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CREDIT
CARD NEWS YOU CAN USE™
Updated daily by Frankford Financial ©2007 All Rights Retained. Unauthorized
duplication strictly prohibited.
Credit Card Technology
A credit card system is a type of retail transaction settlement and credit system, named after the small plastic card issued to users of the system. A credit card is different from a debit card in that the credit card issuer lends the consumer money rather than having the money removed from an account. Most credit cards are the same shape and size, as specified by the ISO 7810 standard.
Standards for financial and identity cards are set out by ISO. All
credit cards and debit cards, and most ID cards, are the same shape
and size ID-1 as specified by the ISO 7810 standard:
ID-1 = 85.60_53.98 mm (= 3.370 _ 2.125 in)
ID-2 = 105_74 mm (= A7)
ID-3 = 125_88 mm (= B7)
A smartcard or smart card is a tiny secure cryptoprocessor embedded within a credit card-sized or smaller (like the GSM SIM) card. Smartcards follow specifications set out in ISO 7816, and contactless smart cards follow the ISO 14443 specification
How Credit Cards Work
A credit card user is issued the card after approval from a provider (often a general bank, but sometimes from a captive bank created to issue a particular brand of credit card, such as American Express Centurion Bank), in which they will be able to make purchases from merchants supporting that credit card up to a pre-negotiated credit limit. When a purchase is made, the credit card user indicates their consent to pay, usually by signing a receipt with a record of the card details and indicating the amount to be paid. More recently, electronic verification systems have allowed merchants (using a strip of magnetized material on the card holding information in a similar manner to magnetic tape or a floppy disk) to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. Some services can be paid for over the telephone by credit card merely by quoting the number embossed onto the card (the credit card number), and they can be used in a similar manner to pay for purchases from online vendors.
Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, and the total amount owing. The cardholder must then pay a minimum proportion of the bill by a due date, and may choose to pay more or indeed pay the entire amount owing. The credit provider charges interest on the amount owing (typically, a fairly high rate much higher than most other forms of debt). Typically, credit card issuers will waive interest charges if the balance is paid in full each month, which allows the credit card to serve as a form of revolving credit. Revolving credit can be any of the following:
1. A credit agreement that allows consumers to pay all or part of the outstanding balance on a loan or credit card. As credit is paid off, it becomes available again to use for another purchase or cash advance.
2. A line of credit that may be used repeatedly up to a specified total, with periodic full or partial repayment.
3. A type of credit which allows a borrower to withdraw funds up to a preapproved credit limit. Credit cards are most often the type of revolving credit borrowers use. Borrowers make payments based only on the amount they've actually charged to their revolving account/credit card, plus interest.
4. Typical of a line of credit or credit card in which the amount of available credit increases and decreases as funds are borrowed and then repaid.
5. A consumer credit line that can be used up to a certain limit or paid down at any time.
As well as profits through interest, card companies charge merchants fees for money transfer. When the companies formally or informally prevent these fees from being passed on to credit card users but instead require them to be spread among all customers, this raises the possibility of a harmful market imperfection through the mechanism of the Tragedy of the commons, especially as some credit providers give their users incentives such as frequent flier miles or gift certificates. Australia is currently acting to reduce this by allowing merchants to apply surcharges for credit card users. Credit card companies generally do provide a guarantee the merchant will be paid on legitimate transactions regardless of whether the consumer pays their credit card bill. However, credit card companies generally will not pay a merchant if the consumer challenges the legitimacy of the transaction and will fine merchants who have a large number of chargebacks.
The credit card was the successor of a variety of merchant credit
schemes. The concept of paying merchants using a card was invented
in 1950 with Diners Club's invention of the charge card, which is
similar but required the entire bill to be paid with each statement.
Credit card service was first offered in 1951. A charge card is similar
to a credit card, except that the charges made to it must be paid-off
each month, rather than having revolving credit which carries a balance
forward. Many people are not aware of this distinction however, and
often interchangeably use "charge card" to describe any card which
can be used as payment, or "credit card" for
any credit or charge card. Governments and large businesses often
use charge cards to pay and keep track of expenses. Some high-end
retailers like Neiman Marcus issue charge cards to customers. American
Express and Diners Club cards are also charge cards, rather than credit
or debit cards like VISA and MasterCard. In recent times, credit card
portfolios have been exceedingly profitable to banks, largely due
to the booming economy of the late nineties. However in the case of
credit cards, such high returns go hand in hand with risk.
