The Secret of Credit Card Numbers

Have you ever really looked at your credit card and tried to figure out what that huge string of numbers really means? Do these card issuers have so many customers that your account number has to be 16 digits long?

You may be surprised to know that all those numbers you see actually do stand for something, and it's not just who YOU are. Let's take a look.

Most of the major credit card companies operate on the same system when choosing a credit card number. Other cards like gas cards, department store cards and phone cards go their own way. Let's concentrate on the ones that all play by the same rules.

The very first digit in the series will be a 3,4,5, 0r 6. This number designates the type of card as follows:

3 = a Travel & Entertainment Card like American Express or Diners Club.

4 = Visa and Visa-branded debit cards, cash cards, etc.

5 = MasterCard and MasterCard-branded debit cards, cash cards, etc.

6 = Discover

American Express and Diners Club use the second digit to identify the company. That means that Diners Club cards will start with either "36" or "38", and American Express cards will use either "34" or "37".

The remaining numbers in the series are used for different purposes depending upon the card type and issuer.

In most cases, the next group after the opening series of numbers represents the routing number of the card-issuing bank, the group after that is the user's account number, and the final digit is a check digit. The check digit is a number that is calculated by applying a special formula to all of the other numbers. The check digit is the result of that formula and is used as an anti-fraud check.

To keep things from getting too confusing, look at your card as you follow along for the next steps.

American Express

The American Express Card uses digits three and four for type (business or personal) and the currency of the cardholder's country of origin. The next digits from the fifth through the eleventh are account numbers. Digits twelve through fourteen indicate the card number within the account and the last digit is the check digit.

Visa

With Visa, digits two through six represent the bank number. Beginning with the seventh digit and running through the twelfth or the fifteenth represents the account number and the last number is the check digit. Since all Visa cards do not have the same amount of numbers in the sequence, the number of digits in a group may vary.

MasterCard

For MasterCard, the second digit, through to anywhere between the third and the sixth digit is the bank number. All remaining digits, except the check digit at the end of the series, identifies that cardholder's account.

Now that we've gone over it all, you're probably wondering why you were ever wondering in the first place. Just remember though, knowledge is power. Some things are just fun to know.

About the author:
Gordon Goh is the owner of Easy-Credit-Card-Guide.com offering free credit card information for everyone. You can receive a free credit card at http://www.easy-credt-card-guide.com

Alternatives to Credit Cards!

Are you one of those people who only ever got a credit card for the convenience of being able to pay without cash, or because you weren’t aware of any other easy way to borrow money? Millions of us are, thanks to the unavoidable advertising of the credit card industry, and few people realise just how many alternatives to credit cards there are. Let’s take a look at a few.

Debit Cards.

Debit cards are often used in many European countries, but are relatively unheard of elsewhere. Basically, they’re just like credit cards and are accepted everywhere credit cards are accepted - the only difference is that they take any money you spend directly from your bank account, instead of you getting a bill at the end of the month. You should be aware,though, that you aren’t as well-protected from fraud with a debit card as you would be with a credit card.

Pre-Paid Credit Cards.

These are cards that work just like credit cards, except that you can’t have a negative balance - you have to put money on the card before you can spend it. That means that you ‘top-up’ the card, like you would a mobile phone. This is good if you want to know how much you’re spending, not to mention that you can even give the cards to children. They’re also safer than debit cards, since someone who stole the card could only spend whatever money was on it at the time.

Bank Overdrafts.

A good bank overdraft, used together with a credit card, can be a far better way of borrowing money than using a credit card. Your overdraft limit is set by the bank according to how much you gets paid into your account each month, and you don’t need to pay it off until you want to. Basically, it just gives your account the facility to go into minus numbers, if you want it to. Many banks charge relatively high interest rates for overdrafts, but rarely as high as a credit card - and they will give much better rates for good customers.

Real Loans.

When you’re buying one big thing at a fixed price (like a car), or you’re going to spend all the money on one type of thing (home improvements, for example), it’s worth budgeting it all out and going to a bank or another loan company. They’ll be able to lend you the money at a much better rate than a credit card would, simply because they know why you’re taking the loan and can set regular monthly payments for you to repay it.

Credit Unions.

Credit unions are like banks, only more local. They are co-operative, owned by their members and run by the community, and are a great place to borrow money. This is because there are limits in law on how much interest credit unions can charge, and they don’t need to make a profit for owners or shareholders, because they don’t have any. It’s well worth checking if there’s one in your area.

About the author:
Gordon Goh is the owner of www.Easy-Credit-Card-Guide.comoffering free credit card information for everyone. You can receive a free credit card at http://www.easy-credt-card-guide.comand free Credt Debt Repair Guide at http://credit-debt-repair.cogia.net

Improtant Links For Credit Card Utilities..

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Why an overdraft loan is better than installment loan

Credit Card - 70 Years Of Service..

