MyCardBlog

You may have many credit cards and they all have different credit card numbers. How do our credit card companies define the credit card numbers?
Specifications for credit card numbering have been drawn up by the International Standards Organization (ISO/IEC 7812-1:1993) and the American National Standards Institute (ANSI X4.13).

The first digit of your credit card number is the Major Industry Identifier (MII), which represents the category of entity which issued your credit card. Different MII digits represent the following issuer categories:

For example, American Express, Diner’s Club, and Carte Blanche are in the travel and entertainment category, VISA, MasterCard, and Discover are in the banking and financial category, and SUN Oil and Exxon are in the petroleum category.

The first 6 digits of your credit card number (including the initial MII digit) form the issuer identifier. This means that the total number of possible issuers is a million.
Some of the better known issuer identifiers are listed in the following table:

The final digit of your credit card number is a check digit, akin to a checksum. The algorithm used to arrive at the proper check digit is called the Luhn algorithm, after IBM scientist Hans Peter Luhn (1896-1964), who was awarded US Patent 2950048 (”Computer for Verifying Numbers”) for the technique in 1960. The most succint description of the Luhn algorithm is: “For a card with an even number of digits, double every odd numbered digit and subtract 9 if the product is greater than 9. Add up all the even digits as well as the doubled-odd digits, and the result must be a multiple of 10 or it’s not a valid card. If the card has an odd number of digits, perform the same addition doubling the even numbered digits instead.”

For American Express, digits three and four are type and currency, digits five through 11 are the account number, digits 12 through 14 are the card number within the account and digit 15 is a check digit.
For Visa, digits two through six are the bank number, digits seven through 12 or seven through 15 are the account number and digit 13 or 16 is a check digit.

For MasterCard, digits two and three, two through four, two through five or two through six are the bank number (depending on whether digit two is a 1, 2, 3 or other). The digits after the bank number up through digit 15 are the account number, and digit 16 is a check digit.

Let’s analyze a sample number of 4408 0012 3456 7890 to see whether it is a valid credit card number.
The Major Industry Identifier (MII) is 4 (banking and financial), the issuer identifier is 440800 (a VISA partner), the account number is 123456789, and the check digit is 0. Let’s apply the Luhn check to 4408 0012 3456 7890. (4*2)+4+(0*2)+8+(0*2)+0+(1*2)+2+(3*2)+4+(5*2-9)+6+(7*2-9)+8+(9*2-9)+0 = 8+4+0+8+0+0+2+2+6+4+1+6+5+8+9+0 = 63, which is not a multiple of 10. Therefore we conclude that the number 4408 0012 3456 7890 is an invalid credit card number.

Try to use a valid credit card to verify the numbering, and you will see that the first 6 digits match the card issuer and the final digit always makes the result from Luhn algorithm to be a multiple of 10.

Steve sent me an email during last weekend talking about his earnings from some banks in the past 6 months. He said he was not aware of so many opportunities of sign-up bonuses. He just jumped some popular deals and really enjoy his earning:

BOA MyAccess Checking plus “Keep the Change” program: $100+$180 (accumulated via playing paypal and paying small bills)

Chase Free Checking: $125 (using ING to make direct deposit);

ING: $25+$10 ($25 is sign-up bonus and $10 for 1 referral.);

American Express Starwood Preferred Guest Card: 10,000 bonus points ($100 Amazon gift card);

Chase Freedom Card: $50;

Citi Business Card with ThankYou Network: 15,000 ThankYou Points ($150 Shell gift card)

Citi CashReturns Card: ~$200 cash back in 3 months;

Total amount is $740+$200

Thanks Steve!

Brad is my lab mate and he is extremely interested in using App-O-Rama (AOR) to earn some free money. After a little bit research across the internet, he finally launched his mini business AOR last week and sent me a copy of his result.

