LIC Credit Card and Credit Card Protection program

LIC credit card holders can now report loss of any of their cards from anywhere in the world to a 24-hour helpline launched by LIC Cards Services. 

LIC Cards Services Ltd has launched Card Protection Plan for its credit card customers in partnership with CPP Assistance Services which will safeguards all of the LIC cardholder's payment cards - credit, debit and ATM cards. 

The members can also be able to register their non-financial cards such as store cards, loyalty and membership cards. 

Credit Card Security

Besides these, customers will be able to retrieve important details on lost/stolen documents like passport, PAN and driving license also 

To avail the new service, customers would need to purchase a membership plan offered by LIC and register their cards with CPP.

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Credit Card Default Settlement - Step by Step Guide

Here is how you have to deal with it. When you have queries on credit card defaults and delayed payments which has taken the payment obligation of the banker to few Lakh rupees.

Talk to the bank who issued the card and tell them you would like to settle off in good faith and ask for concession and negotiate hard, yes put all your negotiation skills to work here.

Once you both settle on some amount these are the steps you MUST and Should follow. It is better to negotiate with the bank itself rather than the collection agent because Bank Pays to the Collection Agent commission as high as 15% of the recovered amount and he will haress you until you pay it to the bank because the agent is awaiting his comission.

§         Get a letter from the bank in which they mention "Final Settlement of Outstanding dues" with your complete name, address and credit card number on which you have defaulted.                                                                                                      

§         Make your payment by CROSSED CHEQUE only

§         As soon as the payment is done, close this credit card account by giving writing instructions saying w.r.t Final Settlement, I have cleared all the dues and want this account to be closed. [Keep a proof of closing this account, say banker stamps on the second copy of the lettr or send it by registeredA.D]

• Preserve all this documentation for the next 5 years, atleast.
• Chances are the your name will be in the CIBIL defaulters list, give time of 6 months before you apply for another loan so that the bank clears your name off defaulters list.

§         Work and Plan your finances well before you opt for any other form of credit - card, personal Loan, auto loan etc

§         Next time when you apply for any kind of credit, if your name is still in the defaulters list, then you have every right to know on which account you have defaulted. If this is the same as the credit card account on which you have defaulted, then all those documents of Final Settlement, crossed Cheque payment will come in handy here. Attach attested photocopies and try to get your name cleared off the defaulters list. Don't submit the originals you have.

§         And finally you have to live with this painful process.

If Settlement Amount is as Large as Rs 300,000 [3 Lakh] ? Hire a lawyer because the deal is big and in any case save all the documentation.

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Credit Card Protection Tips

Don't have enough cash in hand to buy the latest Coby MP4 Player that you always wanted to? No problem. Use one of the several credit cards that you own from various abanks.

Of course using a credit card to buy goods and services you desire is indeed the most convenient way of shopping for millions of Indians, more so during the festive season, there are a few things you should know before you actually do that.

Remember that a credit card is an unsecured loan advanced by a bank or financial institution after ensuring that only those who meet certain credit parameters are qualified to use the credit card.

Here are a few MUST KNOWs before you start using your credit cards.

1. Always read the terms and conditions before using the credit card because once you use the credit card it is assumed that you have accepted the same.

2. A card is usually issued for two years and the annual fee is waived off only for the first year. The second year fee is usually charged and if you do not wish to pay this fee, you should cancel the card before using it in he second year because using it indicates that you have agreed to paying the second year's subscription.

3. 'Lifetime free credit cards' is a new trend in the industry and before opting for one you should check with the bank if all annual fees are indeed being waived off.

4. Always try and pay the entire amount outstanding to the extent possible because all unpaid amounts carry a hefty interest and turns out to be very expensive if you decide to roll your credit.

5. Whenever you make a large purchase on your credit card you will be given an option to pay by EMI (equated monthly installments). It is recommended that you pay the entireamount at the extent possible and avoid the EMI route as it is prohibitively expensive.

6. Avoid borrowing cash on credit card as it turns out to be very expensive because of the interest amount charged. Different banks levy different interest rates on cash borrowed on your credit card. Please ask your credit card issuing bank or company about the interest charged on such transactions.

