Browse Prior Art Database

System and Method for Credit Constraints

IP.com Disclosure Number: IPCOM000021602D
Original Publication Date: 2004-Jan-26
Included in the Prior Art Database: 2004-Jan-26
Document File: 2 page(s) / 44K

Publishing Venue

IBM

Abstract

Disclosed a method and system to provide the ability to constrain the usage of an individual's credit card or similar payment device.

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System and Method for Credit Constraints

Disclosed a method and system to provide the ability to constrain the usage of an individual's credit card or similar payment device. For example, a parent may specify that a credit card given to their teenager may not be used to purchase anything over a parent-specified dollar amount and/or the card can not be used to purchase alcohol. This gives the person or organization responsible for the credit card debt more control over how card is used while allowing a card user the convenience of a credit card. Another example is the setting of constraints on corporate credit cards which allow them to be used only for food, lodging and transportation; thus giving the issuing corporation more control over there employees' expenditures.

In a usage scenario, a customer may attempt to make a purchase at a store using a credit card with constraints. When the credit card is scanned and the usual credit authorization check is performed, an additional check is performed to determine whether the purchase conforms to additional constraints associated with that credit card and/or credit account. Constraints may be based on time, location, store name, store type, dollar amount, previous purchase history, or items purchased. Credit cards and related payment methods currently do not allow customer individualization according to this invention. For example, if a parent gives their child a credit card, the parent has no direct control over what the card is used to purchase. This lack of control can lead to undesired expenditures.

Credit cards and related methods of paying for purchases have many risks for the credit card holder, the credit card supplier, and the merchant who accepts the potential payment. The system and method described here limits such risks using user-chosen constraints. For example, a credit-card holder may use a web page, supplied by the credit card company or third party, to enter specific constraints, e.g. the card can be used for small purchases in the month of June, excluding liquor purchase before noon and excluding on-line purchases. A credit card company may offer incentives for users who use this system because it reduces the credit card company's risk. Similarly, merchants may provide incentives because their risk may be limited in instances with users using such constraints. Users also have incentive to use this because it may reduce their own risks, such as a young person's impulse buying.

In the preferred embodiment, the system makes use of a credit...