Prior to 1958 there were no universal credit cards. Each merchant made their own credit-granting decisions and issued their own charge cards. Actually, it was rare that a card was even issued in the early days. Other than oil companies, most merchants kept paper files that listed your balance and your credit limit.

All of that changed in 1958 when Bank of America revolutionized the consumer credit industry by issuing their blue, white, and gold BankAmericard. Bank Of America literally mailed credit cards off to millions of consumers, no application required. The idea took off and today, BankAmericard (now called VISA) holders number in the millions and VISA cards are issued by over 13000 banks around the world.

How VISA Cards Work

Every VISA card is embossed with a unique set of numbers that separate that card from every other VISA card in circulation. The numbers are not random. Here's how they work:

Digit number one is not significant.

Digits two through six identify the bank that issued the VISA card.

Digits seven through twelve or fifteen, depending upon the issuer, represents the account number.

The remaining digits are called "check digits". These check digits are automatically calculated by a mathematical formula that uses all of the other card's numbers as a key. The check digit is a security device that helps to ensure that the card is not counterfeit with a fictitious number.

The VISA Card "Mag Stripe"

The black strip on the back of the VISA card is a specially-encoded magnetic tape that can be read by the card readers at the checkout stand.

All mag stripes contain the account number as a minimum. Different VISA card issuers add their own additional information to the stripe. This may include your full name, ATM "Fast Cash" preferences and more.

How The Merchant Gets Paid

When you use your VISA card to make a purchase, the merchant's computer payment system contacts the VISA network and transmits the information that's encoded on your card's mag stripe along with the amount of your purchase.

The VISA network contacts the computer operated by the card issuer to check your available balance (called your "open to buy"). If you have enough open to buy to cover the purchase, your balance is adjusted to reflect the purchase and the merchant's bank account is credited with the amount you spent less a service charge.

All of this happens in just seconds and you can tuck your VISA card back into your wallet and keep on shopping!

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One name that is recognized nearly everywhere in the world is MasterCard. The familiar red and orange circles have been a part of this organization’s identity since its beginning. What started out as Master Charge in 1967 changed in 1979 to MasterCard and after that to MasterCard International. Most recently, the name has been changed to MasterCard Worldwide. Although the name had changed several times, the organization’s commitment to service has not.

Known primarily for its credit card, MasterCard Worldwide is an organization consisting of numerous financial members from around the world. Among other things, these members have agreed to be issuers of the card known as MasterCard. Members and consumers alike benefit in many ways by being associated with MasterCard. Among most important benefit is that MasterCard is recognized globally and accepted at millions of establishments in the US and abroad.

When you choose MasterCard you have plenty of options. You can apply for a basic credit card that you can use anywhere that accepts MasterCard. If you prefer to keep a closer eye on your budget, MasterCard offers a debit card. The benefit of using a debit card is that charges are only approved IF you have funds to cover the full amount of the purchase.

Another option you have with MasterCard is purchasing personalized gift cards and prepaid gift cards. These types of cards make great gifts when you’ve run out of gift ideas. They’re also safer to use than cash and they offer more flexibility than you’d get if you purchased a gift card from one particular store. These gift cards are available in many denominations and need only be activated prior to use. They are accepted anywhere that accepts a debit-type MasterCard.

The newest addition to the MasterCard family of cards is the PayPass. With the PayPass, you need not swipe your card, enter your PIN or sign a receipt. All you need to do is tap the card against a PayPass reader and your transaction is complete. This technology is only now in the early stages but over 23 million establishments are trying it out. And early results are promising!

With MasterCard, you can make purchases, pay your bills, get money from an ATM and more. There are so many benefits associated with using your MasterCard that it really doesn’t make sense to use any other card. If you are part of the minority who don’t yet have a MasterCard, perhaps it’s time you apply!

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College credit cardscan be a valuable tool for students to build up an adequate credit history. However, without a sound understanding of how credit cards work, or about how to maintain personal financial responsibility, students could find themselves getting into a great deal of debt. By paying attention to the fine print on credit card applications, particularly the expiration date for introductory APRs, young people can make the best use of credit cards for college students while avoiding the worst.

If you've recently started college, you may not have given much thought yet to building up an adequate credit history, or to avoiding a bad one. But you should. Credit history is absolutely vital for some of the most important purchases you'll need to make in life. Without good credit, you'll find it difficult to buy a house, be approved for any kind of loan, or even become employed. So before applying for any college student credit cards, first make sure that you have some sound financial principles and an awareness of your college credit card options firmly in mind, in order to make the best of your credit card and avoid the worst.

Credit cards for college students are marketed to appeal to student interests. College credit cards typically come in a variety of styles and school-specific designs in order to give you the idea that you're "personalizing" your college credit card. Even if you look beyond the appeals to school spirit and a sense of community, you probably still won't see anything too out of place. College student credit cards often come with a  0% introductory APR rate, some  cash back options, "points" systems, and even rewards in the form of gift certificates or discounts for retailers targeting the 18-25 year old demographic. Retailing categories are commonly video rental stores, concert promoters, delivery services and restaurants, among others. All of this makes college student credit cards sound fairly irresistible, until you take a closer look at the fine print.

Remember, that 0% introductory APR is just that -- introductory. After a six-month period, the APR more often than not rockets up to anywhere from 17-18%, among the highest rates available on top-ranked credit cards. It's very easy in six months (and especially on a limited college budget) to become used to letting your credit card debts slide a bit. After all, a college credit card is there for you when you don't have other money handy, right? But many times young people often find to find that their steadily increasing debt rather is rapidly becoming unaffordable. Add that to the general problem of typically low income, student loans, as well as regular, unavoidable cash needs in the form of textbooks, dorm and cafeteria fees. And let's not forget about a social life! You can begin to see the problem with unwise use of credit cards for college students.

This is not to say that college student credit cards are necessarily bad things. Handled properly and in conjunction with an otherwise good academic performance, a college credit card can be a valuable asset to you in the future. A college credit card can provide proof in the event of a credit or employment check that you're financially responsible and worthy of being trusted with the loan you might need in order to buy a house or a car a few years down the line.

And, as long as you do the research, there's no reason not to take advantage of some of the rewards programs college credit cards offer, or even to show a little school spirit with your credit card design. But the cardinal rule here is to show financial responsibility. Draw up a budget and stick to it. Even if it means scaling back on a few planned purchases or some trips to local clubs, it's better to go without a little bit of pleasure now rather than face heavy APRs and overwhelming debts later.

And, let's be frank ... if you're too worried about your ability to stick to a budget, consider waiting a few years before applying for a college student credit card. Credit cards aren't going anywhere, and you'll be able to find many of the same great offers later, once you have the financial wherewithal to deal with some of the hidden pitfalls.

by : mailo berz

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