Credit Score is around 750
Stated Income: $100k
Sole Proprietorship (using SSN# as ITIN)
Years in business: 0
Income: $0

Current Cards..................Type......Limit

Citibank Dividend Platinum.......Personal...$13k

Chase Freedom Card...............Personal...$7k

WaMu Platinum Card...............Personal...$16k

American Express Blue Cash.......Personal...$11k

Total..........................................$47k

Cards applied for...................................Status

Citi Business Card with ThankYou Network............Approved

Citi Professional Card with ThankYou Network........Approved

Citi Business/AAdvantage MasterCard.................Declined

Chase Business Platinum.............................Approved

Chase Business Rebate...............................Approved

Chase Business Cash Rewards Visa....................Declined

Discover Business...................................Declined

Discover Business Miles.............................Approved

CapitolOne Visa Business Platinum...................Approved

Business Platinum with Preferred No Hassle Miles....Declined

AMEX Blue Cash for Business Card....................Approved

AMEX Starwood Business Card.........................Approved

Advanta Platinum Business Card with Rewards.........Approved

I can’t imagine how much free money and sign-up bonuses he can get for this mini business AOR. He said this AOR wasn’t well prepared but he liked results so far. He has moved much of the new credit line to his high rate saving account. Since the business report is hidden from his personal report, he is planning to launch his personal AOR soon.

Not all credit card are the same. Many of decent cards come with special cash back and rewards programs that will give you rewards for part of your purchases. However, these cards are designed to give us special rewards in a certain (Obviously, they can’t cover all of them.) A smart way to maximum your rewards is to use your credit cards in a combination way—choose a credit card for a certain category. We can categorize our daily expenditure into 4 categories: Gas and Auto Related, Grocery/Drugstore, Dinning/Entertainment and General Purchases. One credit card in each category is necessary.

1. Gas and Auto Related: Discover Open Road (Student Version is available) : You can get 5% cash back on gas and auto maintenance expenses. You can start to redeem your rewards from $20. The most intriguing part is you can redeem $25 store gift card if you decide not to cash out the $20. If you really need gift cards, the actual rewards is higher than 5%!

American Express SimplyCash Business Card: You can get 5% (3% NOW) cash back at gas stations without any limit. The cash back will be credited into your account automatically every month. Plus you can get 5% cash back on office supplies and wireless services.

BP Visa Rewards Card: You can get 10% cash back at BP pumps in the first 60 days and 5% cash after that. Plus you can get 2% cash back on dinning and travel (4% for the first 60 days). If you use BP a lot, this might be your gas card.

Although there are other credit cards offering about 5% cash back (Chase Perfect Card) on gas for about 12 months, they are not counted in. Because you may want to stick to a credit card to accumulate your rewards as quickly as possible. (see this post)

2. Grocery and Drugstore: Chase Freedom Card: this card will give you 3% cash back in your 3 top spending categories. The 3 categories is chosen automatically from 15 categories.

You can also consider the Citi Diamond Preferred Rewards Card or Citi Dividend Platinum Select Card. They will give you 5% cash back at supermarkets, drugstores ans gas stations for 12 months.

3. Dinning and Entertainment: Citi Professional Card: 3% cash back on purchases made at restaurants, gas stations, certain office supply merchants, and for auto rentals.

Discover More Card: The 5% cash back categories will change quarterly. You have to register every 3 months in order to get the 5% cash back. If you choose gift cards in stead of cash, you actual earning is higher than 5%!

If you are a college student, the Citi mtvU card is highly recommended! (See this post)

4. General Purchases: An American Express card is highly recommended here! The excellent costumer service and additional warranty make the American Express cards top choice for large purchases like laptops. Suggested American Express Cards: Blue from American Express or Blue Cash from American Express, or you can also think of Starwood Preferred Guest Card which is offering 10,000 bonus points now. The Citi CashReturns Card is also a good choice if you prepare your spending carefully. You can get unlimited 5% cash back on everything for the first 90 days. A check will be mailed to you if you accumulate more than $50 on that card.

I think a list of credit cards that are relatively easy to get will be helpful to those who are with limited credit history or about to build their credit history.

