Credit and Debit Card Benefits & Confirming Advantages
Credit and Debit Card Benefits
Credit Cards:
- Acquisition of goods and services
- Cash access at bank branches and ATMs
- Free insurance included in the credit card contract
- Limited liability in case of loss or theft
- Detailed monthly statements of account activity
Debit Cards:
- Access to cash from current, savings, or credit accounts (multiple accounts can be linked)
- Balance inquiries and recent account activity review
- Transfers between linked accounts
- Cash, ticket, or check deposits
- PIN changes
- Other services like show/concert tickets and travel assistance insurance
Credit Card Payment Options
Total Payment:
The entire account balance from the previous month’s transactions is paid in full. The credit is then fully restored.
Deferred Payment Percentage:
A percentage of the credit limit is paid off each month. A minimum payment, usually one percent, is required.
Fixed Monthly Payment:
The customer repays a fixed amount monthly, agreed upon based on the credit limit and a minimum amount.
Confirming: Benefits for Banks, Customers, and Suppliers
Confirming is a service where a bank manages a client’s (typically a medium to large enterprise) supplier payments for a commission.
- A contractual relationship exists between customers and suppliers, often an order. The company informs the bank of irrevocable orders for its suppliers.
- The bank notifies suppliers that it has received a payment order in their favor for a specific date.
- The bank offers the supplier the option to receive immediate payment (with or without customer funds at maturity) in exchange for interest.
Benefits to the Bank:
- Customer loyalty through a comprehensive service
- Potential increase in customer base by informing suppliers of payment options
- Increased income from operations
Customer Benefits:
- Reduced administrative and financial tasks
- Strengthened relationships with suppliers
Benefits for Suppliers:
- No default risk, as the bank guarantees payment
- Elimination of traditional costs (stamps, commissions, etc.)
- Improved balance sheet by deducting advance billing balances