instruments, which can be used more than once to borrow money or buy products and services on credit or debit (depends on the type of plastic money). Types of Plastic Money
used to pay for products and services. The card-holder needs to produce the card and sign a charge slip to pay for the purchases. The institution which issues the card makes the payment to the outlet on his behalf; the card-holder will pay this 'loan' back to the institution at a later date. Some Facts about Credit Cards
• The first card was issued in India by Visa in 1981
• The country's first Gold Card was also issued by Visa in 1986 • The first international credit card was issued to a restricted number of customers by Andhra Bank in1987 through the Visa program, after getting special permission from the Reserve Bank of India • The credit cards are shape and size, as specified by the ISO 7810 standard. It is generally of plastic quality. It is also sometimes known as Plastic Money. Major Banks issuing Credit Card in India • State Bank of India credit card (SBI credit card) • Bank of Baroda credit card or BoB credit card • ICICI credit card • HDFC credit card • IDBI credit card • ABN AMRO credit card • Standard Chartered credit card • HSBC credit card • Citibank Credit Card, ………….so on Advantages of Credit Cards • Convenience as a method of payment • Simple to operate and carry and immune to financial losses • Decrease in the bank commission charges, as all monthly purchases are dealt with by one monthly payment • Aids budgeting and planning • Acceptability in many countries • Protection to card holders as the credit card company is jointly liable for any purchases made • Hedge against inflation Limitations
• Interest rate, if credit taken, is generally
quite high
• Loss and fraud
• Higher payment than in cash is possible
Factors affecting the use of Credit Card
• Social and Cultural
• Business and Economic • Political and Legal • Technological Debit cards
• Debit cards are substitutes for cash or
check payments, much the same way that credit cards are. However, banks only issue them to those who 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 Features of Debit Card
• Obtaining a debit card is often easier than obtaining a
credit card • Using a debit card instead of writing checks saves you from showing identification or giving out personal information at the time of the transaction • Using a debit card frees you from carrying cash or a checkbook • Using a debit card means you no longer have to stock up on traveler's checks or cash when you travel • Debit cards may be more readily accepted by merchants than checks, especially in other states or countries wherever your card brand is accepted • The debit card is a quick, "pay now" product, giving you no grace period • Using a debit card may mean you have less protection than with a credit card purchase for items which are never delivered, are defective, or were misrepresented. • Returning goods or canceling services purchased with a debit card is treated as if the purchase were made with cash or a check