Student cards are usually the easiest to get. The credit card issuers will not ask your annual income and they do not care your credit history—because you’re about to build your credit. However, you must have to be a student. The credit card issuers sometimes may require you to prove them that you are a student (You can fax your transcript.). Some brand credit cards/store cards like: Amazon.Com Visa Card, BP Visa Card, Starwood Preferred Guest Card etc are usually easy to get. The reason behind this is those merchants want to promote their brands. Those cards usually give you better rewards. In this way, they expect you can shop with them more. Another way to earn money, right? For other cards, you need to have limited and clear credit history. For example, if you have a credit card for 6 months and use it smartly (balance/limit ratio is less than 48%). You can probably try Chase Freedom Card. Or you can also consider Blue/Blue Cash from American Express. In order to reach more potential card members, credit card issuers will promote one or two credit cards to their consumers and those cards are usually easy to get.

Student Cards:

Citi mtvU Platinum Select Visa Card for College Students

Citi Dividend Platinum Select Card for College Students

Discover Student Card

Student Visa Platinum Plus from BOA

Consumer Cards:

Blue Cash from American Express

Blue from American Express

Chase Freedom Credit Card

Starwood Preferred Guest Credit Card

Rewards American Express Card

Citi Dividend Platinum Select Card

Citi Diamond Preferred Rewards Card

Citi Platinum Select/AAdvantage World MasterCard

Business Cards:

Citi Business Card with ThankYou Network (As far as I know, this is one of the easiest business card to get. If you got approved recently, please let’s know.)

Blue Cash for Business Credit Card (New)

Starwood Preferred Guest Business Credit Card

Discover Business Card (If you have a business, this is easy to get.)

If you don’t know how to apply for business credit cards, you can search on my blog to find out the answers. Don’t worry, just give it a try!

Everyone wants to save money or get freebies by using credit cards. Thus a good combination of credit cards is necessary to maximum your rewards. My post “My Favorite Rewards Credit Cards” turned out to be one of hottest articles several weeks ago. Hereby I found an article about rewards credit card from MSN Money. Let’s see what’re best rewards credit cards in experts opinion. (But, believe me, you might disagree with their opinions. At least, I don’t think they’re “real experts”.)

With the right cards, you can earn good rebates or free travel, or add money to a savings account. But which cards get you the most freebies? Here’s a list from the experts. By Liz Pulliam Weston

Yes, it’s wonderful to get free stuff — travel, cash back, money for college — just by using your credit card.

But with so many rewards programs out there, it’s hard not to second-guess your choice. Have you got the best card? Are you using it to its best advantage? Could you get more from a different one? And the fact is that some rewards programs are better—much better—than others.

To sniff out the best ones, I asked five credit card industry experts — Curtis Arnold of CardRatings.com, Bill Hardekopf of LowCards.com, Ron Lieber of FiLife, Justin McHenry of IndexCreditCards.com and Ben Woolsey of CreditCards.com — and frequent-flier guru Randy Petersen of WebFlyer to nominate their favorite plastic in three rewards categories:

• Travel programs. These generally offer the richest returns but only if you get the right card and know how to use it. If you’re an infrequent traveler or not looking for upgrades, a different card might be a better fit.

• Cash Back programs. These are a good, simple choice for many, and the best rebate 1.5% or more of your purchases.

• Savings programs. This category encompasses a variety of cards that help you put aside money in an investment plan, pay down your mortgage or get discounts on major purchases such as cars.

I also asked the experts to reveal which cards they use for their own spending. Interestingly, two of the six were taking advantage of special offers not widely available to the public — as if you needed anything more to fuel your paranoia that you weren’t getting the best deals. More on that here.

I broke the results down into winners, runners-up and worthy alternatives. In each case, the winner and the runner-up are almost interchangeable; either choice will put you in good stead. The alternatives aren’t exactly also-rans, but they typically trail the best in the ease of earning or redeeming rewards.

And the winners are:

Travel

The winner: Starwood American Express.

The runner-up: Diners Club MasterCard.

Worthy alternatives: American Airlines AAdvantage MasterCard, United Mileage Plus Visa, Choice Privileges Visa, Citi PremierPass Elite MasterCard.

…………………………………………..

Cash back

The winner: American Express Blue Cash.

The runner-up: Chase Freedom Visa.

Worthy alternatives: Citi Professional Cash MasterCard, Discover Motiva.

……………………………………..

Savings

The winner: Fidelity Investments 529 College Rewards American Express.

The runner-up: Citi UPromise MasterCard.

Worthy alternatives: GM Flexible Earnings MasterCard, NestEggz Visa.