7. Never choose a credit card for its insurance cover but for its core offering, that is, more than 50 days of interest free credit if you use it smartly.

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Card Protection Program an Introduction

History
The CPP Group Plc was founded in 1980 by Hamish Ogston who is currently the Non-Executive Chairman. Headquartered in the United Kingdom, the CPP group operates internationally via offices in the USA, Germany, Ireland, Italy, Portugal, Spain, Turkey, Hong Kong, Singapore, Malaysia and now also in India.As a pioneer and global leader in the assistance services market, we have more than 10 million satisfied customers, 280 business partners and a staff of over 1,700 worldwide. We work with many of the world's leading card institutions, providing our market leading products and services to their customers.

Assistance services
Assistance services is about people taking advantage of the opportunities and choices that result from the increasing complexity, mobility and pace of modern life.As the use of plastic cards has grown exponentially across the globe, and as lifestyles have become increasingly frenetic, dynamic and fast paced, the need for services that remove complexity, deliver support in difficult situations and provide reassurance every day, has never been greater.Our assistance products and services are designed to simplify the complexities of everyday living whether these affect personal finances, home, travel, personal data or future plans. When it really matters, CPP Assistance Services enable people to live life and worry less.

*Credit Card Protection Program FAQs

CPP Assistance Services, India
CPP Assistance Services, India is part of the CPP group, a pioneer and a world leader in the emerging assistance services market. We help people deal with some of the frustrations that come with a faster pace of modern life. CPP launched card protection in Asia as far back as 2004, starting with Hong Kong, followed by Singapore, Malaysia and now India.CPP is here to cater for India's growing assistance services needs. CPP has launched its flagship card protection in partnership with card issuing institutions.

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Card Protection Program (CPP) Clarified

Here are the answers to some of the general questions that people ask about CPP. For any other queries, please call the CPP helpline number - 6000-4000 (Prefix city STD code if calling from a mobile phone).

Why should I buy a CPP Card Protection membership?
When you realise that your wallet is missing, it's a race against time to have all your cards stopped immediately. With CPP Card Protection, all it takes is one free call to the customer service team and they will contact your card issuers to have your cards cancelled within minutes. So no matter where you are in the world, CPP will take care of it for you.

*CPP History

What does my membership cover?
A summary of the benefits you are entitled to is as follows:

• One free call to block all your cards
• 24 hour toll free helpline
• World wide cover
• Emergency travel & cash assistance
• Fraud protection
• Valuable document registration

Lost card replacement assistance The details are contained in the membership guide and terms and conditions which come with your welcome pack.

How can I purchase a membership?
To buy Card Protection call CPP on 6000-4000(Prefix city STD code if calling from mobile phone)

------ Classic plan Premium plan
Single - Rs. 995/- Rs. 1295/-
Joint - Rs. 1495/- Rs. 1945/-

How can I pay for my membership?
CPP accept payment by Visa and MasterCard. The annual fee is deducted as one lump sum at the beginning of the membership and is automatically applied each year until you advise otherwise

When will I receive my welcome pack?
Normally, you should receive the welcome pack within one week from the date the payment is confirmed.

What is in the welcome pack?
The welcome pack contains the following items:
-A confirmation letter outlining your membership details.
-A registration form for you to register all your card details.
-Terms and conditions of the membership.
-A membership guide listing all the benefits you are entitled to.
-Key fobs and reminder stickers which will help serve as reminders of CPP contact numbers.

How long is a membership period?
Your membership runs continuously for one year from the membership effective date.

How do I renew mu membership?
Six weeks prior to the expiry date of your membership, CPP will send you a reminder letter advising that your membership is due for renewal. CPP will take payment from the same credit card as in the initial membership unless otherwise advised by you to debit an alternate.

Can I cancel my membership anytime?
When you first purchase the membership, you have a 30 day cooling off period when you can cancel the membership and receive a refund if no claims have been made.

