Bank accounts are fundamentally different compared to credit cards. Checking and savings are the two most common types of bank accounts that are offered to customers.
The former is meant for day-to-day expenses. No interest is earned on the funds that are kept in a checking account.
A savings account is meant for parking your funds for a considerable period. Banks will usually provide a decent interest rate to attract deposits and ensure that customers keep the money in the account for longer periods.
Credit cards are a different product altogether. That said, plenty of people ask whether or not credit cards have routing numbers. It’s an understandable question for those unfamiliar with the nuances of each type of banking solution.
Simply put: no, credit cards don’t have routing numbers. But what they do have to connect it to an account, and what makes a routing number unique, make for some interesting questions. Let’s go through the answers.
What is a routing number?
A nine-digit number used to identify a bank or financial institution in the United States is called a routing number. It’s a necessary piece of information when clearing funds for online transfers and when processing checks.
Clearinghouses rely on the routing number to accurately process financial transactions. Online banking functionality will also be unable to function in the absence of routing numbers.
Not all financial institutions will have a routing number, though. It’s only the federally chartered and state-chartered banks that are eligible to maintain an account at a Federal Reserve Bank that is issued routing numbers.
Routing numbers have been in use for more than a century. They were first established by the American Bankers Association in 1910.
When setting up a wire transfer, routing numbers play an essential role. There’s no physical currency that moves between banks when such a transfer is conducted. It’s the information that’s transmitted from one bank to another.
That’s why a transaction must go through without any issues to have the correct routing number. Routing numbers are also used in direct deposits of money from employers that pay employees in addition to being used for income tax refunds from the Internal Revenue Service.
Routing numbers may not always be referred to as such. There are a few terms that are used by the industry for the same nine-digit number.
You’ll find routing numbers being referred to as routing transit numbers and even ABA numbers. ABA is an acronym for the American Bankers Association, a nod to the fact that it was the ABA that established routing numbers back in 1910.
How to find your account routing number
Whenever you open an account at a bank, they give you documentation that provides detailed information about the services that you just signed up for. This will include the relevant account number that was assigned to that new account, in addition to the routing number that you’ll need for transfers and direct deposits.
A much simpler way of finding the routing number is to take a look at the checkbook. A bank’s routing number is mentioned at the bottom of a check. The first nine digits on the far left will represent the routing number.
The first four of the nine digits designate the Federal Reserve Bank of the district where the financial institution is located. The next four digits denote the bank while the last digit classifies whether it’s a check or a negotiable instrument.
Banks have also made it easier to locate important information about your accounts through their online banking portals and mobile applications. If you’ve signed up for these services, you can easily find your routing number through the online portal or app.
Do Credit Cards have routing numbers?
Credit cards don’t have routing numbers. The fact remains that credit cards also don’t need them. As we’ve previously discussed, routing numbers are only required for transferring funds between accounts through wire transfers, checks, etc. That’s not what a credit card is for.
It’s easy to understand where the misconception about credit cards having routing numbers comes from. All credit cards have a 16 digit number attached to them. They can either be on the front or the back of the card.
Some modern cards go for a minimal aesthetic and don’t list any numbers on the card itself, opting to provide that information to customers through an app instead.
What credit cards do have are account numbers. This number acts as the link between the credit card issuer and the cardholder. This information is essential for processing payments.
The very first digit of the card number identifies the type of card. If the number starts with 3 then it’s an American Express card. Visa cards start with the number 4 while a Mastercard begins with 5. Discover cards begin with the number 6.
The next 6 to 8 numbers are what’s referred to as the issuer identification number. They are also known as a bank identification number. These numbers are used to identify the financial institution that issued the credit card.
The remaining digits are unique to every cardholder as they’re meant to identify the customer’s specific credit account at their financial institution. These digits are selected by the card issuer as a way to signify your account number.
Why don’t Credit Cards have a routing number?
The purpose of a credit card is not to send wire transfers or direct deposits. The customer isn’t spending their own money when they use a credit card for a purchase. It’s the bank that grants them a certain credit limit that they can utilize every month.
Whenever the card is used for payment, it’s the bank that pays off the merchant in full. The cardholder doesn’t need to pay the bank immediately. It’s only when their billing cycle comes around is the bank is then required to be paid for the funds that it has already paid on behalf of the customer to the merchant.
In such a transaction, a routing number is not required. Credit card payment settlement mechanisms are entirely different from wire transfers and direct deposits. They’re not reliant on a routing number to process the transactions. That’s why credit cards don’t have a routing number.
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