Credit - and by association the credit card - has become a cornerstone of the American way of life. Each American household is estimated to have among them at least 10 credit cards, not counting charge cards or house cards, and carries an average of $13,000 in credit card debt. This is however not a recent phenomenon.
It was only inevitable that Americans would invent the credit card. Americans have always been comfortable about using credit. The Europeans who started colonizing America in the 1600s came from countries that had put aside old prejudices about borrowing and lending, and the new attitudes toward credit were transplanted on North American soil.
Americans have also always needed credit: borrowing to buy land, to establish a business, to travel west in pursuit of valuable animal furs or in search of precious metals. Others went into debt in order to get to America in the first place — as the colonies’ indentured servants did — or stumbled into debt, and were released by royal decree to join English general James Oglethorpe in establishing the colony of Georgia.
By 1800 the United States was an independent nation, with debt being a way of life for many of its citizens. New York City pawnbrokers gave out loans against 149,000 separate pieces of collateral in 1828 — versus a population of only around 200,000. In rural areas, people bought horses, carriages, plows, seeds, clocks and household furniture on credit. Many promised to pay in full at harvest time; others relied on open-book credit.
Open-book credit was used to purchase inexpensive necessities of life such as food and clothing. A shopkeeper allowed customers to take home the goods they needed, and to pay what they could afford to, paying in part but not all of their balance each month — much like many credit card owners do today. Yet very few fell into drowning debt. Both credit card debt and open-book credit are classified as revolving credit.
Early 19th century merchants also offered a non-revolving type of credit, the installment plan. These plans were limited to well-to-do customers who purchased expensive items like a piano or a carpet. By the turn of the century, installment buying was no longer limited to the rich, and even working class families could purchase “discretionary” goods on installment. It got so that installment buying became associated with the needy. A further refinement on installment plans came early in the 20th century with the introduction of the department store house card or the charge card.
The charge card was first offered, like installment plans had originally been, to buyers of luxury goods. Up market stores provided the house card to their prized customers, which naturally made them very happy. The house card was convenient: they didn’t have to carry large amounts of cash or undergo the identification hassle if they paid by check. The customer merely presented the house card to a clerk for recording of the sale, and received a bill once a month for thirty days’ worth of purchases. The customer settled the bill in full each month. The store charged nothing for the service, but gained customer loyalty. This charge card made it easy for the store to keep track of sales, but, the biggest advantage was that the charge card increased sales per customer.
The history of credit took a big turn with a new development: growing automobile sales.
Autos were necessary but expensive to buy as a single purchase. Everyone needed the auto, and everyone was forced to buy cars with credit. Installment buying for automobiles gave respectability to buying on credit.
The other significance of automobiles on credit was that they allowed people to go long distances in a short time, to places where they were total strangers. And what if the car broke down? That was common with the early autos. Drivers could wind up far from home, in need of costly repairs, and without enough cash to pay for them.
To solve that problem, oil companies came out with their own type of credit card. This credit card could be used to buy oil, gas, and mechanical service. Unlike the department store charge card or house card, the oil company credit card could be used everywhere around the country.
Thus, by the 1920s the essentials of the modern credit card were at hand:• Oil companies showed the charge cards could be used nationwide• Automobile buying needs showed buying on time was respectable• Americans had felt comfortable with credit for centuries.
It took another thirty years before the credit card as we know it was invented. Three men finally accomplished this over lunch in a New York City restaurant in 1949.
They were convinced that there was money to be made in consumer credit, and tried to find a way to tap it. The charge card or house card boosted sales and customer loyalty, but without interest, the charge accounts by themselves did not generate revenue. Installment sales did produce interest, but that was meant to cover the seller’s costs, and not to earn income.
Suppose, the three wondered, that a third party inserted itself between buyers and sellers. Suppose this third party promised the sellers many customers, those who would not have gone to them otherwise. Suppose the same party offered affluent people with good credit records a diverse choice of establishments (not just one department store or a chain of gas stations) where they could charge what they bought, no questions asked. Wouldn’t these well-heeled spenders be more inclined to patronize those establishments where they had credit? Wouldn’t business owners, seeing their sales increase and their profits soar, be willing to return a small percentage to the third party that helped provide them with the new customer base? Wouldn’t those small percentages add up to a small fortune?
They sounded out the restaurant owner, asking how much credit card business that went his way would be worth. The owner replied, “Seven percent.” And, Diners Club was in business.
The early Diners Club credit card looked like miniature books. The owner’s name was on the front of the credit card booklet; inside were the names of establishments that had agreed to accept the credit card. Owners didn’t pay any interest or annual fees, but they paid off their entire credit card bill every month.
By 1951, Diners Club had gone international and shown its first credit card related profit. Four years later, the familiar plastic credit card replaced the original paper credit card. In 1950, Diners Club had begun charging an annual $3 fee and had a selection of 300 businesses for over 35,000 credit card holders. By the mid-1960s, restaurants, hotels, airlines, retail shops and the like were happy to accept the Diners Club credit card. The founders’ dream of a universal credit card, used for various purchases all over the world, was being realized.
Diners Club had its imitators. In 1958, American Express issued its own credit card and the Hilton Hotel chain introduced Carte Blanch. All three were known as travel and entertainment credit cards, distinguishing them from another type of credit card, the bankcard.
Seeing Diners Club’s success, banks entered the credit card market during the early 1950s, and by 1955 over one hundred US banks offered credit cards to their customers. They were slowly making money, but they had no national credit card distribution because the law restricted interstate banking. In 1958, the largest US credit card operation belonged to Bank of America, but its BankAmericard could be used only in California.
To expand the newly fledged credit card’s geographical usefulness, Bank of America pioneered the national interchange that would enable all banks all over the country to offer BankAmericard. This credit card association later metamorphosed into Visa.
This move solved the credit card distribution problem. It also prompted large banks in the east to form a rival national credit card network, Interbank Card Association which became Master Charge, and later, MasterCard. Despite initial resistance from department stores, and other house card and charge card issuers, the two credit card associations eventually signed them up in the 1980s. The credit card industry had come of age.
Today, it is a rare business that does not display the Visa and MasterCard logos, along with those of the other credit card companies.