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Top Eight Things You Didn't Know About Your Credit Card

by ncoles   July 08, 2011 at 7:00AM  |  Views: 4,177
4. You Are Not Required to Present ID to Complete a Transaction

Photo: Inti St. Clair/Digital Vision/Getty Images

You're at the supermarket checkout and it comes time to pay. You kindly present your credit card and the snarky sales assistant snaps back, "ID." While most people begrudging present their driver's license, trying to repress the feelings of being treated like a criminal, it is not actually a requirement of credit card companies to have retailers confirm your identity. In fact in some states it's illegal for merchants to request your ID. All the major credit companies have this policy. Here's what VISA has to say:

"Although Visa rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance. Therefore, merchants cannot refuse to complete a purchase transaction because a cardholder refuses to provide ID. Visa believes merchants should not ask for ID as part of their regular card acceptance procedures. Laws in several states also make it illegal for merchants to write a cardholder's personal information, such as an address or phone number, on a sales receipt."

This is Mastercard's terms of agreement:

"A merchant must not refuse to complete a MasterCard card transaction solely because a cardholder who has complied with the conditions for presentment of a card at the POI refuses to provide additional identification information, except as specifically permitted or required by the Standards ."

So if you don't want to show your ID, don't. If the merchant refuses to accept your card, you can complain directly to the credit card company knowing you are in the right.

3. The Expiration Date is a Fallacy

Photo: Comstock/Getty Images

Stop the presses. Your credit card doesn't actually expire. The expiration date is erroneous and theoretically your card could live on for eternity. Now that's credit card bliss. There are two reasons credit cards actually have an expiration date. The main one being credit card companies believe the magnetic strip on a card will have worn out in three to four years. Credit cards do take a lot of abuse, especially when they are swiped several times a day, every day of the year, so it's probably a good thing they get a makeover. The credit card companies also use the so called expiration date as an additional security measure.

When your card does "expire" all the credit card company does is send you a new card with the exact same credit card number on it. The only thing different on the card is, you guessed it, the expiration date. The problem these days is your credit card is likely to be the victim of fraud before it ever theoretically expires.

2. You Can't Sue Your Credit Card Company

Photo: Jim Arbogast/Digital Vision/Gett Images

If you have a beef with you credit card company don't even contemplate suing them. You can't. A "common clause in most user/member agreements is that the cardholder waives their right to sue the credit card company." Yep, that little legal nugget is hidden in the user agreement (which is the size of War and Peace) that came with your card. Now you say, "But I didn't sign anything." Well, that doesn't matter. Once you sign and swipe that card you are effectively signing the user agreement.

If you do want to take legal action against your credit card company the cardholder must go through a binding arbitration hearing with the company. This "no suing clause" also prevents people from participating in a class action suits against credit card companies.

1. Your Credit Card Number is Actually a Carefully Constructed Algorithm

Photo: Don Farrall/Digital Vision/Gett Images

Your credit card number is much more than just gateway to a big television, fancy vacations and gas for your vehicle. It's also an algorithm than proves whether the card is real or not. The last digit of the card is known as the "checksum" and is used to validate the card using the Luhn algorithm. The math trick is relatively straight forward and is simple enough to calculate in your head. Here's how it works.

  1. Take the number of any credit card.
  2. Double every second digit starting from the right.
  3. Add these new digits to the remaining, un-doubled digits.
  4. The result should be divisible by 10. If it's not, it's a fraudulent credit card.

Nifty, right?