In general, debit cards & credit cards are called as plastic money. Plastic money has provided us with the ease of conducting transactions in our day to day life. It has definitely replaced cash transactions to a great extent all over the world and has emerged as an essential form of ready money. It has made it too easy for us to buy things we normally could not afford and in such a scenario it is important to understand the merits and demerits of plastic money.
- Reduces the need to carry cash: Plastic money has not only provided us with convenience, but it has also eliminated the inconvenience that is caused in carry cash. For instance, when the job of a working executive involves a lot of inter-state travel he/she has to entail numerous expenses like travel, stay, food etc. In such a case it is not only troublesome to carry money but also there is a risk of theft.
- Reduction in crime: With credit or debit cards’ being used, one benefit is the reduction in thefts and crimes. It is very difficult to hack the PIN of a card, for which a person needs to know specific techniques. Thus the credit card holder can be sure about the safety of his/her money to some extent. Also in the event the card is stolen, the credit or debit card holder can ask the bank to block the card as soon as possible.
- Credit cards provide a credit facility: With the advent of credit cards an individual can avail the benefits of credit facility and pay at a later date. This kind of benefit is not available when cash is being used for making a purchase. Also credit cards dismiss the need for go behind people to borrow money in case of emergencies and financial needs.
- International acceptability: Owning an international debit or credit card provides the ease to make purchases with that card itself rather than worrying about running out of cash. Also it eliminates the inconvenience caused in conversion of currency.
- Ease in making payments from home: Credit cards and debit cards can be used easily for making online payments, transfer of funds and various other transactions. It is very easy to make payments on online shops through plastic money. Further some online retailers also provide discounts on making payments through credit and debit cards.
- Plastic money cannot be used everywhere: There are several places where there is a need for cash only. For instance purchasing utilities from a small retailer or for payments to milkman, newspaper boy, etc. Further religious places like temple generally accept cash as offerings. Thus plastic money cannot completely replace cash and thus cannot be used everywhere.
- Plastic money is also not completely safe: When we are making an online purchase through a form of plastic money there a certain degree of risk involved as we share our bank details and other financial information on the internet which is not always a safe place. There are certain malicious websites on the internet with the intention of looting people, thus it is very important to be careful while sharing an important detail online.
- Interest liability: While it is true that credit cards give us ample time to pay for purchases made through it, it can also not be ignored that on the lapse of that period the card holder has to pay interest amount. This is not the case when making payment through cash.
- Impulsive purchases: Having the ease to make payments makes a person unable to keep a control on his/her purchases and enable the person to oversee if the purchase is cost worthy or not.
- Damaged card: Sometimes the magnetic chip of the cards gets damaged due to wear and tear or mishandling by the holder. In such an event it the person feels the need to carry cash to avoid embarrassment. Although this is a rare case but it cannot be avoided.
It can definitely not be denied that various forms of plastic money like credit cards, debit cards and others have made life easier by provided various advantages over the use of cash. But at the same time there are few disadvantages which cannot be denied. Thus it can be concluded that it is the responsibility of the individual to carefully use plastic money to avail its benefits.
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