How do I register my cards?
There are 2 options for registering your card details.
Mail - You can complete the registration form, found in your welcome pack and return it to : CPP Assistance Services Pvt. Ltd.PO Box No. 4337,Kalkaji Post OfficeNew Delhi - 110019
Phone - You can call CPP on 6000-4000 (Prefix city STD code if calling from mobile phone)

Why do I need to register my cards?
Your cover starts as soon as CPP have confirmed payment. Therefore, we recommend that you register your card details with CPP as soon as possible. By doing so, CPP will be able to cancel your cards right away to avoid card fraud taking place.

If I lose my cards, how do I report the loss?
As soon as you have discovered the loss, you should call CPP's lost and stolen card helpline on 6000-4000 (Prefix city STD code if calling from mobile phone) as soon as possible to report your loss. CPP will then contact your card issuers immediately to cancel your cards.

If I am abroad and I find that my wallet, travel tickets and passport have been stolen, what should I do?
When you discover the items are missing, immediately call CPP's lost and stolen card helpline on 6000-4000 (Prefix city STD code if calling from mobile phone). CPP's specially trained agents will be able to guide you through the whole process. It's first priority will be to cancel the lost cards. CPP will then advise you how and where to receive a replacement passport. Finally, CPP will assist in the re-issuing of travel tickets so that you may return home.

How can I pay for my hotel expenses?
You should inform CPP that you would like assistance with the hotel payment. CPP will then liaise with the hotel and advance the expenses to pay the hotel directly.

How do I make a claim?
Should you ever need to make a claim, please call CPP on 6000-4000 (Prefix city STD code if calling from mobile phone) and they will send you a claim form. The form needs to be completed with as much detail as possible and then returned to CPP with original documents for processing.

Is there any time period limitation for submitting a claim?
All claims must be received within 28 days from the date of reporting card loss. Please remember to include all the documents that CPP ask for, including original receipts (not photocopies) for any expenses claimed for. If you do not, CPP will not be able to process your claim until we have received them.

Who can I contact if I have any questions relating to my membership?
You can call the customer service helpline on 6000-4000 (Prefix city STD code if calling from mobile phone). The lines are open 24 hour a day, seven days a week.

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Citibank Platinum Select Credit Card - Launched

Citibank India has announced the launch of the Citibank Platinum Select Credit Card, which offers customers a powerful combination of preferential privileges, priority service and superior protection.

The key differentiators of the Card are its best-in-class rewards program with superior earn rates, low interest rates, a service platform dedicated exclusively to its cardmembers and enhanced security and fraud covers. Citibank Platinum Select aims to provide cardholders a highly individualized experience based on the key themes of gourmet dining, rewarding shopping, recreational family time and peace of mind.

The Card will be launched initially in New Delhi and Mumbai and will carry an annual fee of rupees Four Thousand. Globally, Citibank Platinum Select is a well-established and popular credit card platform. India is one of only two countries in Asia-Pacific - the other being Thailand - to offer the Citibank Platinum Select Card.

Announcing the launch, N. Rajashekaran, Country Business Manager, Global Consumer Group, Citi India, said, "The Citibank Platinum Select is a fine demonstration of our strategy to offer the right product propositions for maximum customer engagement and activity on our products, supported by strong customer experience and service initiatives.

" Speaking on the occasion, Sandeep Bhalla, Business Manager, Cards, Citi India, said, "Recent research has revealed that a strong majority of Indians believe that money can't buy happiness, ranking peace of mind, good health and a happy family life over money. It is such decisive insight that has contributed to the design of the Citibank Platinum Select proposition. Each element of the package is carefully selected to make customers feel indulged. We are confident that the bouquet of preferential privileges, priority service and superior protection will make the Platinum Select the card of choice in the customer's wallet."

The Citibank Platinum Select Card benefits include: Preferential Privileges

-- Accelerated Earn Rates: Customers earn 5 times the reward points on lifestyle spends such as those on apparel, dining and books. Reward Points earned on the Citibank Platinum Select Card can be redeemed in-store; from the rewards catalogue; converted to airline miles; for customized holiday packages or against any purchase on the statement.

