Credit Cards - what exactly happens when you use your credit card in a shop

In summary, credit cards are a system that enables banks to file information on what you buy and see what your tastes are, to help services or organizations better tailor their advertising to you. They are also a way for stores to encourage repeat customers and to track people's buying habits in case they decide to sue.
  • #1
JPC
206
1
Hey

I have to make a small presentation on how credit cards are part of a system that enables to file you (like see what your tastes with what you buy, ect).

So, anyone know any good websites or can give me any information on the technical parts ?

Like how services or organization , can find information about you (from your credit card) ?
Like what exactly happens when you use your credit card in a shop, or on internet ?
ect ect
 
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  • #3
I believe credit cards are protected by privacy laws that prevent third parties from looking at your purchases and targeting you with ads.

"Discount cards," on the other hand, like those used in most grocery stores, have no such legal protection (in fact, the agreement you sign permits them to do anything they wish with the data).

- Warren
 
  • #4
chroot said:
"Discount cards," on the other hand, like those used in most grocery stores, have no such legal protection (in fact, the agreement you sign permits them to do anything they wish with the data).

I was thinking the same thing about department store credit cards.
 
  • #5
That's probably also true, Greg. However, that's an agreement you make with that one specific store, because your transactions go through it's computers. The general public doesn't have access to that data.

- Warren
 
  • #6
chroot said:
"Discount cards," on the other hand, like those used in most grocery stores, have no such legal protection (in fact, the agreement you sign permits them to do anything they wish with the data).

- Warren

Indeed, that's the whole point of those discount cards. Since anyone and everyone can get one, and there's no fee to get them, it would have been cheaper for the store to just put stuff on sale without spending so much money on printing cards...if they weren't using the data to track people's buying habits to better tailor their advertising.
 
  • #7
Well, they also encourage repeat customers.
 
  • #8
russ_watters said:
Well, they also encourage repeat customers.

Needing to buy groceries does that. :biggrin: It might have worked that way when they first came out, but when every store has a card, and everyone has a keychain full of them, I don't think it's particularly effective at that anymore.
 
  • #9
Hey, and can welfare agencies use them ?

like if someone who had a heart problem had a heart attack, and the angency sees that that person has purshased 20L of beer in one week, and so decides not to pay because that person acted irresponsibly
 
  • #10
JPC said:
Hey

I have to make a small presentation on how credit cards are part of a system that enables to file you (like see what your tastes with what you buy, ect).

So, anyone know any good websites or can give me any information on the technical parts ?

Like how services or organization , can find information about you (from your credit card) ?
Like what exactly happens when you use your credit card in a shop, or on internet ?
ect ect
I was a network consultant at one of the two big Credit Card companies for a while. You won't find this information easily because Credit Card companies are tied by strict banking laws. It Doesnt matter if its a "branded" credit card or not. Visa, MasterCard Amex ,etc actually only sell a connectivity and consolidation service. The Banks hold most of the information on you. The Banks actually own the Credit Card companies as well, which prompted MasterCard to go Public (only a proportion of its shares) as they are all treading on legal issues with regards to colluding. (How can competing banks own both the largest credit card companies and expect fair competition). So to increase consumer confidence in the brand they went public and opened their financial records.
 
  • #11
JPC said:
like if someone who had a heart problem had a heart attack, and the angency sees that that person has purshased 20L of beer in one week, and so decides not to pay because that person acted irresponsibly

There was a case when i lived in the US, a customer at a big name store slipped in the store and was suing them for $<very large amount> from their loyalty card system they found he had bought a large amount of alcohol and threatened to use that in court if he sued.
His lawyers "took the store to the ****ing cleaners" (to use a legal phrase) for threatening this.
 

1. What exactly is a credit card?

A credit card is a small plastic card that allows you to borrow money from a bank or financial institution to make purchases. You are required to pay back the amount you borrowed, along with interest and other fees, at a later date.

2. How does a credit card transaction work?

When you use your credit card to make a purchase, the merchant sends a request to the credit card company to verify that you have enough available credit to cover the purchase. If the transaction is approved, the credit card company pays the merchant on your behalf and adds the amount to your credit card balance.

3. What happens if I don't pay my credit card bill on time?

If you do not pay your credit card bill on time, you may be charged a late fee and your credit score may be negatively impacted. Additionally, interest will begin to accrue on the unpaid balance, making it more expensive to pay off your debt.

4. How is interest calculated on credit card transactions?

Interest on credit card transactions is usually calculated as a percentage of your outstanding balance. The interest rate, also known as the annual percentage rate (APR), can vary depending on your credit score and the terms of your credit card agreement.

5. Are there any benefits to using a credit card?

Yes, there are several benefits to using a credit card. They offer convenience and security, as you do not need to carry large amounts of cash with you. Additionally, many credit cards offer rewards programs, such as cash back or travel points, which can save you money or provide other perks.

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