Suggestion for merits and demerits of plastic money
Answers
Explanation:
Technology has changed the way we deal with money giving us more convenience and easy access to funds from anywhere. It all started with a simple credit card that allowed you to make purchases today and pay later.Further, technological advancements lead to a new trend where most banks gave you one ATM card or debit card which can be used for withdrawing money as well as for making purchases or payments – offline as well as online.
However, plastic money has its share of issues that one must be careful about. Plastic money definitely provides an alternative in some cases and compliments cash as a medium.
Technology has changed the way we deal with money giving us more convenience and easy access to funds from anywhere. It all started with a simple credit card that allowed you to make purchases today and pay later.Further, technological advancements lead to a new trend where most banks gave you one ATM card or debit card which can be used for withdrawing money as well as for making purchases or payments – offline as well as online.
However, plastic money has its share of issues that one must be careful about. Plastic money definitely provides an alternative in some cases and compliments cash as a medium.
Convenience of Plastic Money
Peter, a young MBA graduate joins a large software firm as a Business Development Executive. His job involves frequent travelling and meeting with leads and clients to develop business for the organization. This requires him to spend a lot on travel, food, stay, etc and keep track of his expenses.
Since he may require a lot of cash for inter-city travel which can span a few days or weeks he preferred to use his debit card or credit cards.
For instance he could use his card to pay for hotel stays where cards were commonly accepted. Similarly for travel he could book tickets online, while for food he had to rely on cash.
However, with his debit card he could withdraw cash whenever required which made his life easier. Even if he forgets to carry cash he can use his debit card to withdraw funds whether required.
Advantages of Plastic Money
There are several advantages of plastic money as seen in the above illustration. The advantages include
Eliminates the need for carrying huge cash: This eliminates the need for carrying huge load of cash which is risky and inconvenient too.
Risk of Loss or Theft minimized: In case of cash there is a high risk of losing cash and a chance of cash getting stolen. However, in case of debit/credit card you can report the matter to the bank and block the card to avoid misuse.
Anytime/Anywhere Access Using cards you have the unique advantage and convenience of using it anywhere in the country or even abroad.
Credit Facility: In case of credit card you have the option of buying on credit or paying later. Although the charges are high, it helps you in case of emergencies and contingencies.
Online Payments: You can use cards for online payments, fund transfers and various other transactions.
These are the key benefits which I can easily remember, but there could be various other good features too that are specific to certain cards.
Disadvantages of Plastic Money
So far I’ve been sounding like a nice, pleasant Bank Executive who is convincing you to open an account. Please note a few points before we look at the disadvantages of plastic money
Cards/plastic money is not a complete replacement for cash
Use of cards can also be risky in some cases.
Some of the drawbacks or risk related to cards are
1. Non-Acceptance at Small Retail Outlets
Unless you are a person who shops only in supermarkets and hypermarkets you will be forced to use cash
2. Cannot be used for all daily needs
You cannot pay your milkman, servant, paper wala (newspaper guy), etc by card.
3. Loss & Misuse
Once a card is lost you have to immediately report it and get the card blocked to avoid misuse. Sometimes when you are not aware that you lost the card….the chances of misuse is higher.