-- Exclusive dining privileges: Citibank Platinum Select Cardmembers will be placed on priority for table reservations at over 150 of the finest outlets besides being offered complimentary beverages and desserts and a year-round discount of upto 20%.

-- Complimentary access to swimming pool, spa and health club: Customers can enjoy weekend experiences centered on complimentary access to the swimming pool, spa and health club at some of the best hotels, and complimentary golf lessons. Customers with substantial spends on the Card will be eligible to enjoy the complimentary services of a chauffer-driven sedan or free tickets to a movie show at select multiplexes.

-- Discounted access to signature golf courses: Cardmembers and a companion can enjoy golf at 15 signature domestic golf courses at upto 50% discount on green fees with no black-out days, advance payments and cancellation charges.

-- Citibank Platinum Select Card members will be able to enjoy a 50% discount on weekend stays at Taj Properties and a 50% discount on buffet lunches at any Taj property for up to six persons at a time.

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Card Protection Program. CPP

Here is a Great news for Credit Card Holders in India. Under pressure from regulator to introduce cover on lost card, fraudulent transactions etc - Kotak Credit Cards and Citibank have introduced Card Protection Programme.

What is Card Protection Programme - CPP ?

As a credit card holder, you are protected from liabilities arising from your credit card loss / theft on transactions before and after. Additionally, it covers fraudulent transactions without you losing the card [say a -commerce site gets hacked which has stored your credit card details and they are misused]

CPP comes at a small fee of Rs 950 p.a and can get coverage of upto Rs 50,000 on fraudulent transactions and for Rs 1,250 fee th coverage goes upto Rs 100,000. It also covers upto Rs 10,00,000 for transactions done after reporting of credit card loss / theft.

Kotak Bank has introduced CPP facility for its Platinum and signature card holders for FREE.

*Credit Card Protection Program FAQs

We recommend users to sign-up for CPP facility if their bank is offering the same. This comes for FREE in the US with your credit card. However, in India banks are charging a fees and we feel its OK to do so in the beginning and later the fees can be reduced. Share your experiences.

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Credit card holders get protection against exorbitant charges

Supreme Court ruling has brought a big relief for credit card users for the moment. The Supreme Court gave this ruling while refusing to stay a national consumer forum directive that banks cannot charge more than 30% interest per annum on defaults on card payments. After this ruling the card holders have got protection from exorbitant charges, which are as high as 49% in some cases.

Bankers had filed an appeal in Supreme Court against the consumer court order and asked for a stay on it. The appeal was filed by MNC banks — HSBC, American Express, Citibank and Standard Chartered Bank — challenging the consumer forum order. A Bench comprising Justices B N Agrawal and G S Singhvi has issued notice in this regard to Reserve Bank of India and the NGO 'Awaz', on whose petition the limit on interest rate was imposed.

What is enlightening the banks have listed as many as 27 factors why they needed to charge higher interest rates and these include calls made from service centre to seek new customers. From the list it appears that almost all costs involved in banking activities over telephone and internet are being charged from the hapless credit card holder, going by the banks' submissions to the SC.

When banks requested for a stay on the ground that they are regulated by the RBI regulation guiding interest rates, the Bench just issued notice on their applications and have asked for responses within three weeks.

But the risk of a higher interest has not gone away as the banks — HSBC, American Express, Citibank and Standard Chartered Bank — have come together to persuade the SC of what they said were their compulsions in charging between 36% and 49% interest.

While in the July 7, 2007 order the National Consumer Disputes Redressal Commission (NCDRC) had ruled that "charging of interest rates in excess of 30% per annum from credit card holders by banks for the formers failure to make full payment on the due date or paying the minimum amount due, is unfair trade practice".

It had also stated that punitive interest can be levied only once for the period of default and should not be capitalized, and also termed the practice of computing interest on monthly basis as "unfair trade practice". In the list of factors given by the banks for justifying the exorbitant rates was the cost of calls. In other words, calls made randomly by the bank's authorized call centers relentlessly to convince people to take a credit card, has been taken into account for understanding through charging of penal interest from a defaulting card holder.

