used, the merchant gets refunded fast by their bank accounts being credited. They do not have to keep cash in their tills and so can save on security costs and bulk cash banking costing.
• It is easier for the merchants to balance their accounts since they are using reports from the Point of sale machines.
• The merchant does not have to struggle to get change, especially in small denominations when a card is used. When cash is used, the merchant must have the change in small denominations to give customers. It also takes more time to count the coins to balance the days work.

Disadvantages of debit cards

• The cards debit the accounts immediately as the transaction happens. This gives no grace period like in a cheque transaction or credit cards.
• It is harder for the customers to make their reconciliations on transactions since receipts’ are not kept by the cardholder for long. The statements for many current or savings accounts are given to customers quarterly or twice a year. For a customer to receive the e statements they have to pay a fess for the service.
• If the account has no money, the card cannot be used unlike for a credit card. If the card is allowed to overdraw the account, the charges are hefty
• when fraud is commited, the insurance in the card is less than the amounts on the credit cards

It is important for all holders of debit cards to consider both the advantages and disadvanages of debit cards.

Reasons why people get into credit card debt

credit card debt

Many people at one time or another get into credit card debt. There are many reasons why people get into credit card debt among them:  job redundancy, shopping sprees, illness in the family and unplanned spending due to peer pressure.

11 steps to get out of credit card debt

1. Consolidate thecredit card debt especially if you have more than one credit card. This makes it easier to pay off the debt.
2. Do not carry your card with you if it is to be used as an emergency card.
3. Do not continue to use the credit cards but use cash. If possible, cut up the credit cards to remove temptation. Cash is easier to monitor than when a credit card is used.
4. Pay off all the small credit card debt. This will consolidate more money to be paid off in higher amounts to credit card debts which are more.
5. Get a loan from your bank to pay off your credit card debt. It is cheaper to pay off the loan than credit card interest which is usually very high. Sometimes the credit cards companies assist the cardholder to repay the debt by rescheduling the debt. Rescheduled repayments sometimes attract less interest, but the card account has to be declared delinquent.
6. Avoid all unnecessary fees and charges levied on the credit cards. There may be fees for making late payments or paying less than the minimum required. These should be avoided since these fees and charges carry compounded interest
7. Make a payment plan for all your credit cards. When one card is fully paid, close the account. Do not use the money that was being paid to this card as extra spending funds but add it to pay off the next card.
8. The cardholder can consider getting a credit card that charges less than the card they have. This option may mean moving from one credit card Company to another to get out of credit card debit
9. One should consider getting out of credit card debit by getting a debit card. The debit card may be mapped to only one current account and no access to the savings. This helps the cardholder to save up the money in a separate bank account and this will be paid to the credit cards.
10. Make payments that are more than the minimum requirement from the card company. Avoid making just the minimum payments and reduce the interest charges.
11. Make payments the day after the statement has closed. For example, if the statement closes on the10th monthly, make payments as soon after this date as possible. This reduces the daily interest charged on the amounts that are outstanding in the account.

Though it seems like the credit card debt will never end, the cardholder with a credit card debt must exercise patience and never miss a payment.

card payment schemes

The main business carried out by card payment schemes is processing of card transactions between acquiring banks and the issuing banks. A list of the card payment schemes below, showing links to the NYSE:

MasterCard Worldwide (NYSE: MA) card payment schemes

This is a multinational company from America.  Since 2006, mastercard has been listed and publically traded, meaning anyone can invest in Mastercard shares.

Visa Inc.( NYSE: V) card payment schemes

Visa is also an American global corporate. The head quarters are in San Francisco, California. Visa is also listed in the NYSE, though this is a recent listed. Visa has operated since 1966 when it was founded.

Japan Credit Bureau (JCB) card payment schemes

This company was founded in 1961 and in 1968 it bought Osaka credit bureau. The purchase made the card get dominance over the credit card market in Japan. JCB co. Limited is its English name. JCB issues cards in twenty countries

American Express Company (NYSE: AXP), card payment schemes

AmEx is another name for American express company. This company was founded in 1850 with head quarters in New York. It forms one of the thirty components for the dow Jones industrial average. It is a global financial services firm. The AmEx charge cards, credit cards and travelers’ cheques have made this payment scheme very well known.

The company has a mascot which was adopted in 1958. This is the image of a centurion or a roman gladiator which appears on their travelers’ cheques and charge cards. AmEx has strategy to have their customers spend in large volumes which have paid off.

China unionpay card payment schemes

CUP is also referred to as Union pay, is a chiness card. It was founded in 2002 March. It is an approved card scheme by the central bank of China – people’s bank of china.  It is the only domestic bank card organization. China Union Pay acts as interbank network for China but Macau and Hong Kong. This card scheme also links ATMs for major banks and smaller banks. Funds transfer and point of sale are part of the network.

Both mastercard and Visa provide banks and financial institutions with branded payment products which are used for ATM, prepaid, credit and debit cards for customers.  Mastercard and Visa do not issue or Acquire cards so they do not extend credit or even set the fees and rates financial institution offer their customer.

China unionpay is one of the card payment schemes with potential to compete with the American Associations.