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How does Credit Card payment work?

 
 
didxga
 
Reply Tue 4 Jan, 2011 12:15 pm
If i buy book from online shopping site via my Credit Card, how can retailer get money from my Credit Card? What in place to ensure the retailer get exact amount of money i should pay for, no less no more? Is there a risk to tell someone my Credit Card number for them to be able to charge me like we fill Credit Card number in Amazon? Thanks in advance!
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Type: Question • Score: 3 • Views: 2,676 • Replies: 11
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dadpad
  Selected Answer
 
  2  
Reply Tue 4 Jan, 2011 12:26 pm
Your credit card and many other brands of credit cards are all connected to one central clearing house.

Effectively what happens is the retailer sends an account to the clearing house. the clearing house pays the bill and then sends a bill to your bank or card issuer. The card issuer pays the clearing house and then sends you the bill. when you get your monthly statement you pay the card provider.

This is all done electronically.

The system works on the basis that the clearing house will pay up before they recieve the money from your bank and your card provider will pay the clearing house before you pay actual money to the card provider.
The card provider pays on the basis that if you dont pay them within a set period they will be able to charge interest and make a profit on the transaction.
Irishk
 
  1  
Reply Tue 4 Jan, 2011 12:35 pm
@didxga,
didxga wrote:
Is there a risk to tell someone my Credit Card number for them to be able to charge me like we fill Credit Card number in Amazon?


Yes. Credit cards from a reputable bank will generally work with you on fraudulent charges, however, and will usually remove them at no cost to you.
0 Replies
 
dadpad
 
  1  
Reply Tue 4 Jan, 2011 12:38 pm
@didxga,
didxga wrote:

Is there a risk to tell someone my Credit Card number for them to be able to charge me like we fill Credit Card number in Amazon? Thanks in advance!

yes there is a risk if using your card online.

Data Protection:

When a user submits sensitive information via the Internet, that information is protected by what is called data encryption. So when an Internet company order form asks users to enter sensitive information, such as credit card number, that information is encrypted and is protected with the high quality encryption software. The process of encryption prevents unauthorized individuals from viewing your information as it is securely transmitted over the Internet. Once received, your credit card information is not transmitted over the Internet again.

How Can I Tell If I'm on a Secure Page?

While on a secure page, such as our order form, the lock icon on the bottom of Web browsers such as Netscape Navigator and Microsoft Internet Explorer shows a locked lock, as opposed to showing an un-locked lock (an open lock) when users are just ‘surfing’. Also notice that the URL address at the top of your computer screen will start with the letters "https" when you are on a secure page as distinct from "http" when you are on a non-secure page.

further relevant information is available here and you should read it all
source:
http://www.choice101.com/r72-credit-card-safety.html#DataProtection

0 Replies
 
didxga
 
  1  
Reply Tue 4 Jan, 2011 12:52 pm
@dadpad,
Thanks @dadpad. I am not very clear about the first part of processing---"the retailer sends an account to the clearing house". If i buy book online, how the clearing house know the total exchange amount? (especially when i exchange with book seller online without a third part guarantee organization like Amazon, in this situation i can only tell the seller the credit card number hoping the person is trustful who will apply the exact amount to clearing house?)
dadpad
 
  1  
Reply Tue 4 Jan, 2011 01:05 pm
@didxga,
didxga wrote:

Thanks @dadpad. I am not very clear about the first part of processing---"the retailer sends an account to the clearing house". If i buy book online, how the clearing house know the total exchange amount? (especially when i exchange with book seller online without a third part guarantee organization like Amazon, in this situation i can only tell the seller the credit card number hoping the person is trustful who will apply the exact amount to clearing house?)

If an online retailer offers credit card transactions you need to be sure they offer a secure transaction facility. this is indicated by the LOCK icon that will apear in the bottom right corner of your screen.

I suggest you do not transact with anyone who does not offer a secure and encrypted facility.
If you find yourself with no other option keep a record of all transaction details.
If the person involved does not charge the right amount you can dispute it with your bank but you may need copies of any correspondance, emails screenshots, requests for payment etc to back up your claim.
I must say it all seems (from your description) a little risky to me.


0 Replies
 
jonathanpaul
 
  0  
Reply Wed 16 Mar, 2011 07:51 am
@didxga,
I am facing a problem right now because I was not able to pay my credit card bill on time for the reason that I did not get a billing statement from them. I do not know how much will I pay them given that I am using my card in everything that I buy. Are they going to charge any fee or charges for not paying on time? I need help here.
Butrflynet
 
  1  
Reply Wed 16 Mar, 2011 08:44 am
@jonathanpaul,
If you have an old bill from them, there should be a customer service contact number somewhere on it. Best thing to do is give them a call and explain the situation to them. Sometimes they give people a break if it is the first time they've been late with a payment.
jonathanpaul
 
  0  
Reply Thu 17 Mar, 2011 05:19 am
@Butrflynet,
I have though of doing that.. I do have my old bill and got the number that i need to call..

if you don't mind, have you experience same situation that i have?
didxga
 
  1  
Reply Wed 23 Mar, 2011 10:04 am
@jonathanpaul,
I have not yet got your situation, But I think it's best to pay the bill and explain your problem at once. Good luck to you.
mackdollar
 
  1  
Reply Mon 20 Jun, 2011 01:21 am
@didxga,
When you use a credit card to purchase something, you are making yourself a loan through the credit card company. You have to pay the company back for this loan at the terms you have agreed to when you signed the application for the card.

If you make a payment in full when you receive your monthly bill, there will be no additional amount due, no interest, and usually no handling fee. When you make a partial payment, whether it is the minimum due, or a larger amount, the company will charge interest, and perhaps a monthly fee, which will be added to the next monthly bill. As long as the amount you pay is less than the amount due, you will continue to be charged interest every month, based on the balance remaining. If you pay the entire amount due at the end of the month, there will be no new interest charges. There might be a small amount of interest on the previous balance. Often, if you call the company and point out that you paid the previous bill in full, they might waive the final interest due.
roger
 
  1  
Reply Mon 20 Jun, 2011 03:06 am
@mackdollar,
You should also keep in mind that if you don't pay in full, the very next charge after the due date will begin accruing interest from the date of the charge, not from the billling date.
0 Replies
 
 

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