The other notable factors listed by the banks are:

• Processing charges for creating a new card in operating system
• Courier cost and cost of embossing the card
• Charges for providing phone banking service
• Charges for couriering monthly statements
• Charges for providing internet banking facility
• Cost of waiving charges for service reasons
• Charges for marketing a product and promotional offers
• Charges of reward programs and loyalty program

"The National Commission has failed to appreciate that the rate of interest on defaulted or partial payments of dues is determined by taking into consideration various factors, including the risks of default, and therefore, this commission may not determine the issue as to whether the interest at the rates of 36% to 49% per annum is excessive," the banks said.

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Citibank launches card protection plan

Citibank has launched a credit card benefit that protects against any misuse due to lost/stolen card. Amongst other benefits, it safeguards and protects them against card loss, theft and resultant fraud.

Launched in partnership with CPP Assistance Services Pvt Ltd (CPP), a global leader in assistance services marketing, this service is extremely convenient as it protects the cardholder’s entire wallet of cards, credit and debit, including those of other issuers, and even non-financial ones such as store, loyalty and membership cards. Further, the cardholder is protected from any fraudulent use that may have occurred seven days prior to discovery and within 24 hours of notification of card loss, the bank said.

Additionally, the CPP Card Protection offers benefits such as a single number to call to cancel all lost cards, replacement assistance, emergency travel and hotel assistance in India and overseas due to card loss, valuable document registration and retrieval, reminder services and access to a 24 Hour toll-free CPP helpline.

Cardholders can choose from a set of distinct plans, depending on their lifestyle and spend behaviour. Depending on the plan selected, customers can be covered for fraud loss on their cards up to Rs 1 lakh prior and Rs 20 lakh post notification; overseas emergency assistance for payment of hotel expenses of up to Rs 1.2 lakh and Rs 60,000 in India; and replacement travel ticket advance of Rs 1.2 lakh while overseas and Rs 60,000 whilst in India. The annual fee applicable is Rs 995 for the Classic plan and Rs 1295 for the Premium plan. Citibank Cardholders can now enrol themselves for CPP Card Protection membership by calling the Bank’s 24X7 customer service channel CitiPhone in their city.

Losing one’s wallet can be devastating, especially if its contents are stolen and abused. With this protection offer, consumers can now travel and use their cards with a peace of mind, anytime and anywhere knowing that their card is protected. Also, regulators have strongly recommended banks to introduce a cover to take care of the liabilities arising out of lost cards, and Citicards has provided such a solution to our customer base.”

In addition to providing Citibank cardholders protection against fraudulent usage of their cards at home or overseas, CPP Card Protection also serves as a repository of valuable personal information such as passport details, driving license number, share certificates, insurance policies and other such important documents. Once these are registered with CPP, cardholders need only to make a single phone call to retrieve these instantly.

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Getting the most from your credit cards involves four main steps:

Use your credit cards wisely.

Protect yourself against fraud.

Review your credit history regularly.

Get the right card for your needs.

Use your credit cards wisely

Follow these simple tips to get the most from your card.

Tips:-

Pay your credit card bills on time. This is the single most important thing you can do to preserve and enhance your credit rating. Always pay at least your minimum payment and allow time for your payment to reach the company if you are using the mail.

If possible, pay off your balance in full each month. If this is not possible, then make as large a payment as you can comfortably afford. Paying off or paying down your balance is a sound financial move—one that will save you money on interest charges.

If you can’t pay off your balance in full, then slow down on your credit card use for the next while. Take time to step back and have a careful look at how much you earn and how much you spend each month. A little budgeting can save you big money down the road.

Check your statement carefully each month. Review your statement carefully. Do all the charges look correct? Have any required credits been applied? Are there any unusual or unexpected charges? Your credit card company will correct legitimate errors, but only if you bring them to their attention in a timely manner before you pay your bill.

Transfer your balance to a card with a lower interest rate. If you have two or more credit cards with outstanding balances, consider moving the outstanding balances to the card with the lowest interest rate. You will save money each month and simplify your record keeping by receiving only one bill.

