Credit rewards | apply card | cards credit

Credit rewards | apply card | cards credit

Credit rewards | apply card | cards credit

Credit cards History: the use of credit cards lunched in the United States during 1920, when a few companies, such as hotel chains and oil companies, issued credit card to their customers for purchases made at their businesses. The use increased dramatically after World War II in1945.

The first universal credit card which could be used at a variety of stores and businesses was lunched by Diners Club, Inc., in 1950. With this system, the credit-card company charged cardholders an annual fee and billed them on a monthly or yearly basis. Another major universal card   was established in 1958 by the American Express company (ie.  "Don't leave home without it!").

Bank credit-card system came later. The first national bank plan was brought by BankAmerica, which was started on a statewide basis in California in 1959. This system was licensed in more states in 1966, and renamed Visa in 1976.

Other major bank cards, including MasterCard, formerly Master Charge also followed. In order to offer expanded services, such as meals and lodging, many smaller banks that earlier offered credit cards on a local or regional basis formed relationships with large national or international banks.

Credit cards physical Size: A credit card is a thin plastic card, usually 7.9375 cm by 5.3975 cm in size, which contains identification information such as a picture or signature, and authorizes the people named on it to charge purchases or services to his account, charges for which he will be billed periodically. Now a day, the information on the card is read by automated teller machines (ATMs), store readers, and bank and Internet computers.

Kinds of Cards: There are mainly two kinds of cards namely credit card and debit card. By credit card one can purchase from stores called merchants, the price of which is payable at the end of the month through the affiliated banks as per notification. On the other hand, debit card is based on immediate payment system whereby one has to insert card into the ATM located at the key spots in the city. And so it is often called electronic purse. For debit card one has to have an account in a bank while credit card does not necessitate any such provision.

Credit Cards rewards: Credit card is a great financial tool; it is like a magic tool. Credit card can be more convenient to use and carry than cash, and they offer valuable consumer protections. Paper money and coin are risky and burdensome for carrying. One can avoid the toll of finger-counting changes in this system. Dollars, Pounds or Taka can be plundered, lost or stolen. But there is no such fear for card. The cardholder is given a code number called PIN (Personal Identification Number) without which the card cannot be used at sales or services points where the PIN is required. Only the owner of the card will be entitled to use it. In case the card is stolen or lost the clients' bank will issue a fresh card.

Credit card holders Criteria for apply: Every bank has their own array of criteria for the apply credit card  by which the qualification of an applicant is assessed. The criteria may be income range, social status, place of living, education, designation etc. It's quite natural that if the selection criteria for members are more flexible then their clients would be more. On the other hand, if the selection criteria are more conditional and harsh then its operation would be limited. The conditions must be friendly to consumers.

Credit cards in Bangladesh:

Credit card of Standard Chartered Bank: Standard Chartered Bank, took a pioneering role in introducing credit card in Bangladesh. It started acquiring Visa and MasterCard nearly 10 years ago. In the beginning, its operational area was very small and concentrated only on the large hotels and restaurants. In 1997 the bank decided to launch full-scale card operation and very realistically brought a wide range of people under its service system. Now they are giving a wide range of card services through multifarious quality facilities in Bangladesh.

They have Visa Silver, MasterCard Silver and MasterCard Gold card. MasterCard Gold is targeted to high-end customer based, who have a higher income. Silver cards have lower credit limits. The minimum income requirement for Silver is TK. 10,000 BDT per month and for Gold is TK. 55,000 BDT per month. The income of the applicant along with other financial data is the preliminary consideration in deciding the limit of credit. Standard Chartered Bank offers air travel accidental insurance to its cardholders and this is maximum of TK. 100,000BDT for Silver and a maximum of TK. 500,000BDT for Gold. The bank has ATM machines in Dhaka, Chittagong and khulna, Barishal, Rajshai ,Sylhet, also all the big city in Bangladesh. Several more new machines will be installed in all important towns. Standard Chartered Bank has initiated for the cardholders' benefit that a cardholder can withdraw maximum 50% of his card's limit in cash on 30% interest. Earlier a cardholder could withdraw only 20% of his card limit on the same interest.

