Banks earn in two ways, firstly by the fee paid by the merchants for enrolling the services (machine etc.). Secondly from the card holders who default by not paying the entire outstanding balance before the due date.
Credit Cards help in day-to-day transactions of goods & services offering a free credit period provided the card holder pays the outstanding balance within the grace period; otherwise the card holder has to pay interest charges & late fee if the payment is made after the due date.
In nutshell buying through credit cards really benefit till the time you pay your card bills on time, or else it will turn out be very expensive.
Credit Cards help in day-to-day transactions of goods & services offering a free credit period provided the card holder pays the outstanding balance within the grace period; otherwise the card holder has to pay interest charges & late fee if the payment is made after the due date.
In nutshell buying through credit cards really benefit till the time you pay your card bills on time, or else it will turn out be very expensive.
The process starts with the swiping of your card on the merchant’s card swiping machine which has been provided by the acquiring bank to him. As soon as the card is swiped; the transaction is checked & verified by the card issuing bank whether the credit card is eligible for the requested amount of credit. Once the card holder is verified for the credit, he signs the charge slip which is forwarded to the acquiring bank and closes the transactions with the merchant; further the acquiring bank settles the transactions with the issuing bank.
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