Different banking solutions have their nuances when it comes to other banking solutions. These differences can be confusing if you are not familiar with them. For instance, let us take routing numbers. What is a routing number? What is their purpose? And do credit cards have routing numbers? Scroll through to find out answers to all those questions.
What is a routing number?
A routing number is a nine-digit code based in the U.S. It recognizes the location of your bank or financial institution. Routing numbers play a significant role when setting up a wire transfer. Routing numbers are crucial for setting up direct deposit setups and fund transfers, digital checks, and paying bills. When processing this sort of transfer, no actual currency transmits from one bank to another. Instead, only the information passes on between banks.
A transaction needs to go through without any issue to have the correct routing number.
The term ‘Routing numbers’ is not the only one to refer to this code. There are other names for this code, such as:
- Routing Transit Number
- Check Routing Number
- Fedwire Numbers
Essentially, it all means the same thing. Other than the terms we mentioned, sometimes banks identify the routing numbers as ABA numbers. ABA stands for the American Bankers Association. Interestingly, this association established routing numbers for the first time back in 1910. Think about it; that means routing numbers have been around for more than a hundred years. Yet, we are just starting to learn about it.
How to find your account routing number
You get to know the routing number when you start your new bank account. When you open a new bank account, they provide you with documents about the services they offer. It will contain the account number that they assigned to your new account. The papers will also let you know the bank’s routing number. This number is what you need for transfers and direct deposits.
Other than that, there is another more straightforward way to find the routing number. For that, you have to see the checkbook. When you open your checkbook, you will find the bank’s routing number at the bottom of the check. Notice the first nine digits on the far left? That is the routing number.
Take a look at the first four of the nine digits. Those designate the Federal Reserve Bank of the financial institution district. The following four numbers signify the bank, while the last digit shows whether it is a check or a negotiable instrument.
Banks have also made locating important information about your accounts easier through mobile applications and online banking portals. If you have signed up for such services, you get to easily find your routing number via the app or online portal.
Do credit cards have routing numbers?
Now to the big question. Do credit cards have routing numbers? Well, they do not. That is because credit cards do not need them. You only need routing numbers for transferring funds between accounts through wire transfers or checks. As you know, that is not the purpose of a credit card.
Usually, every credit card has a 16 digit number attached to them. You can spot the digits on the front or the back of your credit card.
However, do not be surprised if you cannot find it on your card. Some modern cards choose not to list digits on the card. They would instead provide the details to customers through an app.
Do credit cards have account numbers?
Yes, Credit cards do have account numbers. Each account number comprises eight to twelve digits. This digit acts as the link between the credit cardholder and the card issuer. This piece of information is essential when processing payments.
Take a look at the very first digit of the card number. It identifies the type of card. Suppose the number starts with 3. If so, then it is an American Express card. On the other hand, Visa cards begin with the four while Mastercard starts with the number 5. Likewise, Discover cards start with 6.
Take the following 6 to 8 numbers. Those signify the issuer’s identification number. You can also call them on the bank identification number. Using this number, you get to identify the financial institution that issued the credit card.
The rest of the digits are unique to every cardholder. The purpose of these digits is to recognize the customer’s specific credit account at their bank or financial institution. Generally, the card issuer selects these digits as a way to signify your account number.
Why don’t credit cards have a routing number?
As you now know, credit cards do not require routing numbers. The purpose of a credit card is not to send direct deposits or wire transfers. You are not spending your money when you use a credit card for purchases. Instead, the bank allows you a credit limit that you can use each month.
The bank pays off the merchant whenever you use your card for payment. Here, you do not have to pay the bank immediately, though. You only have to pay when their billing cycle comes around. Then you have to pay for the funds that the bank has paid to the merchant on your behalf.
For a transaction like this, you do not need a routing number. Credit card payment settling processes are different from direct deposits and wire transfers. They’re not reliant on a routing number to process the transactions. That’s why credit cards don’t have a routing number.
There you go! We hope this article cleared out your confusion about routing numbers. Now you know that credit cards do not have routing numbers.
You can try out the methods we explained whenever you want to find your routing number. However, if you have doubts, it is better to speak with a bank representative where you opened your account. That way, you can ask about the routing number you should use. It is, of course, essential that you use