Prime Bank: Prime Bank lunched their credit card in November 1999. They have Gold International and Gold Local, and Silver International and Silver Local. For a Silver Card one must have income range over TK. 10,000 BDT and for a Gold Card a person is to have earning minimum TK. 55,000 BDT. Prime Bank inserts the client's photograph on the credit card. When a cardholder receives his monthly statement, he can either choose to pay in full or just the minimum due amount shown on the statement. No interest is charged if he pays in full within the payment due date. There are many sorts of service charges like - annual fee, additional fee, replacement fee, late payment fee, excess limit penalty, etc. If a cardholder accumulates 20,000 Prime Bank Bonus Points for his Gold Card or 10,000 Bonus Points for his Silver Card in a year then he will enjoy card facilities without fee ($ 1 purchase equivalent to 1 Bonus Point). If a cardholder accumulates 10,000 Prime Bank Bonus points for Gold Card or 8,000 Bonus Points for Silver Card in a year then he will enjoy Card facilities without fee. (TK. 50 BDT purchase equivalent to 1 Bonus point). The highest Prime Bank Bonus Point Holder can enjoy free air ticket of Dhaka-Bangkok-Dhaka (Business Class). The bank has already listed about 3,500 members for their cards. An official of the bank preferring anonymity said introduction of any good thing like credit card is better but its practical use in our market places invites a lot of troubles because of malpractices. After all Prime Bank is doing a great job for their customer in Bangladesh.

National Bank: National Bank lunched their credit card in October 1997. Like Prime Bank they have Gold International and Gold Local and Silver International and Silver Local. For Silver Card one must have an income of minimum Taka 12,000 and for Gold Card a person must have an earning of TK 50,000 BDT per month. But in some cases it is relaxed, for example, a high-ranking government official may achieve a Gold Card though he does not fulfill the condition of income. It is now dealing with more than 6,000 clients.

VANIK: VANIK, a Bangladesh-Sri Lanka joint venture financial organization, has been rendering credit card services in Bangladesh since 1998. It has already crossed the mark of issuing 6,000 credit cards within a couple of years. Now it is covering only Dhaka city and it has a plan to spread its services all over Bangladesh.

VANIK issues two-type of credit cards. Namely, “Gold” and “Classic”. The minimum income requirement for Classic is TK. 10,000 BDT per month and for Gold is TK. 50,000 BDT per month. For the Gold Card TK. 3,000 BDT is to be paid as annual fee while TK. 1,500 BDT for the Classic. Interest per month is 2.5% on carried forward amount for both the cards. Depending on the requirement of a client, one could either settle his outstanding balance in full by the date given in his statement or has the flexibility of paying only 1/12th of the outstanding balance in installment. Whatever method he chooses he can enjoy an interest free credit period of maximum 45 days. The validity of both cards is one year from the date of issuance.


Ready Cash Card of Janata Bank: The Ready Cash Card (debit card) was first introduced in Bangladesh by Janata Bank in October 1999. The Ready Cash cards are used as an alternate to cash transaction. The bills of telephone, electricity, WASA is brought under the card payment system. People can pay the gas bill by Ready Cash Card.

Smart Card of Grameen Bank: Grameen Bank has introduced its own version of credit cards for rural people of this country. 'Smart card' is one of its credit card will provide facilities like banking, utility and insurance to members of the Bank's micro-credit programme. At the very beginning, a point of sale (POS) terminal device will be installed at various sites across the country, where rural people live. The users will be able to use 'smart card' to facilitate their business and other needs what usually the credit card users enjoy in cities.

Limitations: There are many business centers which do not give card facilities causing troubles to the cardholders in Bangladesh. The most disadvantage of the card is that all the people wishing to be cardholders cannot enjoy card facilities because of ceiling-touch income bracket along with other criteria, only a certain section of people fulfilling criteria can be cardholders. It is also for the low income of the people of Bangladesh.

Defaulter: There are a number of credit cardholders who do not give the money to the bank after finishing the card limit. In this case, the banks fall in troubles and expansion of credit cards is naturally discouraged. Again, there are some people who try to take illegal advantage over credit cards.