Secured credit cards
A secured credit card is a special type of credit card in which you must first put down a deposit between 100% and 150% of the total amount of credit you desire. Thus if you put down $1000, you will be given credit in the range of $500-$1000. This deposit is held in a special savings account. The owner of the secured credit card is still expected to make regular payment, as he or she would with a regular credit card, but should he or she default on a payment, the card issuer can deduct payments on the card out of the deposit. Secure credit cards are an advantage to anyone with poor or no credit history. They are often offered to people as a means of rebuilding one's credit. Secured credit cards are available with both Visa and MasterCard logos on them.
Features
As well as convenient, accessible credit, the cards offered consumers
an easy way to track expenses, which is necessary both for monitoring
personal expenditure and the tracking of work-related expenses for
taxation and reimbursement purposes. They have now spread worldwide,
and are offered in a huge variety of permutations with differing credit
limits, repayment arrangements (some cards offer interest-free periods,
while others do not but compensate with much lower interest rates),
and other perks (such as rewards schemes in which points "earned" for
purchasing goods with the card can be reclaimed for further goods
and services).
In addition, some countries such as the United States limit the amount
that a consumer can be held liable for fraudulent transactions, which
shifts the liability to the merchant. This encourages the use of credit
cards for electronic and mail order transactions, collectively called "card not present" transactions.
For further security, some banks are offering one-time numbers for
use in these transactions. They have spread far and wide beyond their
initial market of the wealthy businessman and are now ubiquitous amongst
the middle class of most Western countries.
Security
The relatively low security of the credit card system presents many opportunities for fraud. However, this does not imply that the system is broken. The goal of the credit card companies is not to eliminate fraud, but to reduce it to manageable levels, such that the total cost of both fraud and fraud prevention is minimised. This implies that high-cost low-return fraud prevention measures will not be used if their cost exceeds the potential gains from fraud reduction. This opportunity for fraud has created a black market in stolen credit card numbers, which must generally be used quickly before the cards are reported stolen.
Three improvements to card security are being introduced to the more
common credit card networks at the time of writing. An additional
3-4 digit code is now present on the back of most cards, for use in "card not present" transactions.
The on-line verification system used by merchants is being enhanced
to require a 4 digit Personal Identification Number (PIN) known only
to the card holder, and the cards themselves are being replaced with
similar-looking tamper-resistant smart cards which are intended to
make forgery more difficult. The majority of smartcard (IC card) based
credit cards comply with the EMV (Europay Visa MasterCard) standard.
The 3-4 digit numbers for use in "card not present" transactions are
to be found in different places on the various cards, and are referred
to differently by the card issuers:
American Express: 4 digits long, printed on the front side of the
card above the number, referred to as the CID, or Card Identification
Number.
Mastercard: last 3 digits of the number printed on the back signature
panel of the card, referred to as the CVC, or Card Validation Code.
Visa: last 3 digits of the number printed on the back signature panel
of the card, referred to as the CVV, or Card Validation Value.
A personal identification number (PIN) is a numeric value that is used in certain systems to gain access, and authenticate. PINs are a type of password. Ignorance of the expansion of the acronym often leads to the erroneous usage PIN number, in which the accidental repetition of the final word is sometimes referred to as RAS syndrome.
PINs are (ideally) only known by the person whose PIN it is, and are sufficiently hard to guess. The PIN should be such that a person or computer cannot guess it in sufficient time by using a guess and check method, where it guesses the PIN, and checks for correctness by testing it on the system that the person is attempting to gain access to.
PINs are most often used for ATMs. Throughout Europe the traditional in-store credit card signing process is being replaced with a 'Chip and PIN' system, where the customer is asked to enter their PIN code instead of signing. They are also sometimes used for online systems instead of alphanumeric passwords, which may compromise security. (See password for more details)
Most commonly PINs are 4-digit numbers in the range 0000-9999 resulting in 10,000 possible numbers, so that an attacker would need to guess an average of 5000 times to get the correct PIN.
In 2002 two PhD students at Cambridge University, Piotr Zielinski and Mike Bond, discovered a security flaw in the PIN generation system of the IBM 3624, which was duplicated in most later hardware. Known as the decimalization table attack, the flaw would allow someone who has access to a bank's computer system to determine the PIN for an ATM card in an average of 15 guesses.
