What happens when you pay with a card.
A 10-minute lesson: the beep, the four checks, the verdict in seconds and the settlement arriving days later.
Your money's 3-second journey: from the terminal to your bank through four checks, and why it sometimes says no.
The case
You tap the card, it beeps, approved. Three seconds and not a single coin moved. So where did your money go?
In 10 minutes you'll follow a real payment: four checks, a verdict in seconds and the settlement arriving days later. And you'll read fees without getting fooled.
What you will learn
- Explain a payment's route through its four checks
- Read who charges the fee on each purchase
- Check APR and fees before deferring to months
The permission of money
Paying doesn't move your money: four check, one authorizes and everything leaves a trail. If you understand permission, you understand fees.
Terminal
Where it all starts: it reads your card and files the request.
Checks
Four checks: merchant, its bank, the network and your bank.
Verdict
Approved or declined in 3 seconds, with a reason.
Trail
Nothing moves yet: the money travels days later.
Frequently asked questions
Where does my money go when I pay by card?
Nowhere yet: what travels in 3 seconds is the permission. The money moves days later, in the settlement between banks.
Why is my card declined if I have funds?
Almost always over fraud suspicion (place, time or odd amount) or limits. The bank holds first and asks after.
Does interest-free mean free?
Not necessarily: check the APR and deferral fees. 'Interest-free' with a high APR is expensive in disguise.
What you take away
Explain a card payment's route and read fees and interest.