Negotiate for a lower rate with your credit card company. If you have a good credit history, you are a valuable asset to your credit card company. Call them and seek ways to lower your interest rate. This is often possible, but never advertised. If the interest rate you are currently paying is very high, imply you may cancel the card and go with a competitor unless they adjust your rate downward. It doesn’t hurt to ask, and you may be surprised at the results.

Protect yourself against fraud

While credit card fraud is a problem, here are a few simple steps you can take to greatly reduce the risk of becoming a victim.

Tips:

• Sign new cards immediately. When you receive your new or replacement card in the mail, sign it, in ink, right away. If it is a replacement card, destroy the old card by cutting it into many small pieces.
• Shred old credit card receipts. You can purchase an inexpensive paper shredder at an office supply store. All old receipts with your credit card number and any unneeded documents with your social insurance number or other sensitive personal information should be shredded before disposal. This prevents the common practice of criminals going through the trash to find receipts and stealing your identity
• Never fax your credit card number. Your credit card number can lie for hours in the fax basket at the other end. Anyone passing by can record your number and begin to use your card number fraudulently. It is even possible for criminals to intercept your credit card number while the fax is in transmission.
• Use caution when giving your credit card number out on the phone or on the Internet. Only give out your credit card number on telephone calls you initiate to business or organizations you trust. Never give your number out to callers who call unannounced, no matter how legitimate the call sounds.
• On the Internet, look for an Internet address that begins https:\\. The “s” indicates that it is a secure connection and a small padlock symbol should appear in the bottom right hand corner of your screen, indicating it is safe to transmit your credit card number.
• Call your credit card company instantly if you suspect trouble. All credit card companies have 24 hour lost and stolen help lines. If you lose your wallet or purse or have it stolen, call without delay! Much fraud happens within the first hour or two, before the victim realizes the cards are missing. Your credit card company will block your cards from being used and stop you from being responsible for any charges thieves incur.
• Take advantage of any security features your card offers. Many newer cards have the option of including your photograph on the card. This is excellent protection and is highly recommended.

Review your credit history regularly

After you have obtained the best credit card, and are using it wisely, review your credit history on a regular basis. This helps ensure your history is accurate and that any issues have been resolved to your satisfaction.

North America has three national credit-reporting bureaus. Your credit rating is held at one or more of these bureaus. When checking on your rating, be sure to contact all three, as your rating may be held on file at more than one bureau. The three national credit bureaus where you can check your credit report are Equifax, Experian, and Trans Union. Check the Yellow Pages, under Credit to find the numbers in your area.

Get the right card

With all the choices in cards available, chances are good,very good, you can find a better card for your needs. Today’s cards can save you money, offer better features, and even support a cause you believe in. Here are some tips on finding the right card and where to check that you have the best card for your needs.

Tips:

Be alert for companies offering a great interest rate for transferring your existing balance to their card. Usually these rates are only in effect for a short time, often six months. At the end of this time, the rate can revert to a much higher permanent rate. Keep your eye on the Annual Percentage Rate (APR); this is the figure that counts in the long run.

Lower is better: read the fine print and find the Annual Percentage Rate (APR). This is the interest rate the companies charge you if you carry a balance. You want the lowest rate possible; as each percentage point drop will save you money on the months you have an outstanding balance.

Nothing can be better: Try for a credit card that does not charge an annual fee. Many credit cards charge you a fee each year to use their cards. While this may be offset by other benefits the card may offer, you can find cards that do not charge this annual fee. Why pay for the privilege of using a credit card when you don’t have to?

Explore the options: Today’s cards offer a wide range of excellent features, including frequent flier points, programs that bank points toward a new car, and cards that support charitable organizations. Other options worth having include car rental insurance coverage, trip cancellation coverage, and extended warranty coverage.

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The Stripe on Credit card

The stripe on the back of a credit card is a magnetic stripe, often called a magstripe. The magstripe is made up of tiny iron-based magnetic particles in a plastic-like film. Each particle is really a tiny bar magnet about 20-millionths of an inch long.

