Understanding Credit Card Numbers: Structure and Importance

Credit cards are an important financial solution to carry out easy and safe transactions. As per a report by Economic Times, by FY 2028-29, the number of credit cards is expected to reach 200 million (20 crores) in India. This reflects an increasing shift toward digital payments. It is the responsibility of the card owners to use their cards safely. Hence, the knowledge of a credit card number is important to use credit cards in the right way and prevent fraud. Keep reading to learn about the components of a credit card number and how to safeguard against misuse.

A credit card number is a distinct identifier given to a credit card. It is a series of numbers used to identify a specific credit card when processing transactions. Credit card numbers are allocated by financial institutions according to industry-specific guidelines.

This number enables the merchant, the bank, and the payment gateway to verify purchases to guarantee that funds are deducted from the correct account. Every number is designed to support transaction accuracy, security, and global usage. Without this number, no transaction can be performed. Thus, it is the most significant aspect of each credit card.

The credit card number is printed on the card. Traditional credit cards had embossed numbers, but today's credit cards have a simple printed display. But some security-focused cards have begun printing the numbers on the back.

Some banks provide customers with the ability to see their credit card information from their online accounts. You can access your bank's portal or mobile app to sign in to your user account and see all your cards.

Credit card numbers have a format established by the International Organization for Standardization (ISO). Credit card numbers are not random sequences of digits but instead have a specific format important for security and authenticity.

A credit card number is typically made up of 16 digits, generally divided into sections:

• The initial six digits known as the Issuer Identification Number (IIN) is the bank identification number (BIN), which specifies the issuing financial institution and the network of the card, e.g., Visa, Mastercard, etc.

• The seventh to fifteenth digits correspond to the individual account number of a cardholder, differentiating one credit card from another.

• The final digit is employed for validation in the Luhn algorithm. It is useful to verify card number errors as well as to ensure the validity of the series.

   

Credit card number lengths may vary on different card networks. For example, an American Express card number has 15 digits, whereas Visa and MasterCard credit card numbers are 16 digits or sometimes 19 digits in case of some Visa cards. An orderly format like that will make it impossible for any two credit cards to have identical credit card numbers, even if they happen to be issued for the same individual on the same bank using the same card.

The first six digits of a credit card, namely the Issuer Identification Number (IIN) or Bank Identification Number (BIN), are significant for identifying important information concerning the card. These digits establish:

• The issuing bank: Identifies which financial institution issued the card.

• The type of card: Indicates whether it is a Visa, Mastercard, American Express, etc.

• Card classification: Refers to the card type - credit, debit, prepaid, or business.

• Geographical location: Indicates the country where the card was issued.

These six digits allow businesses and financial institutions to ensure that transactions are correctly processed, thereby minimising fraud risk. For instance, online merchants use their data drawn from BIN to catch and deny mismatched transactions.

It is crucial to keep your credit card number safe to avoid fraudulent and unauthorised transactions by third parties. Here are some tips to safeguard your card information:

• Don’t share your card number: Do not reveal your credit card number through phone, email, or social media with another person.

• Utilise virtual credit cards: Some banks provide digital temporary card numbers for online purchases to minimise the risk of fraud.

• Opt for two-factor authentication (2FA): Several banks insist on an OTP or biometric authentication for transactions, providing an added layer of protection.

• Review account statements: Review your credit card transactions for unauthorised transactions and report any suspicious transactions immediately.

• Don't store card information online: Several e-commerce websites provide an option to save your card information. It is convenient, but it is safer to input your details manually each time.

Use secure sites: Always make sure websites are HTTPS-secured before entering your card details.

Aside from the main credit card number, there are other numbers that you should know to use the credit card safely:

CVV Number

The Card Verification Value (CVV) is a security element on most credit cards. The three-digit (or four-digit in the case of American Express) number appears on the back of the card and is an added security measure. CVV numbers ensure that the individual conducting an online transaction has the physical card in hand.

While merchants can store credit card numbers, they cannot store CVV codes. This helps prevent hackers who have accessed stored payment information from being able to make transactions without the CVV. So, users must never reveal their CVV to anyone.

Expiration Date

The expiration date, printed on the front of the card, indicates when the card will no longer be valid. It is formatted as MM/YY and is required during online transactions. Banks issue new cards before the expiration date to ensure uninterrupted use.