Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
2000-01-19
2002-03-05
Trammell, James P. (Department: 2161)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
Reexamination Certificate
active
06353811
ABSTRACT:
BACKGROUND OF THE INVENTION
1. Field of the Invention
The present invention relates to a credit card billing system and method, and more particularly, to a system and method which provides for allocation of expenditures made by a credit cardholder, as well as allocation of interest attributable to each of the expenditures and payments made by the cardholder, to sub-accounts specifically designated by the cardholder using an electronic device, wherein the designated sub-account is transmitted to the credit card company along with the expenditure amount, the credit card account number and other data. Examples of an electronic device suitable for this purpose include: a programmable transaction card (i.e., a smart card); an electronic wallet; a portable electronic terminal and/or a personal computer. Examples of credit cards include credit cards, debit cards, check cards, and the like.
2. Description of the Related Art
At the current time, all issuers of credit cards, such as Visa, Mastercard, and American Express, render periodic billing statements to their cardholders which list all expenditures and accrued interest. Where multiple cards are issued under one account, such as a business organization having cards for multiple employees or a family with several family members using an account, some credit card issuers list the expenditures and also reflect which person using the account incurred each expenditure. However, presently known credit card billing systems and methods do not provide a means for credit card users to have expenditures, accrued interest on each expenditure and payments, allocated to one or more sub-accounts specifically designated by the credit card user within a single credit card account.
It is commonly necessary for a credit card account holder to account for and allocate each expenditure for various tax or business purposes, such as:
(i) Tax deductible versus non-deductible expenditures;
(ii) Tax deductible versus non-deductible interest expense;
(iii) Expenditures, including interest, which may be billed (i.e., passed thru) to a customer or client of a cardholder; and
(iv) General or specific cost control accounting. Under the present billing system utilized by all credit card issuers, in order to account for each individual expenditure, the cardholder must examine each expenditure and determine from the person incurring the expenditure, which may be an employee, family member, etc. the nature and purpose of the expenditure. This presents a substantial accounting undertaking which is exacerbated where an organization or family has numerous persons incurring expenditures on one account.
Furthermore, when paying a credit card bill, present billing methods do not allow a cardholder to specify a sub-account(s) to which all or a portion of the payment is to be credited, and to thereby leave outstanding balances, with accruing interest charges, in other sub-accounts, in accordance with the tax, business or accounting needs of the cardholder. At the present time, there is no method by which a cardholder can allocate payments so as to control and identify the specific prior expenditures as to which interest is accruing. This shortcoming may have adverse tax and business consequences for the cardholder. For instance, a tax deduction for the payment of accrued interest expense may be lost or the right to pass the interest charges on to a customer or client of the cardholder may be lost because the interest expense cannot be tied to a particular expenditure or group of expenditures. The present invention, therefore, produces a useful, concrete and tangible result because the creation of the sub-accounts results in substantive changes in tax and business consequences to the cardholder which cannot be achieved with any presently existing credit card billing methods or bookkeeping method which may be employed by the cardholder.
My invention, as described and claimed in previously filed patent application Ser. No. 09/195,132, provides a unique system and method which allows each person incurring credit card charges to designate a specific sub-account to which each expenditure and interest attributable thereto shall be allocated by the credit card issuer to be reflected on each billing statement to the cardholder. The cardholder may thereby obtain the information provided by the separate sub-account listings on each credit card statement to satisfy and resolve the credit card holder's need to account for various categories of expenditures, such as:
(i) Tax deductible versus non-deductible expenditures;
(ii) Tax deductible versus non-deductible interest expense;
(iii) Expenditures, including interest, which may be billed (i.e., passed thru) to a customer or client of a cardholder; and
(iv) General or specific cost control account. In addition, this unique method will also allow the credit card holder to specify each sub-account to which each monthly or other periodic payment by the cardholder is to be allocated, thereby determining which specific expenditures are to remain outstanding and accrue interest charges.
In a preferred embodiment, the sub-accounts are electronically entered by the cardholder at the time of purchase with the use of an electronic device having a keypad, a memory and a display. Specifically, the present invention contemplates the use by the cardholder of a smart card, electronic wallet, a portable electronic terminal, and/or a personal computer for electronically entering the designated sub-accounts at the time of purchase.
A smart card is an electronic device typically including a microprocessing unit or CPU and a memory suitable for encapsulating within a small flexible plastic card, for example, one that is about the size of a credit card. The smart card additionally includes some form of an interface for communicating with an external system. Examples of smart cards of this nature are disclosed in the Wallerstein U.S. Pat. No. 5,955,961, Nagata, et al., U.S. Pat. No. 4,959,788, and Piosenka, et al., U.S. Pat. No. 5,777,903. Typical applications for smart cards include the transfer of information of all types relative to banking and other financial transactions, transportation, subscriber health and identification. The smart card additionally includes input/output (I/O) signal interface for transferring various I/O signals between the smart card and an external system. The interface may take the form of a contact interface, which requires that the smart card come into contact with the external system, or a peripheral thereof, for proper transfer of signals. Alternatively, the interface may take the form of a radio frequency (RF) interface for allowing communication between the smart card and the external system via the transmission and reception of RF signals. The external system may take the form, for example, of a card reader, a merchant's point of sale system, or an automated teller machine.
Ideally, the smart card includes a microprocessing unit (MPU) or a central processing unit (CPU) for executing instructions stored in memory. The smart card further includes a display, coupled to the MPU, for displaying information, a keypad, coupled to the MPU and the display, for entering data by the user, and the interface for transferring signals between the smart card and the external system when the smart card is coupled to the external system. The smart card may further be provided with a power source such as a battery and/or photovoltaic cells for providing power to the smart card when the smart card is exposed to light, thus providing a solar power source.
Electronic wallets come in various forms and typically include a keypad and a display. U.S. Pat. Nos. 4,614,861 to Pavlov, et al. and U.S. Pat. No. 4,707,594 to Roth disclose electronic wallets in the form of self-contained cards including a power supply, user interface, processor and static magnetic strip. Roth's patent is very much related to wallet design, with media interfaces limited to a keypad and display. Pavlov also provides keypad input and display output and relates
Elisca Pierre E.
Robert M. Downey P.A.
Trammell James P.
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