HRM 3400 Lecture Notes - Lecture 16: Charge Card, American Express, Magnetic Stripe Card
23 May 2018
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HRM 3400 Lecture 16 Notes – Credit, Charge, Debit, p-, and Smart Cards
Introduction
• Many online shoppers use credit and charge cards for most of their Internet purchases.
• A credit card, such as Visa or MasterCard, has a preset spending limit based on the
user’s redit history, ad eah oth the user a pay all or part of the aout oed.
• Interest is charged on the unpaid amount.
• A charge card, such as American Express, carries no preset spending limit, and the entire
amount charged to the card is due at the end of the billing period.
• Charge cards do not involve lines of credit and do not accumulate interest charges.
• American Express became the first company to offer disposable credit card numbers in
2000.
• Other banks, such as Citibank, protect the consumer by providing a unique number for
each transaction.
• Debit cards look like credit cards, but they operate like cash or a personal check.
• Credit, charge, and debit cards currently store limited information about you on a
magnetic strip.
• This information is read each time the card is swiped to make a purchase.
• All credit card customers are protected by law from paying more than $50 for
fraudulent transactions.
• A p-card (procurement card or purchasing card) is a credit card used to streamline the
traditional purchase order and invoice payment processes.
• The p-card is typically issued to selected employees who must follow company rules and
guidelines that may include a single purchase limit, a monthly spending limit, or
merchant category code restrictions.
• Due to an increased risk of unauthorized purchases, each p-ard holder’s spedig
activity is reviewed periodically by someone independent of the cardholder to ensure
adherence to the guidelines.
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