Plastic Money

Meaning

Plastic money includes financial

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

• Credit Cards
• Debit Cards
• Add-on-Cards
• Charge Cards
• Co-branded Cards
• Affinity Cards
• Master Cards and Visa
• Smart Cards
Credit Cards

A credit card is plastic money that is

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