Plastic Currency

PLASTIC CURRENCY = DEBIT CARD + CREDIT CARD FACILITY

The use of credit card is already prominent in developed countries and the use and circulation of credit card facility is growing gradually in other countries without any exception. In all developed countries the credit card has curtailed the currency circulation to good extent. It is felt that there is imperative necessity to inculcate the credit card culture and strengthen its usage across the world in view of fast paced globalization

The concept of debit and credit card was emerged as an alternative to holding currency on person for all spending purposes. The visible success of this plastic card has lead to introduction of DEBIT CARD/ATM CARD. As such there are two variety of cards broadly categorized viz. debit card and credit card

DEBIT CARD

One is DEBIT CARD/ATM CARD. This card is issued by the financial institution, the account holder holds deposit account. In the olden days the account holder has to visit the FI (financial institution) to draw his money by way of cheque or prescribed withdrawal form generally made available by such institute with or without charges subject to average balances in the account. The person has to use currency for all practical purposes and also carry the required cash in hand while on the move, which can be risky sometimes.With the improvement of technology the debit card money has almost replaced across the counter cash transactions, also minimized the usage of cheques and moving with required currency on long journeys and enhanced the longevity of the currency notes.

The intensive usage of debit card has facilitated the financial institutes to serve the clients instantaneously with the help of technology more accurately, minimize their counter and back-office staff-saving lot of operating cost and as such improving the economics of the institute on the part of the organization side. It also helped the client to feel free to take exactly required currency prefer to use the DEBIT card for all allowed transactions and save expenditure, time and efforts in visiting the institute for every transaction and also avoiding social risks . Another important advantage is that the merchant establishments/recipients of charges are getting their dues instantaneously and accurately directly to the credit of their accounts with financial institute.

In view of the foregoing advantages the DEBIT CARD was already playing dominating roll in all the developed countries and is being picking up gradually in the developing and underdeveloped countries. However one must remember to use the debit card duly placing the funds in the account and to the extent of quantity of funds available in the account. The DEBIT CARD holder has to take precautions about securely keeping the card and password.

CREDIT CARD

The credit cards are generally issued on request after verification of proof of residency, profession and remarks in the SOCIAL SECURITY ID (in respect of countries where SSN is in vogue). The issuing authority is having sole discretion with regard to issue of the CREDIT CARD. In all developed countries the CREDIT CARD and its limit is basing on the ratings gained by the client with his already displayed way of discipline in money matters. There are two different limits one limit is for purchases and the other limit is for availing cash facility. The credit card holder need not have any deposit balance in his credit card account as it is real CREDIT for the card holder of limited duration.

Depending on the rating of the client, the credit cards are issued either with initial deposit or without any initial deposit. However over a period of time the initial deposit is totally waived in almost all countries across globe (barring few instances of newly entered foreign citizens). There is no annual charge for issue of credit cards in developed countries; however in other countries still the issuing authorities are levying annual charges towards issue of credit cards in most cases. However the life-time-free credit cards are being issued in the recent past by some reputed organizations in these countries. Still the process of application and issue is not streamlined effectively and the usage of technology in these developing/underdeveloped countries is left with lot of scope for improving the efficiency.

The applicant must prefer to go through all the terms and conditions invariably whether online or offline. The applicant can prefer only LIFE-TIME-FREE credit cards. In certain countries the issuing authorities themselves do not adhere the terms and conditions and they test the memory/wisdom of the cardholder by charging annual fees, service taxes etc. However these authorities will reverse back once the card holder promptly reminds the top of the authority suitably as such the card holder has to be aware of all aspects.

THE MOST IMPORTANT ASPECT IS THAT THE CARD HOLDER WILL BE FAVOURED WITH MONTHLY BILL FOR HIS USE IN THE PRECEDING MONTH EITHER ONLINE OR THROUGH SNAIL MAIL (DEPENDING ON THE TECHNOLOGY USAGE) INDICATING THE LAST DATE FOR PAYMENT.

ALL CARDHOLDERS BETTER PAY THE TOTAL DUE AMOUNT ATLEAST WEEK DAYS IN ADVANCE TO THE INDICATED DATE WITHOUT FAIL in their own interest. THE CONSISTENT PAYMENT OF THE BILL BEFORE OR BY THE TIME OF DATE WILL ENHANCE THE RATING OF THE CARDHOLDER and this fair rating will help the cardholder in getting various other facilities also in some parts of the world..

Some agencies will indicate in the bill that payment of certain per cent of bill money is sufficient to avail the total allowed limited again/afresh. In developed countries these agencies will respect their indication and will not charge any interest on the balance due, however certain agencies in developing/undeveloped countries will levy hefty charges ranging from 24% to 36% per annum (rate) over the balance due besides late payment charges, service charges and taxes etc. Further the cardholder should desist from availing cash facility as it attracts application of interest. Hence whatever the country one resides, it is ideally suggested to clear dues before the due date. The credit cards can be used for all purposes subject to its acceptability in the merchandise establishments, tax receiving agencies, travel agencies, grossary-establishments etc.

In some parts of the world there is excellent encouragement for using the cards as effectively, extensively and intensively as possible. The encouragement process involves surprise gifts, money back (certain %), discounts, feeding with lot of useful information and limited free services etc.

VISA symbolised cards are universally accepted irrespective of the issuing agency. However certain cards are having geographical restrictions means validity is being restricted to certain parts only. If the client requires universally accepted card, the client has to approach the issuing authority with specific request of INTERNATIONAL CREDIT CARD or even for INTERNATIONAL DEBIT CARD.

In the recent past a system of ADD-ON CARDS was emerged in the field of credit cards. The primary credit card holder can apply for ADD-ON CARDS for use independently by family members of the main cardholder or of his close associates.The industrialists/companies are also benefited with the facility of ADDONCARDS as these companies are provided with credit cards to their directors, employees or interested group of their industry at the final billing to the company/industry. These facilities are more convenient both for individuals and industrialists/companies.

USING THE CREDIT CARD for need based purchases keeping in view one’s own financial strengths will always keep the credit card holder in good stead. Alternatively if the credit card holder uses the card without proper financial planning will lead the cardholder into difficult days because unplanned and excessive use of credit card and resultant nonpayment of the dues will erode the rating of the cardholder, subjected to bad remarks in his SSN IDs and personal records. Such persons’ patronization is not accepted by any establishment/agency in technology driven society. Further the issuing authorities are having every right to recover the dues along with penal charges by adopting legal recourse.

Prefer the plastic money, use it as much as you require without carrying any currency, pay the used limit before the due date, increase your rating and avail other facilities derived thru good rating.