History of Credit Cards
Credit cards as we know them today (particularly in the U.S.) began
in the 1950s. In 1950, Diner's Club came into being and was the first
credit card; it was followed shortly thereafter by American Express.
Bank of America created the BankAmericard in 1958, a product which
eventually evolved into the Visa system. MasterCard came to be in
1966 when a group of credit-issuing banks established MasterCharge.
There are now countless variations on the basic concept of revolving credit for individuals (as issued by banks and honored by a network of financial instituations), including organization-branded credit cards, corporate-user credit cards, store cards and so on.
Controversy
There is some controversy about credit card usage in recent years. Credit card debt has soared in recent years, particularly among young people. The major credit card companies have been accused of targeting a younger audience, in particular college students, many of whom are already in debt with college tuition and loans. Credit card usage has tripled since 2001 amongst teen-agers as well.
Since the late 1990s, lawmakers, college officials, consumer advocacy groups, and higher education practitioners, have become increasingly concerned about the rising use of credit cards among college students. A recent study has shown that both the number of students owning a credit card as well as the amount of credit card debt held by students has risen in the last couple of years. Since eighteen year-olds in most states are eligible for a card without parental consent or employment, many have been concerned that students will use credit unwisely because of their financial inexperience and suffer the long-term consequences of carrying high debt.
Some Credit Card Companies have pursued legal judgments against borrowers,
garnishing wages and forcing sales of homes, adding in the cost of
legal fees, often exceeding the original balance several times. This
practice has encouraged numerous class action lawsuits seeking redress
for borrower's rights.
Credit card numbering
The numbers found on credit cards have a certain amount of internal structure, and share a common numbering scheme.
The card number's prefix is the sequence of digits at the beginning of the number that determine the credit card network to which the number belongs. The card number's length is its number of digits.
The prefixes and lengths for the most common card types are:
American Express, 34 or 37 prefixes, 15 length
BankCard, 560-561 prefixes, 16 length
Diners Club / Carte Blanche, 300-305, 36, or 38 prefixes, 14 length
Discover Card, 6011 prefixes, 16 length
JCB, 35 prefixes, 15 or 16 length
MasterCard, 51-55 prefixes, 16 length
Visa, 4 prefixes, 13 or 16 length
In addition, the first 6 digits of the credit card number are known as the Bank Identification Number (BIN). These identify the institution that issued the card to the card holder. A Bank Identification Number is the first six digits of a credit card, debit card, charge card, etc. These digits identify which network the card belongs to as well as which bank issued it.
Some credit card issuers choose to restrict the card numbers they
issue to those which pass a checksum test, where the final digit of
the card number is used to confirm the initial digits. This has two
benefits of preventing casual attempts to invent credit numbers (only
one in ten will be valid), and also prevent mistakes when the card
number is manually recorded. The checksum test for credit card numbers
is the Luhn formula.
Smart Cards History
Smart cards were invented and patented in France by Roland Moreno
in the 1970s. Their first mass usage was payment in the French payphones
starting from 1983 (TÈlÈcarte). The second one was the integration
of a microchip into all French debit cards (Carte Bleue).
Contact smartcard
The ISO/IEC 7816 series of standards define:
• the physical shape of the smart card
• the positions and shapes of its electrical connectors
• the communications protocols and power voltages to be applied to those
connectors
• the functionality
• the format of the commands sent to the card and the response returned
by the card
The cards do not contain a battery; power is supplied by the card
reader. In a contact-type smart card, the chip can be recognised by
an area of gold-plated contacts about 1 cm2 close to the short side
of the card. Normally the contact communication is relatively slow
(9.6-115.2 kbit/s). There is currently a trend towards implementing
USB 1 on these contacts (up to 10 Mbit/s), but there is not yet a
final standard.
ISO 7816:5 defines numbering for ISO 7816 smart cards. An application identifier (AID) consists of an Registered Application Provider Identifier (RID), identifying the vendor, then a Proprietary Application Identifier Extension (PIX), identifying the application offered by the vendor. A RID can be either assigned by the ISO/IEC 7816-5 Registration Authority (TDC Services A/S), or be an ISO 7812 IIN followed by FF hexadecimal.
Contactless smartcard
A second type is the non-contact type called contactless smart card, where the chip communicates with the card reader through wireless self-powered induction technology (106-424kbits/s).
