How credit card Shopping works:for those who r interested

Priya: I want to buy a Sony digital camera costing Rs.20,000, but I don't have any cash right now.

Raj: Why don't you use your ICICI Bank credit card? Never heard them say 'Hum Hain Na'

Priya: I am quite skeptic about using these cards. I pay using the card, get a bill after 30 days and pay after another 20 days. This is a maximum of 50 days interest free loan. Why does any bank do it?

If I borrow Rs.20,000 on personal loan at 11%.

Interest to be paid for 50 days = Rs. 20,000 * 11% * (50/365) = Rs. 301.40.

Here the bank is giving me a loan without interest when I use the credit card. Something is wrong somewhere!

Raj: Well, let me tell you how it works when you use your card to pay for the camera.
You present your ICICI Bank credit card , a VISA card. Sony World swipes your card on a machine provided by Citibank. Lets call Citibank, the acquirer bank and the process of Sony World swiping the card on that machine, requesting authorization . Citibank communicates with the card issuer, ICICI Bank through VISA Network to check if the card is valid and has the required credit limit. ICICI Bank reviews and approves / declines which is communicated back to Sony World. You sign a receipt called Sales Draft given by Citibank. This is the obligation on your part to pay the money to ICICI Bank. Data on this receipt can be captured electronically and transmitted.

At the end of day or at the end of some period Sony World chooses:

Sony World submits the receipt you signed to Citibank who pays Sony World the money. Sony World pays Citibank a fee called Merchant Discount .
Let us say this is 6% of the sale value = 6% * 20,000 = Rs. 1200

Citibank sends the receipt electronically to a Visa data center which in turn sends it to ICICI Bank. ICICI Bank transfers the money to a settlement bank which in turn transfers the funds to Citibank.

Citibank pays ICICI Bank an Interchange Fee of 4% of the sale value = 4% * 20,000 = Rs. 800

20 to 50 days later ICICI Bank gets the money from you, and you don't pay the interest!!

Priya: Interesting! So Sony World pays more than the interest that I should have paid for the loan that I take.
I, as a cardholder have the following benefits

1. Convenience of not having to carry cash.

2. Credit availability, free of interest.

However what benefits does Sony World get for paying so much money, Isn't it more profitable for them to take cash? They can save as much as Rs.1200.

Raj: Certainly. Some retail outlets offer you discounts if you pay by cash, don't they?
However when you don't count the money that you are spending, you tend to buy more! Cards encourage this is called impulse purchase .
If you did not have access to credit, you would not have bought the camera this month, or may be not any time soon either. By accepting cards, the merchant is actually extending you credit at the risk of the card issuer. He pays money to the banks to carry that risk.

Priya: So ICICI Bank uses this money to pay back to us when they announce 5% cash back. They insist that the Sales draft that I sign at the retailer should also be from ICICI Bank. This means they are saving on the Interchange Fee and also pay me a part of the Merchant Discount that they get.

Raj: Exactly! If you have noticed, ICICI Bank gives you the cash back in the next credit card statement. They keep the cash back money for a maximum of 60 days before passing on a part to you. This accrues them interest too.
Say if ICICI Bank earns an interest of 6% per annum for the cash they carry, they get Rs.1000 * 6% * (60/365) = Rs. 10
That is not huge, but money nevertheless. And when you consider that almost everyone in this city shops with a credit card these days, it is a big sum.

Priya: And that also explains why banks tie up with petrol pumps, like ICICI Bank has tied up with HPCL and I could re-fuel there without having to pay the fuel surcharge of 2.5%. The card issuer and the acquiring bank is the same and that saves interchange fees.

Raj: Good! You seem to have figured out how it all works! Let me summarize:

All the numbers used to explain concepts in this article must be treated only as an example. Merchant Discounts may vary from bank to bank. Interchange Fee is regulated by VISA and MasterCard.

My mother is visiting U.S

My mother ( Amma ) is in U. S now. She gone there to
see my sister and brother-in-law. It is my mother's first
overseas trip. She gone alone. She planned to spend six months there.

The photo's taken there, on that day snow was 22'' inches.

P E A R L S - Gemstone

I am going to buy Pearls, so made some study before that. The below
are my findings ..
P E A R L S

Pearl:

Almost all other gemstones are formed by mineral deposits that must be mined, cut, and polished to reveal their sparkling beauty. Pearls, on the other hand, are beautiful as they are - straight out of the oyster, high quality pearls have an intense, brilliant luster and shiny iridescence that are inherent in the pearl itself Pearls have become a symbol of wisdom and natural beauty Unique among gemstones in that they are natural, organic products of living creatures.
Three type mainly used in jewelry. Each type of pearl is produced by different species of Oyster and each Oyster lives in different region of the world under very specific climatic conditions.

1. Fresh water:

Freshwater pearls are best known for their wide range of shapes, sizes, and colors, and their attractive prices They are produced by the Hyriopsis cumingi mussels, which live in lakes and rivers in remote areas of China.

2. Salt water AkoyaAkoya:
pearls are treasured for their true roundness and reflective shine. They come from a small Japanese oyster that produces only one pearl at a time

3. Black South sea & TahitianTahitian:
pearls are the only pearls in the world that are naturally black. Rare, exotic, and luxurious, Black South Sea pearls are produced by the Pinctada margaritifera oyster, native to Tahiti and the French Polynesian islands

4. White South SeaWhite South Sea and Golden South Sea pearls are treasured for their luxurious size and brilliant satin luster. These valuable pearls are produced by the famous silver-lipped oyster, Pinctada maxima, along the coasts of Australia, Indonesia, and the Philippines.

Quality of Pearl determind by.,
1. Nacre ( Thicker ) Mother-of -pearl, the thicker the nacre, the higher quality the pearl is.

2. Luster ( Bright ) The luster of good quality pearls should be bright. Any pearl that appears too white, dull or chalky is of low quality.

3. Surface ( Cleanliness) The cleaner the surface of the pearl, the more valuable it is.

4. Shape A perfectly round pearl is very rare.

4.1 Ringed
4.2 Baroque
4.3 Drop
4.4 Button
4.5 Off -round
4.6 Round

5. Color

White,
Champagne,
Aqua,
Green,
Golden,
Black.
Fair Skin : Rose and White
Dark Skin : Cream & Gold

6. Size:
Pearls are measured by their diameter in millimeters. The average pearl sold today is between 6.5mm and 7.0mmType of Pearl:
Weight:Pearls are weighed by carats (1 pearl grain = 50 milligrams = 1/4 carat) and those weighing less than 1/4 grain are called seed pearls.

My mother got B2 - Tourism visa for US

My mother got B2 - Tourism visa for US today. I prepared all the documents and given some tips on answering the questions by Visa officers. My mother easily ran the show and got the visa on first attempt. Though there were cases
my mother witness, visa for some of the parents being rejected.

Interview appointment fixed on Aug 2005. The bad luck TTK services they were handling visa issuance in Chennai US Consulate not doing it now as the contract being given to VSS. Hence the prefrence given to whom come thru TTK Services was poor. Hence it took more than 2 hours for my mom though she wan in queue ahead of some body
who came via VSS.