Topic :- plastic money

MOHD.SABA SALAHUDDINMBA IV

Meaning of Money:-Money means more than the coin, paper or plastic to acquire goods and services. Money is linked to complex emotions, feelings and behaviors. Each person has "money messages" that are based on past experiences, what you observed and what you were taught. These money messages reflect the attitudes, perceptions and expectations that influence your financial behaviors today.

If you think about your childhood, what do you recall about your household, the people and the community around you? What kind of housing, food, and clothing did you have? Did most families have several generations living together in a house? Even if money was scarce, did you always have food on the table? Did you only wear new, named-brand clothing or was using second-hand clothes acceptable? Did you have more than one television in the house?

Types of Money :-Basically there are two types of money

1. Paper Money

2. Plastic Money

Paper Money:-Currency in the form of government notes and bank notesCash in the form of banknotescurrency in paper form, such as government and bank notes, as distinguished from metal currency.

Plastic Money:-Plastic money or polymer money, made out of plastic, is a new and easier way of paying for goods and services. Plastic money was introduced in the 1950s and is now an essential form of ready money which reduces the risk of handling a huge amount of cash. It includes debit cards, ATMs, smart cards, etc. Credit cards, variants of plastic money, are used as substitutes for currency. The plastic note are same as paper but the only difference is that they are made of plastic and more secured but in traveling and shopping people used to carry huge cash which was very unsecured and also increasing crime rate.

First payment cards was introduced in the USA. Citibank and HSBC were the pioneers in the Indian credit card market in the 1980

Plastic Money (cont.)

As we know many types of plastic money is available in the market such like credit cards, debit cards, add-on cards, charge cards, co-branded cards, affinity cards or Diners Club cards. More and more Indians are using them as a convenient mode of payment. The Plus point of plastic money is that you won't have to carry your cash around all the time. You have no fear to be theft. And its easy to use

Types of plastic Money:-

credit Plastic Money is of various forms it could be:

A. CARDS B. CURRENCY

TYPES OF CARDS:-Credit card Debit card Charge card Amex card Smart card Photo cardMaster card & visa Diner club card Global card Co-branded card

What is the credit card ?

A credit card is plastic money that is used to pay for products and services at over 20 million locations around the world. All you need to do is produce the card and sign a charge slip to pay for your purchases. The institution which issues the card makes the payment to the outlet on your behalf; you will pay this 'loan' back to the institution at a later date.

TYPES OF CREDIT CARD :-

Premium Credit CardsCash Back Credit CardsGold Credit CardsAirline Credit CardsSilver Credit CardsBusiness Credit CardsBalance Transfer Credit CardsCo-branded Credit CardsLow Interest Credit CardsLifetime Free Credit Cards

What is a Debit Card ?Debit cards are substitutes for cash or check payments, much the same way that credit cards are. However, banks only issue them to you if you hold an account with them. When a debit card is used to make a payment, the total amount charged is instantly reduced from your bank balance.

A debit card is only accepted at outlets with electronic swipe-machines that can check and deduct amounts from your bank balance online.

What is a Charge Card?A charge card carries all the features of credit cards. However, after using a charge card you will have to pay off the entire amount billed, by the due date. If you fail to do so, you are likely to be considered a defaulter and will usually have to pay up a steep late payment charge. When you use a credit card you are not declared a defaulter even if you miss your due date. A 2.95 per cent late payment fees (this differs from one bank to another) is levied in your next billing statement.

What is an Amex Card?Amex stands for American Express and is one of the well-known charge cards. This card has its own merchant establishment tie-ups and does not depend on the network of MasterCard or Visa.

This card is typically meant for high-income group categories and companies and may not be acceptable at many outlets. There are a wide variety of special privileges offered to Amex cardholders.

What is a Global Card?Global cards allow you the flexibility and convenience of using a credit card rather than cash or travelers cheque while traveling abroad for either business or personal reasons.

What is a Co-branded Card?

Co-branded cards are credit cards issued by card companies that have tied up with a popular brand for the purpose of offering certain exclusive benefits to the consumer. For example, the Citi-Times card gives you all the benefits of a Citibank credit card along with a special discount on Times Music cassettes, free entry to Times Music events, etc.

What are MasterCard and Visa?

MasterCard and Visa are global non-profit organizations dedicated to promote the growth of the card business across the world. They have built a vast network of merchant establishments so that customers world-wide may use their respective credit cards to make various purchases.

What is a Smart Card?

A smart card contains an electronic chip which is used to store cash. This is most useful when you have to pay for small purchases, for example bus fares and coffee. No identification, signature or payment authorization is required for using this card. The exact amount of purchase is deducted from the smart card during payment and is collected by smart card reading machines. No change is given. Currently this product is available only in very developed countries like the United States and is being used only sporadically in India.

Advantages 1.Offer free use of funds, provided you always pay your balance in full, on time.2. Be more convenient to carry than cash.3. Help you establish a good credit history. 4. Provide a convenient payment method for purchases made on the Internet and over the telephone.5. Give you incentives, such as reward points, that you can redeem

Disadvantages :-1. Cost much more than other forms of credit, such as a line of credit or a personal loan, if you don't pay on time.2. Damage your credit rating if your payments are late;3. Allow you to build up more debt than you can handle; 4. Have complicated terms and conditions