The standards for the contactless protocol for smart cards are ISO/IEC 14443 (type A and B) from the year 2001. There have been proposals for ISO 14443 type C, D, E and F that have yet to be accepted by the ISO standards committee. An alternative standard for contactless smartcard is ISO 15693.
An example of a widely used contactless smartcard is Hong Kong's Octopus card, which predates the ISO/IEC 14443 standard. For use on public transportation, Malaysia introduced the Touch 'n Go smartcard in 1997, Paris introduced the Calypso card in October 2001, and London introduced the Oyster card in January 2004.
A related contactless technology is RFID (radio frequency identification) that in certain cases can be used for similar applications to contactless smartcard such as for electronic toll collection. RFID generally do not include writeable memory or microcontroller processing capability as contactless smartcard do.
There are dual-interface cards that implement contactless and contact interfaces on a single card with some shared storage and processing. An example is Malaysia's multi application smartcard identification called MyKad that uses both contact Proton and contactless Mifare (ISO 14443A) chips.
Applications
The applications of smartcards include their use as credit or ATM cards, SIMs for mobile phones, authorization cards for pay television, high security identification and access control cards, public transport tickets, etc.
Smart cards may also be used as electronic wallets. The smart card chip can be loaded with electronic money, which can be used to pay parking meters, vending machines, and merchants. Cryptographic protocols protect the exchange of money between the smart card and the accepting machine. Examples for this are Proton, GeldKarte, Moneo and Quick.
Smartcards have been advertised as suitable for these tasks, because they are engineered to be tamper resistant. The embedded chip of a smart card normally implements some cryptographic algorithm. Information about the inner workings of this algorithm can be obtained if the precise time and electrical current required for certain encryption or decryption operations is measured. A number of research projects have now demonstrated the feasibility of this line of attack. Counter measures have been proposed.
Another problem of smart cards may be the failure rate. The plastic card in which the chip is embedded is fairly flexible, and first time users are insufficiently careful with their card. Smart cards are often carried in wallets or pockets, which is a fairly harsh environment for a chip. However, for large banking systems, the failure managenent cost is more than compensated by the fraud cost reduction.
Collectible credit cards
A growing field of numismatics, or more specifically Exonumia, credit card collectors seek to collect various embodiments of credit from the now familiar plastic cards to older paper merchant cards, and even metal tokens that were accepted as merchant credit cards. Early credit cards were made of celluloid, then metal and fibre, then paper and are now mostly plastic.
Debit Cards
A Debit card is a ISO 7810 card which physically resembles a credit card, and, like a credit card, is used as an alternative to cash when making purchases. However, when purchases are made with a debit card, the funds are withdrawn directly from the purchaser's checking or savings account at a bank.
Online and offline cards
Two different types of debit cards are in use today: online and offline. Online debit cards use the same underlying technology as ATMs (bank machines) that dispense cash; authentication may consist of the use of a numeric PIN (personal identification number) known only to the cardholder. PINs can be used only where the POS (point of sale) terminal is properly equipped; in particular, a separate keypad is needed to allow the customer to enter his or her PIN and select the account from which funds should be drawn. This is the only method used in some countries, particularly Canada.
Offline debit cards carry the logotypes of, and can be used in a manner nearly identical to, major credit cards (e.g. Visa or MasterCard). The use of a debit card in this manner may have a daily limit, with the maximum limit being the amount of money on deposit. A debit card used in this manner is similar to a secured credit card.
"Credit" and "debit" purchases
Some POS terminals allow the user of a Visa or MasterCard debit card
to choose whether the purchase is a "credit" or "debit" purchase. In a "credit" purchase, the user signs a charge slip (as in a traditional credit card purchase); in a "debit" purchase,
the user enters a PIN. In either case, the user's bank account is
debited.
In some countries-with some merchant service organisations, (as of
this writing) a "credit" transaction is without cost to the purchaser while a small fee may be charged for "debit" transactions (often absorbed by the retailer, however). Other differences are that "debit" purchasers may opt to withdraw cash in addition to the amount of the debit purchase; also, from the merchant's standpoint, the merchant pays lower fees on a "debit" transaction as compared to "credit" transactions.
The fees charged to merchants on "credit" debit card purchases-and the lack of fees charged merchants for processing "debit" debit
card purchases and paper checks-have prompted some major merchants
to file lawsuits against debit-card transaction processors such as
Visa and MasterCard. Visa and MasterCard recently agreed to settle
the largest of these lawsuits and agreed to settlements of billions
of dollars.