………………………………………

The full report about this can be found at MSN.Com.

In the yesterday’s post, I have said that:

Given the current state of banks, we have enough reasons to believe that they will shift the aim from mortgages to other risky products. Not to mention that more than 60% Americans carry balance on their at least two credit cards every month. If you are not a profitable customer to them, you are also in the queue. In the next few months, if the credit card issuers close you credit card account or reduce your credit limit without notifying you, don’t be surprised. I also strongly suggest you guys not play AOR recently.

I also included a yahoo article. (see here)

In today’s Wall Street Journal, I find out a similar article about credit card issuers will tighten their credit standards.

Credit Cards Are Playing Harder to Get (WSJ, by Jane Kim)

The credit crunch is starting to hit consumers where it hurts — in their wallets.

As lenders tighten credit standards, many consumers have faced greater difficulty getting a mortgage or a home-equity loan or line of credit. Now, some are beginning to feel the squeeze on their credit cards — despite the dramatic cuts the Federal Reserve recently made in its benchmark Fed funds rate, including last week’s half-percentage point cut to 3%.

Big card issuers such as Citigroup Inc. are requiring higher credit scores before issuing new cards, particularly in states that have been hit hard by the housing downturn, including California, Arizona and Florida. Some lenders, including Bank of America Corp., are offering lower initial credit lines. Other lenders, such as Capital One Financial Corp., are limiting credit-line increases or reducing credit lines for existing customers if they see signs that they are suddenly applying for more credit or are having trouble paying down their balances. And many card issuers are raising late fees and other charges to help offset what they see as higher risk.

The stricter lending standards come as many banks recently reported earnings and disclosed surprisingly large losses from their consumer businesses. Among the problems: higher credit-card delinquencies and losses. The banks expect the problems to get worse as the economy slows.

A new survey of senior bank-lending officers, released yesterday by the Federal Reserve, found that of 41 banks, four, or 10%, said they have tightened standards for approving credit-card applications from individuals in the past three months. That’s up from 5% in a survey conducted in October…….(Read the full story at forum or visit wall street journal).

As an effort to promote the communication with my readers and provide a forum for us to discuss specific topics, I set up a forum at mycardblog. You can access to the forum at www.mycardblog.com/forum. This forum is dedicated to discuss personal finance. I think it’s also a good way to expand your knowledge about money management. I think this forum will also cover some topics that I don’t post here at my blog. Another advantage of forum is all the members can bring latest news, deals and ideas. In this way, you can get the latest information as soon as possible. Anyway, thank you for your support!

Below is a screen shot of the forum:

Another important news I want to put here is ” Banks Are Going to Close Accounts of Risky Customers”.

Given the current state of banks, we have enough reasons to believe that they will shift the aim from mortgages to other risky products. Not to mention that more than 60% Americans carry balance on their at least two credit cards every month. If you are not a profitable customer to them, you are also in the queue. In the next few months, if the credit card issuers close you credit card account or reduce your credit limit without notifying you, don’t be surprised. I also strongly suggest you guys not play AOR recently.

Here is the report from Yahoo.

Reuters: Web bank Egg withdraws cards from riskier customers

LONDON (Reuters) – Egg, the Internet bank owned by Citigroup, will withdraw credit cards from 161,000 customers following a risk review, a spokesman for Egg said on Saturday.

The company has given seven percent of its credit card customers 35 days’ notice that it was ending their card agreements, he said.

“The credit profiles of affected customers had deteriorated between the time they joined Egg and the acquisition (by Citigroup) in May,” Egg said in a statement. “The decision to end these customers’ agreements was taken after conducting a one-off, extensive risk review of our (customers)…”

The move marks another example of how banks are revising their lending criteria amid the credit crunch.

Earlier this week, Britain’s Financial Services Authority said in an annual review that UK banks face their toughest conditions since the 1990s due to escalating consumer defaults.

The customers affected will not be able to use their Egg credit card once the notice period has ended, although they can continue to make minimum monthly repayments or pay up in full.

“Egg is not asking for immediate repayment of balances or making any changes to their current terms and conditions or interest rates,” the company said.

Citigroup bought the business from Prudential in May, 2007.

(Reporting by Gavin Haycock)