Your card has a magstripe on the back and a place for your all-important signature.

The magstripe can be "written" because the tiny bar magnets can be magnetized in either a north or south pole direction. The magstripe on the back of the card is very similar to a piece of cassette tape.

A magstripe reader (you may have seen one hooked to someone's PC at a bazaar or fair) can understand the information on the three-track stripe. If the ATM isn't accepting your card, your problem is probably either:

A dirty or scratched magstripe
An erased magstripe (The most common causes for erased magstripes are exposure to magnets, like the small ones used to hold notes and pictures on the refrigerator, and exposure to a store's electronic article surveillance (EAS) tag demagnetizer.)

There are three tracks on the magstripe. Each track is about one-tenth of an inch wide. The ISO/IEC standard 7811, which is used by banks, specifies:

• Track one is 210 bits per inch (bpi), and holds 79 6-bit plus parity bit read-only characters.
• Track two is 75 bpi, and holds 40 4-bit plus parity bit characters.
• Track three is 210 bpi, and holds 107 4-bit plus parity bit characters.

Your credit card typically uses only tracks one and two. Track three is a read/write track (which includes an encrypted PIN, country code, currency units and amount authorized), but its usage is not standardized among banks.

The information on track one is contained in two formats: A, which is reserved for proprietary use of the card issuer, and B, which includes the following:

• Start sentinel - one character
• Format code="B" - one character (alpha only)
• Primary account number - up to 19 characters
• Separator - one character
• Country code - three characters
• Name - two to 26 characters
• Separator - one character
• Expiration date or separator - four characters or one character
• Discretionary data - enough characters to fill out maximum record length (79 char total)
• End sentinel - one character
• Longitudinal redundancy check (LRC) - one character
  LRC is a form of computed check character.

The format for track two, developed by the banking industry, is as follows:

• Start sentinel - one character
• Primary account number - up to 19 characters
• Separator - one character
• Country code - three characters
• Expiration date or separator - four characters or one character
• Discretionary data - enough characters to fill out maximum record length (40 characters total)
• LRC - one character

There are three basic methods for determining whether your credit card will pay for what you're charging:

Merchants with few transactions each month do voice authentication using a touch-tone phone.
Electronic data capture (EDC) magstripe-card swipe terminals are becoming more common -- so is swiping your own card at the checkout.
Virtual terminals on the Internet

This is how it works: After you or the cashier swipes your credit card through a reader, the EDC software at the point-of-sale (POS) terminal dials a stored telephone number (using a modem) to call an acquirer. An acquirer is an organization that collects credit-authentication requests from merchants and provides the merchants with a payment guarantee.

When the acquirer company gets the credit-card authentication request, it checks the transaction for validity and the record on the magstripe for:

• Merchant ID
• Valid card number
• Expiration date
• Credit-card limit
• Card usage

Single dial-up transactions are processed at 1,200 to 2,400 bits per second (bps), while direct Internet attachment uses much higher speeds via this protocol. In this system, the cardholder enters a personal identification number (PIN) using a keypad.

The PIN is not on the card -- it is encrypted (hidden in code) in a database. (For example, before you get cash from an ATM, the ATM encrypts the PIN and sends it to the database to see if there is a match.) The PIN can be either in the bank's computers in an encrypted form (as a cipher) or encrypted on the card itself. The transformation used in this type of cryptography is called one-way. This means that it's easy to compute a cipher given the bank's key and the customer's PIN, but not computationally feasible to obtain the plain-text PIN from the cipher, even if the key is known. This feature was designed to protect the cardholder from being impersonated by someone who has access to the bank's computer files.

Likewise, the communications between the ATM and the bank's central computer are encrypted to prevent would-be thieves from tapping into the phone lines, recording the signals sent to the ATM to authorize the dispensing of cash and then feeding the same signals to the ATM to trick it into unauthorized dispensing of cash.

If this isn't enough protection to ease your mind, there are now cards that utilize even more security measures than your conventional credit card: Smart Cards.

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