Many consumers prefer "credit" transactions because of the lack of a fee charged to the consumer/purchaser-and many POS terminals at PIN-accepting merchant locations now make the "credit" function
more difficult to access.
Chip and pin
In many countries, the use of PIN validated transactions with smart-card chip readers is being strongly encouraged by the banks as a method of reducing cloned-card fraud; to the extent that cardholder-present transactions will soon not be possible in these countries without knowledge of a PIN, and the POS terminal reading the smart-card chip on the card.
Popularity
Debit cards, and secured credit cards, are popular among college students who have not yet established a credit history. There are also forms of debit cards (e.g. Visa Buxx) that are purchased by parents for teenagers as young as 13. The parent retains a great deal of control over the child's use of the cards.
Debit cards are also similar to stored-value cards in that they represent a finite amount of money owed by the card issuer to the holder. They are different in that stored-value cards are generally anonymous, while debit cards are generally associated with an individual's bank account. Debit cards usually offer some protection against loss, theft, or unauthorized use while stored value cards usually do not.
A stored-value card represents money on deposit with the issuer, not unlike a debit card. One major difference between stored value cards and debit cards is that debit cards are usually issued in the name of individual account holders, while stored value cards are usually anonymous. The term stored-value card is usually a misnomer, as most indicia of the cards' value are maintained on computers affiliated with the card issuer.
The value associated with the card can be accessed using a magnetic stripe embedded in the card, on which the card number is encoded; using radio-frequency identification (RFID); or by entering a code number, printed on the card, into a telephone or other numeric keypad.
Typical applications of stored-value cards include:
Transit system "farecards"; Gift cards; Telephone prepaid calling
cards.
Transit system farecards are popular with passengers because they eliminate the need to fumble with money when entering (or exiting) buses, subway trains, etc.
Many transit system operators have implemented farecards because they can accurately track system usage; they are useful for charging different fares depending on the distance traveled; they can automatically discount fares for seniors and persons with disabilities; and passengers can in some cases replace them if they are lost, stolen, or damaged.
Gift cards have all but replaced gift certificates, can be purchased
in various values, and are good at various shopping, dining, and entertainment
establishments. They are usually anonymous and no refund is available
if they are lost or stolen. Also, issuers profit from the interest
or float that is earned between the time of purchase and the time
of use. Gift cards are sometimes referred to as "Closed Loop" cards
in the business as they can only be used at the merchant who issued
it.
A Store Value Credit Card is similar to a gift card. They feature
a credit card logo such as Visa or Mastercard and can, unlike gift
cards, be used anywhere a Visa or Mastercard me be used. They are
very similar to a debit or check card except that they don't require
a checking account to be issued one. They have been heavally marketed
as a safe and responsible means for parents to give their children
some spending power which is why they sometimes are referred to as
teen cards. "Closed Loop" card is a term sometimes used to describe
them in the business.
A credit score is a numerical index which represents an estimate of an individual's financial creditworthiness. Lenders, such as banks and credit card companies, use credit scores to determine credit limits and interest rates.
The best-known credit score in the United States is the FICO score calculated using mathematical formulae developed by the Fair Isaac Corporation. The three major American credit-report agencies (Equifax, Experian and Trans Union) all use variations on this scoring formula under different names, the best-known of which are the Beacon score and the Emperica score.
FICO scores and its variants are designed to measure the risk of default, by taking into account variables such as (in decreasing order of importance):
• punctuality of payment in the past,
• current ongoing debt,
• length of credit history,
• types of credits used,
• amounts of credits applied for in the recent past.
Current income and employment history do not influence the FICO score.
FICO scores range from about 300 to 850 and exhibit a right-skewed
distribution with a median around 725. A score above 720 is considered
to be "good credit", and a score below 600 is considered to be poor.
The Innovators of Credit Cards
American Express (NYSE:AXP ) is a diversified global financial services company headquartered in the United States. The company is mainly known for its credit card and charge card business. It is also a large player in the travel services, mutual fund, brokerage, financial advisor, and insurance businesses.
Company headquarters are in New York City. The current CEO is Ken Chenault, who took over in 2001. The company was led by Harvey Golub from 1993 to 2001 and prior to that it was headed by James D Robinson III from 1977 to 1993.
The company's common stock trades on the New York Stock Exchange under the ticker symbol AXP. It is one of the 30 stocks that comprise the Dow Jones Industrial Average.
