What’s on a CREDIT CARD?

Each component of a credit card serves an important function to different stakeholders in the lifecycle of a card
transaction. Understanding these digits, elements, and technologies, as well as their purpose and Payment Card
Industry Data Security Standard (PCI DSS) requirements, can help organizations of all sizes optimize their payment
stack, strategy, and compliance posture.

 Important: Variations between cards The Payment Card Industry Security Standards Council (PCI SCC)
created the PCI DSS to abstract the differences between card brands, such as format, placement, and
terminology, to standardize a security framework. Despite this, many inconsistencies remain that can be
frustrating. For example, American Express places its 4-digit security code on the front of the card, while
Visa's 3-digit security code is on the back. What’s important to know is the security code and the role it plays
in the payment lifecycle.
What’s account data?
Account data refers to the information presented or embedded in a physical card. Together, this data
provides the necessary information to route and verify payment information with various parties throughout the
transaction lifecycle.
For the purposes of PCI DSS compliance, it’s important to know that account data breaks down into two
subsets that we’ll explain in the following sections:
 Cardholder Data (CHD)
 Sensitive Authentication Data (SAD)

Figure 1 FRONT AND BACK OF CREDIT CARD

Breaking down Cardholder Data (CHD)
Cardholder data (CHD) consists of the full Primary Account Number, or the 16-digit card number (or 15-digit
for American Express), Expiration Date, Cardholder Name, and Service Code. With the proper controls in place, this
card information can be stored-on-file. When combined with the necessary authorization request, doing so allows
merchants to reinitiate transactions.
What’s a Primary Account Number (PAN)?
You can think of a Primary Account Number (PAN) as a mailing address. Each digit in the 15-to-16-digit
string helps processors, networks, and issuing banks find your account among the hundreds of millions of
cardholders.
 The PAN comprises three main parts—one of which has a sub-part. Hierarchy below:
 Primary account number
o Bank Identification Number
o Major Industry Identifier (MII)
 Account Identifier
 Validator digit

Figure 2 FRONT OF CREDIT CARD

What are the Bank Identification Numbers (BIN) and Major Industry Identifiers (MII)?
The Bank Identification Number (BIN), or Issuer Identification Number (IIN), is the first six to eight digits in the PAN.
It routes payment instructions to the correct network and its member bank or credit union.
The Major Industry Identifier (MII) is the first digit of the BIN and PAN. In a nutshell, it indicates to processors which
card brand (e.g., Visa, Mastercard, American Express, or Discover) to send the payment for further processing.
While there are 10 MII, as you see below, there are likely only four you need to know.
0: ISO/TC 68 and other industry assignments
1: Airlines
2: Airlines and other industry assignments
3: Travel and entertainment (American Express)
4: Banking and financial (Visa)
5: Banking and financial (Mastercard)
6: Merchandizing and banking, financial or national assignments (Discover)
7: Petroleum
8: Healthcare, telecommunications, and other industry assignments
9: National assignment
The card networks use the remaining BIN digits to determine which financial institutions to route the transaction for
further processing.

What are Account Identifiers

An Account Identifier is a unique account number used by an issuing bank to identify a cardholder’s account. Going
back to our mail service analogy, you can think of your Account Identifier as your home’s unit number and street. It
ultimately tells the bank which ledger account it should debit or credit.

What’s the Validator Digit?

A Validator Digit, also known as a check digit, is a popular method for validating the accuracy of a long string of
preceding numbers.
In the context of payment card processing, the Validator Digit is used to ensure the accuracy of the PAN. For
example, if a customer mistakenly enters a ‘2’ instead of a ‘3’ at check out, the validator digit would be incorrect,
indicating that the number is invalid. This is a great way to catch small inconsistencies upfront before they reach the
networks (and reduce the strain on the systems that support them).

What is a Service Code?

PCI DSS defines the Service Code as, a
“Three-digit or four-digit value in the magnetic stripe that follows the expiration date of the payment card on
the track data. It is used for various things such as defining service attributes, differentiating between international
and national interchange, or identifying usage restrictions.”
For example, a service code tells a merchant and processor whether to process the card as a debit or credit card.

Breaking down Sensitive Authentication Data (SAD)

The Sensitive Authentication Data (SAD) contains information used to verify transactions and prevent abuse. Unlike
CHD, SAD cannot be stored and must be immediately deleted after authorization (unless you’re an issuer).
As it pertains to the information on your card, SAD is comprised of the security code (or Card Verification Code or
Value), EMV chip, and a subset of information found in the magnetic strip. Let’s dig in briefly on each.

