Bank Credit Cards

Why do consumers use bank credit cards

• safety
• benefits
• purchases can be made without actually having the cash
• some companies do not accept personal cheques

Why do business accept bank credit cards

• No risk of default (credit card company gaurantees payment)
• Once a transaction is completed the cash is deposited directly into the business’ bank account
• bank credit cards are a poplar payment method

Important

These are treated as cash sales.

In return for processing the drafts, the bank charges the store a fee (% of the credit card sales). The store treats this as ana expense and records it

Dec 25	Visa Discount Expense		$16.25
		Cash		$16.25
	To record Visa Fee