History of American Express
American Express was founded in 1850 by Henry Wells, William Fargo, and John Butterfield as an express business. In 1882, American Express launched its money order business to compete with the US Post Office's money orders. This product quickly spread to Europe where no such financial product existed. Sometime between 1888 and 1890, J. C. Fargo took a trip to Europe and returned frustrated and infuriated. Despite the fact that he was president of American Express and that he carried with him traditional letters of credit, he found it difficult to obtain cash anywhere except in major cities. Mr. Fargo went to Marcellus Flemming Berry and asked him to create a better solution than the traditional letter of credit. Mr. Berry created the American Express Travelers Cheque which was launched in 1891 in denominations of $10, $20, $50, and $100.
The Travelers Cheque established American Express as a truly international company and in 1915 they announced the establishment of a Travel Department and soon established its first travel agencies.
During the winter of 1917 the US suffered a severe coal shortage and on December 26th President Woodrow Wilson commandeered the railroads on behalf of the US government to move US troops, their supplies, and coal. Treasury Secretary William Gibbs McAdoo was assigned the task of consolidating the railway lines for the war effort. All contracts between express companies and railroads were nullified and McAdoo proposed that all existing express companies be consolidated into a single company to serve the country's needs. This ended American Express's express business. The result was a new company called the American Railway Express company formed in July 1918. The new entity took custody of all the pooled equipment and proprety of existing express companies (the largest share of which, 40%, came from American Express who had owned 71,280 miles of railroad lines, 10,000 offices, with over 30,000 employees).
American Express executives discussed the possibility of launching a travel charge card as early as 1946, but it wasn't until Diners Club launched their own card in March 1950 that American Express began to seriously consider the possibilitiy. At the end of 1957 American Express CEO Ralph Reed decided to get into the card business, and by the launch date of October 1, 1958 public interest had become so significant that they actually issued 250,000 cards prior to the official launch date. The card was launched with an annual fee of $6, $1 higher than Diners Club, to be seen as a premium product. The first cards were paper. It wasn't till 1959 that American Express began issuing plastic cards, an industry first.
In 1966 American Express introduced the Gold Card and in 1984 the Platinum Card, clearly defining different market segments within its own business, a practice that has proliferated across a broad array of industries. The Platinum Card was billed as super-exclusive, had a $300 annual fee. It was offered by invitation only to American Express customers with at least 2 years of tenure, significant spending, and excellent payment history.
In 1999 American Express introduced the Centurion Card or "black card" catering
to an even more affluent and elite customer segment. It charged a
$1,000 annual fee, with a variety of exclusive benefits. Also, in
1999 the company introduced a marketing triumph, the American Express
Blue Card, a popular card among the young and techno-savy with its
multi-functional onboard chip.
During the 1980's American Express embarked on its dream to become a financial services supercompany. In mid-1981 it purchased Shearson Loeb Rhoades Inc the second largest securities firm in the US. In 1984 it purchased the 100-year old IDS company, bringing with it a fleet of financial advisors and investment products. Also in 1984, American Express acquired the investment banking and trading firm Lehman Brothers and added it to the Shearson family. When Harvey Golub took the reins in 1993 he negotiated the sale of the Shearson brokerage and in 1994 the sale of Lehman Brothers to part with a troubled brokerage and asset management business.
In April 1986 American Express moved its headquarters to the American Express Tower, the center of the world's most important new address, the World Financial Center. The 51-story building was an architectural triumph and noted as a significant and important addition to New York City. After the terrorist attacks of September 11, 2001. American Express had to leave its headquarters temporarily as the building was damaged during the attacks. It was located directly across the street from the World Trade Center complex. American Express tower became the backdrop to efforts in rescue, recovery, and reconstruction at the foot of Ground Zero. The company began gradually moving back into its rehabilitated building in the year of 2002.
Diversity
American Express received a 100% rating on the Corporate Equality
Index, "a tool to rate American businesses on how they are treating
gay, lesbian, bisexual and transgender employees, consumers and investors," released
by the Human Rights Campaign starting in 2004, the third year of the
report.
In addition, the company was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.
Diners Club International, originally founded as Diners Club, was formed in 1950 by Frank X. McNamara, Ralph Schneider and Alfred Bloomingdale. When it first emerged, it became the first independent credit card company in the world.