Understanding 3-digit and 4-digit Security Codes

A Card Verification Code (CVC) or Value (CVV) is the 3-digit that is printed on the back of a payment card or a 4-
digit code printed on the front (i.e., American Express). As noted, this security code cannot be stored on the
magnetic stripe or EMV chip of the card, but why?
While it doesn’t seem like much, requiring the CVC or CVV for card-not-present transactions helps verify that your
card is in your possession. Were your card ever compromised with your CVV, attackers would have free reign to use
your card anywhere.

What’s in the EMV chip and magnetic strip?

EMV stands for Europay, Mastercard, and Visa—the original developers of the technology. The technology has
since been adopted by other payment card networks and is now a global standard for payment card security.
The EMV chip is a small, microprocessor-based integrated circuit that is embedded into a payment card. This differs
from the traditional magnetic strip, which stores cardholder data and some verification logic as static data. Whereas
the information embedded in the magnetic strip will never change during its lifetime, the EMV chip generates a
unique code for each transaction. This makes it much more difficult for fraudsters to capture and use cardholder data
in a fraudulent transaction.
The magnetic strip has been around for ages and contains both CHD and SAD (for card-present purchases). Per our
previous comment, the SAD data found inside the mag stripe cannot be stored by merchants.

Frequently asked questions about credit card numbers

 What's the difference between a CVC and CVV?

The Card Verification Code (CVC) or value (CVV) are different terms used by Visa and Mastercard to refer to the
same 3-digit or 4-digit security code on a plastic card. Both are considered sensitive authentication data and cannot
be stored by merchants. This security code adds another layer of protection for card-not-present transactions,
ensuring those without your physical card can’t easily use it for other online purchases.

 What’s the difference between a service code and a security code?

A service code is a set of three digits embedded into the magnetic strip that provides information about the card and
how it can be used. A security code (aka CVC or CVV), on the other hand, is a unique string used to verify the
authenticity of a transaction. This code is typically located on the back of a payment card and is not embossed on
the card itself, making it a bit more difficult for bad guys to obtain.

 Credit Cards: The Pros and Cons

Credit cards often get a bad reputation, but the truth is they can be a key financial tool if used responsibly. Here are
some of the top advantages and disadvantages to consider before you add a shiny new card to your wallet.

 Advantages

 Convenience: You don’t have to worry about how much cash you have on hand. Just remember that
you can always use a debit card instead. With a debit card you won’t be in danger of accumulating debt
that will be subject to high interest charges if you don’t pay it off each month, like you would with a
credit card. Remember to keep track of your checking account balance to be sure you can cover what
you’re buying.

 Recordkeeping: A credit card provides a useful record of your spending through your monthly
statement and online account, which would also be the case if you relied on a debit card for spending.
Some credit cards do send yearend summaries, though, that can be a great resource when you’re
doing your taxes.

 Low-cost loans: You’re getting your paycheck in five days, but there’s a purchase you need to make
today. You can charge your purchase now and pay off the charge after you get paid. The key here is to
make sure you will be able to pay off the charge by the due date.

 Cash advances: You can get money when you need it. Be aware that cash advances often have a
higher interest rate, so it’s important that you have a realistic plan to pay back those advances.

 Member perks: With some smart shopping, you can choose from a wide range of discounts or cash
back based on your purchases. Compare the cards available to see which perks best fit your needs
and spending habits.

 Build a good credit history: Using a line of credit by making purchases—and paying them off on time—
will help you get a good credit rating from credit rating agencies, which will make lenders more likely to
lend to you and offer you a good interest rate.

 Purchase protection: Your credit card may step in to help if you want to dispute a charge or return a
defective product. While a debit card may offer similar protection, you will have to wait until the issue is
investigated before getting your money back.

 Disadvantages

 Temptation: Since they’re so easy to use, they also make it easy to overspend.

 Interest charges: If you buy something and don’t pay it off immediately, you will end up paying not only
the purchase price but also the interest charge on that item. In other words, if you carry a balance, all
your purchases will end up costing you a little more.

 Fees: Some accounts have annual fees. There may also be fees for cash advances, along with high
interest rates. In addition, you may spend more on interest and fees than you earn in discounts or cash
back. Make sure the benefits outweigh the costs.
 Monthly scrutiny: You must review your bill each month to confirm that it accurately reflects your
purchases and that there aren’t any signs of fraudulent use of your card. Credit cards are a prime target
for scammers.

 Tricky short-term teaser rates: A low interest rate may seem like a good deal, but many people are
surprised to find that the rate was only temporary. If you don’t read the fine print, you may pay far more
in interest than you expected.
What’s on a CREDIT CARD STATEMENT?
1. Account Information

This section will have the basics of your account and should include:

A. Your name and mailing address. Make sure everything is exactly right, including spelling, so it’s correctly
reported to the credit bureaus.
B. Your account number. This can be the entire account number or just the last four digits.
C. The dates of the billing cycle. Be aware that any purchases you’ve made after the closing date of the billing cycle
won’t appear on your statement until the following month’s bill. If you check your statement online, it will show
any pending or new charges as they’ll appear on the following month’s bill. The dates of your billing cycle help
determine how your interest is calculated.

