How many credit cards do you have?
In Singapore, for last 5 years, people who have at least one credit card have multiplied three times. This number is huge. Still, some people are not perfectly clear what credit cards exactly are. What benefits and payments are? Visa is sponsoring the most famous credit cards worldwide since 1977.
Do you know how exactly sponsors and banks in Singapore profit from people who are using credit cards?
First, every credit has an interest rate, so they win it. In Turkey, people don’t use interest rate for money payments because they don’t believe it is right. However, all over the world, the price of money is an interest rate. When you are spending money that you don’t actually have then you will pay an interest rate. Another profit for sponsors and banks are annual fees. Comparing to debit cards, credit cards have higher annual fees. If we sum up all the people who pay them we will notice that this amount is a huge one. The last profit comes from merchants. Banks are charging them small percent because they have the ability to use credit card payments. This percent is small – between 1% and 2%. In addition, last payments have higher taxes so it is plus one profit.
What is so special about credit cards in Singapore?
They are highly secured with different features – magnetic stripe, account number, signature panel, etc. The most obvious protection is the account number. If you want to pay with a credit card, an account number is what you need the most. The account number is well protected by the length of the number – MasterCard has 20 digits, Visa has 13. If you want to guess what one number is, sorry to disappoint you, it is impossible – 10 trillion possibilities are.
Next thing is a signature panel where the owner of the card, should write down its own signature. This way, when he signed some receipts, the signature should be the same. This is not very popular protection because most merchants don’t compare signatures. However, in Singapore, there are credit cards with protection against deleting that signature. A white spot will appear and it will be obvious that the credit card was stolen. Finty Singapore has very well structured credit card comparison website, where you can apply for it instantly.
Magnetic stripe proves that the card is a real one. This mechanism is about trustworthiness not about possession. Magnetic cards save information about expiration date but not a personal information.
What is next in credit card structure?
Innovations in technology never end, so we should expect more and more miracles. Although the price of producing one credit card is not very high, there are still some aspects, which will need improvements. So in the future, they will become cheaper for sure. In addition, magnetic stripes will save more and more information Soon it will be completely impossible for someone to duplicate your credit card or to download some information of it. Today, there is still a chance for this type of crime and it is not as safe as you think. Another prediction is that personal credit cards will bring with them information about our preferences and shopping history, as search engines do it today. Another thing we should expect is that credit card will have worldwide acceptance and if you travel from Singapore to Europe, for example, you will be able to withdraw money and shop seamlessly.