Surprising Credit Cards Facts You Should Know About

It may not be enjoyable to receive your credit report each month, but the subject of credit cards is quite fascinating. Behind the tiny plastic cards that we all use there is a long and storied history and there is a great deal about their primary method of payment that the majority of people simply don’t know. Here are some unexpected credit card facts that may make you reevaluate how you use your wallet.

Your account remains open even though your card expires

An expiration has two functions. An existing credit card could only withstand 3 to 4 years’ worth of dipping and swiping. The issuer of your card can send you a replacement card before the current one expires by using the expiration date. Second, since the expiration is yet another piece of information you would only know if you had the card in your possession, it provides cardholders with a minimum of identity theft protection.

Before your current card expires, the majority of credit card issuers send you a new one. Your card will be declined if, for some reason, they don’t and you try to use one that has expired. However, your account should still be active, all you need to do is ask the company that issued your card for a replacement.

You can use a checksum formula to verify credit card numbers

The Luhn algorithm is a formula that determines which credit card numbers are legitimate. With this algorithm, you double every other digit starting from the right. (For example, 1111 would become 2121). Next, you add each of the digits that were obtained. If the sum you arrive at can be divided by 10, then the card's number is real and a card number is invalid if it cannot be divided by 10.

Credit cards were used in farming communities in the nineteenth century

Farmers used to depend on credit provided by nearby general stores before credit cards were widely accepted as payment. Due to their seasonal income, farmers in the 19th and early 20th centuries had to use credit at their neighborhood store for at least a portion of the year. Stores began issuing credit cards (originally made of cardboard) in regions with a high concentration of farmers to make it easier to track down which customers were connected to which accounts.

Your credit card's first digit identifies the card's issuer by company

You might have noticed that the initial number on each of your cards from the same issuer is the same. That is not a coincidence. The first digit on a credit card identifies the company that issued the card: An airline card is shown by the numbers 1 and 2; The number 3 refers to the entertainment and travel sector; banking institutions fall under numbers 4 and 5; 6 is for commerce and finance; 7 is for gas cards, and 8 is for telephones, as well as 9 for tasks from national standards bodies. Account numbers for American Express begin with a 3, accounts on Visa with a 4, Accounts for Mastercard have a 5, and discover accounts with 6.

Bottom Line:

Once you recognize how credit cards perform, you'll be able to get more with each of your cards whether you're maximizing rewards, increasing your credit score, or taking advantage of the travel benefits on your credit card for your upcoming exciting adventure. Maintaining a high credit score can assist you in obtaining credit when you require it. However, you'll need to keep track of every aspect of your financial situation.

Also Checkout: Benefits Of Airline Credit Cards In India