Debit and Credit Transactions:
Any transaction which reduces the amount the card holder can spend is registered as the debit transaction in the account of the card holder. For credit transactions just opposite holds true, i.e. for any transaction which increases the amount the card holder can spend a credit transaction is recorded in the account of the card holder.
Sale (or purchase) and Payment Transactions:
As mentioned above, a sale or purchase transaction is a transaction by which the user makes use of the credit or debit card at any permitted outlet to buy any item or to avail the cash and which in turn reduces the capacity of the card holder to make further purchase transactions.
By any payment transaction, as opposite to the purchase transaction, the card holder pays some amount to the bank which increases the card holder’s capacity to make purchase transactions.
Plan:
A plan is a record to keep details for a particular type of transaction. A plan contains following details for any transaction:
- What interest rate will be applicable for that transaction and from which date it will be applied
- What will be the due date to pay for any transaction
- What other charges will be applicable for that transaction in all the faces like if the user pays in time, if user doesn’t pay in time, if user pays the cheque but it is returned from the bank, and various other such conditions.
Types of plans:
- Cash Plan
- Retail Plan
- Balance Transfers
- Loan Plan
Current Balance:
Current balance is the total amount at any point in time the card holder needs to pay. It is increased with any debit transaction for the account holder (like purchase transaction) and is reduced with the credit transactions made for the account holder (like payment transactions)
Open to Buy:
Open to buy is the amount available for the card holder to spend at any point of time. As opposite to current balance, it is reduced with any debit transaction for the account holder (like purchase transaction) and is increased with the credit transactions made for the account holder (like payment transactions)
Principle Balance:
Principle balance is a component of current balance and it reflects the actual amount the card holder has spent or used whereas, the current balance shows the all the interests and charges levied on to that account in addition to the principle balance.
Credit Limit:
Credit Limit, as the name suggests, is the limit which user can have current balance upto.
Interest Accrual:
When the card holder spends the issuer bank’s money, the bank charges interest on that amount. This interest is accrued until the amount is paid up. There are various methods of accruing interest. They are as follows:
- Daily Accrual
- Monthly Accrual
- Monthly adjusted ending balance
Delinquency:
When the card holder does not pay the amount he is asked to, he becomes delinquent. The more time he takes in paying the more delinquent he becomes. The parameters on which delinquency is measured is as follows:
- Contractual delinquency
- Recency delinquency
- Days delinquency
Billing Cycle:
Billing cycle is the day of the month decided for any account on which all the monthly processing (like interest calculation) required is done.
Cycle to Date:
For any purpose if cycle to date term is used it implies the time from last billing cycle to today’s date (for example cycle to date transactions means the transactions made after last Billing Cycle till today’s date)
Batch:
Term used to describe a group of transactions. A batch of transactions consists of a batch header and the individual transactions. The batch header usually contains the batch number that identifies the batch, the number and amount of debit transactions, and the number and amount of credit transactions.
Batch Processing:
Mode of data processing in which items are accumulated as a group and processed sequentially offline.
Monetary updates:
Any update which affects the currency value of the account (for example any sale transaction posting which will update the monetary status of the account)
Non-monetary updates:
Any update which does not affect the monetary status of the account (like change in address of any account holder)
Demographic Information:
Information regarding the physical location of the cardholder like his country, state, city, zip etc.
Block Codes:
A user-defined code that identifies an account requiring special processing or handling.
Billed-not-paid:
Component on the credit plan segment that increases or decreases when a transaction is posted to an account.
Check Digit:
Digit within an account number that is derived from a computation of a re-determined formula using the other digits of that account number. The check digit is used during the edit process to validate account numbers, customer numbers, card numbers, and store numbers.
Grace Days:
Number of days after a statement is produced during which a finance charge is not assessed if the customer pays the statement balance in full.
Payment Due Date/ Days:
Number of days or a certain date before which if payment is made, no interest or other late charges will be calculated
Statement:
A printed document that furnishes the details of all the
monetary transactions made by the customer in
interregnum between the two billing cycle dates and the
service charges that were incurred by the Customer.
Merchant or Store:
The shops or outlets where the bank or retail card can be used.
Charge off:
The different stages of an account which does not perform as a normal account.
Stages of charge off
Stage Account status
None 0
Potential 1
Pending 2
Auto-initial 5
Manual-initial 6
Final 9
Collections:
The branch of credit card industry which is responsible for collecting payments from the card holders
Learn Payment Card 