Foundation
While many stores and businesses were in the practice of extending credit to their customers, or allowing them to set up charge accounts, the revolutionary idea behind Diners Club was that the same card could be used to pay a variety of merchants. In 1950, the first Diners Club cards were given out to 200 associates of McNamara, mostly salesmen who often needed to dine with clients. At that time, Diners Club had signed up 14 restaurants in New York City. Membership grew quickly as both new customers applied for the card and more restaurants signed on. By the end of 1950, Diners Club had 20,000 customers and was accepted at over 1000 restaurants.
In 1952, McNamara sold his share of the company, which continued to grow unabated for several years, eventually signing merchants all over the United States. Their monopoly was short-lived, however, as the more generalized American Express and BankAmericard (later renamed VISA) arrived towards the end of the decade.
Diners Club expanded its customer base in Canada by acquiring the en route Card from Air Canada in the 1992, and marketed the card under the combined name for a period of time as the Diners Club/en route Card. Diners Club remains a minor player in Canada.
Today, Diners Club International is a part of Citibank, a unit of Citigroup, and has expanded its coverage to include all types of merchants instead of being limited to restaurants.
Carte Blanche
Carte Blanche was a minor credit card that was acquired by Citibank and phased out of service. In 2000, the Carte Blanche name was revived when Diners Club, which was also acquired by Citibank, introduced an upscale version of its card: the Diners Club Carte Blanche Card. It is an upper-level charge card on par with the American Express Platinum card. The card carries a US$300 annual fee and offers an extensive menu of perks geared toward affluent travelers. It is accepted wherever regular Diners Club cards are accepted.
Discover
Discover is a brand of credit card operated by Discover Bank, a subsidiary
of Morgan Stanley. It was originally issued by Sears and later spun
off into a separate company, which was acquired by the Dean Witter
financial services firm. It became a part of Morgan Stanley when that
firm bought Dean Witter Discover in 1997.
Japan Credit Bureau, usually abbreviated as JCB, is a credit card company based in Tokyo, Japan. Its English name is JCB Co., Ltd.
Founded in 1961, JCB established dominance over the Japanese credit card market when it purchased Osaka Credit Bureau in 1968. JCB cards are now accepted by 11 million merchants in 189 countries, and are commonly accepted at hotels and upscale shopping outlets in major cities around the world. JCB also operates a network of membership lounges targeting Japanese, Chinese, and Korean travelers in Europe, Asia, and North America.
In the United States, JCB is accepted primarily at businesses concerned with travel and hospitality (such as airlines, car rental companies, and hotels), but increasingly also at businesses such as department stores, gas stations, and Japanese specialty retailers such as Mitsuwa and Marukai. JCB accounts in the US are issued by Bank of the West.
MasterCard Incorporated is a membership organization owned by the
25,000 financial institutions that issue its card. MasterCard is also
the company's brand of credit cards. It was originally created as
Master Charge by the United California Bank (now part of Wells Fargo)
as a competitor to the BankAmericard issued by Bank of America. BankAmericard
is now the VISA credit card, issued by Visa International. In the
late 1990s, MasterCard merged with Access, in the United Kingdom and
the Ireland, and EuroCard, in Continental Europe, and quickly removed
the old names from cards, ATMs and in-store validators.
MasterCard also owns the Cirrus ATM (cash machine) network, plus the Maestro debit card network as well as the Master Money debit card in the United States, which competes against Visa International's more successful Check card.
Diversity
Mastercard was named one of the 100 Best Companies for Working Mothers
in 2004 by Working Mothers magazine.
Visa
Visa is a brand of credit card
operated by the VISA International Service Association of San Francisco,
California, USA owned by 21,000 financial institutions that issues
and markets its own Visa products. The VISA card was launched in 1976,
and the card was derived from the earlier BankAmericard issued by
Bank of America.
Internationally, BankAmericard was known by other names prior to the
introduction of the VISA brand for the network. The blue-white-gold
motif used by BankAmericard was also used for these cards. In the
United Kingdom, it was known as the BarclayCard, issued by Barclay's
Bank. In Canada, an alliance of banks (including Toronto-Dominion
Bank, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and
Bank of Nova Scotia) issued credit cards under the Chargex name. VISA
also operates the Plus ATM (bank machine) network.
The blue and gold in VISA's logo were originally chosen to represent
the blue sky and golden-colored hills of California, where Bank of
America was founded.
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