2. Account Summary
This section summarizes any transaction information on your card like purchases, payments and other fees.

A. Payment due date. Issuers are required to have your due date be the same day of the month each month and
provide 21 days, at a minimum, to make a payment after that month’s statement closes.
B. Payments and credits. If you made any payments or received credits to your account, it will be reflected on your
statement.
C. The total amount of your overall balance. This is how much you owe to pay off your bill in its entirety.
D. Other fees. If you were charged a late fee, over the limit fee, foreign transaction fee or a balance transfer fee, it
will also be noted on your statement.

3. Purchases

You should see a detailed list that accounts for each time you used your card to make a payment. This will include:

A. The date you used your card. Sometimes the posted date may be a day later than the actual transaction date.
Your statement may show you both dates, or just the posted date.
B. Vendor name. Some vendors may do business under a different name than what you might see on their site or
store. If you see an unfamiliar name, you can call the number on the back of your card and ask them for more
information.
C. Merchant category. This would say something like “Groceries” or “Travel.” All vendors that accept credit cards are
assigned something called an MCC code, which identifies the type of establishment it is. If you have a rewards
card, this code is how your card “knows” if you used your card at a place that pays elevated rewards.
D. The amount charged to your card. Note that for dining charges, sometimes you will see two separate
transactions—one for the bill and one for the tip.
4. Payment Information

Your statement will also provide information on any balance you’ve accrued. This includes:

A. The total credit card balance. This is the total amount that is currently charged to your credit card. If you pay off
this amount, your card will have a $0 balance.
B. The minimum payment amount due. This is usually calculated as a percentage of your balance or a percentage
plus interest and fees. If the total amount of your balance is minimal, you may be charged either a fixed amount,
usually $25 to $35, or be asked to pay the balance in full if what you owe is even less than the fixed amount. If
possible, aim to pay more than the minimum amount due each month.
C. A calculation on how long it will take to pay off your balance. Issuers are required to show you how long it will
take you to pay off your total balance if you only make only the minimum payments every month. Most also show
you how much faster you’d pay it off and how much you’d save if you paid an amount greater than the minimum
amount every month.
D. Available credit. This is how much credit you have left on the account until you reach the limit. If possible, aim for
using 30% or less of your available credit, otherwise it can have an adverse impact on your score.
E. Total interest and fees paid this year. Your issuer is required to show you how much in interest or fees you’ve
paid so far that year.

5. Account Fine Print

There should be a long section of fine print that contains the following information:

A. Contact information. This should include how to contact your issuer by phone, postal mail and online.
B. Your basic rights as a cardholder. These sections will include the acceptable ways to make payments, notice that
your account information is reported to the credit bureaus and what to do if you believe there is a mistake on your
account.
C. Interest rate explanation. There should be a paragraph explaining how that particular card calculates any interest
fee on the portion of your balance subject to finance charges. There should also be a separate section explaining
how to avoid paying interest charges, the summary of which is pay your balance in full and on time every month.

6. Interest Charges

This part shows the APRs for the different ways you might use your card including:

A. Purchases. Most credit cards have variable APRs, so this may have shifted a bit since the original number you
were approved for based on any movements in the Prime Rate. Variable APRs move up and down in tandem
with changes in the Prime Rate.
B. Cash advances. Most cash advances come with an APR much higher than the one on purchases. For this
reason, it’s almost always better to try and utilize other ways to get cash than to take a cash advance on your
credit card.
C. Balance transfers. If you’ve made any balance transfers to the card, you’ll see what the interest rate is you’re
paying on the amount you’ve transferred. Typically the APR is the same as the rate you have for purchases,
 unless you’re taking advantage of an introductory 0% APR offer for balance transfers. This section should also
show the expiration date of your balance transfer offer.

7. Rewards

If you have a card that earns cash back or other rewards, there should be a summary of your activity for the billing
cycle. You’ll typically see:

A. Rewards balance prior to this month. This is all of the rewards you have banked prior to this billing cycle.
B. Rewards earned this period. This will reflect any rewards earned during the most recent billing cycle.
C. Rewards redeemed.
D. Amount available for redemption. The only thing better than earning rewards is redeeming them and here you’ll
see how much you can cash in. However, with some travel rewards cards, there may be better ways to redeem
your rewards than for the redemption options shown, such as transferring Chase Ultimate Rewards to airline and
hotel partners.