what are merits and demerits in plastic money
Plastic money (credit cards, debit cards, etc.)
Advantages: You don't have to carry cash. You can have your job's check directly deposited into the bank. You can buy what you want without having the money right then to buy the item as long as you do not go over the card's limit. In unexpected financial emergencies, cards can be used to pay for what you need. Wise use is beneficial to your credit report. Disadvantages: They encourage overspending You can get in too much debt, leading to filing bankruptcy. Cards often have extra or hidden fees and high interest rates. Using credit and debit cards puts you at higher risk of identity theft than using cash. Cards might be lost.Over Budget: Plastic money gives us an easy and extended purchasing capacity which results in an extra and unwanted buying. These cards give us discounts and bonus also on particular stores or items, which encourage us to get them and we use our hard earned money for a non-required thing, which affects our budget and we can't handle our monthly budget system.Increased Debt and High Interest Rates: Credit Card provider financial institutions and companies charge high interest rates (may be 10% to 25%) on extra money if you fail to pay off up to the fix date of the month.This interest is their earning, for which they give you extra buying limits then your money. This is not a good idea that you owe loan on high interest rates and spend it in unnecessary things or purchasing. This is complete money wastages.Fraud: Credit cards can be stolen. A thief may be use them directly or to get their information (which is required in money exchange). In today's technical intelligence it is also possible to get a clone of any credit card or debit card, which works like original and they can be give you a heavy financial loss. So be aware from credit cards fraud as they are like stolen your money from your pocket without your information.
Plastic money has become the order of the day. Whether it's a high-end store, a restaurant, a café outlet or even a grocery shop, people just buy what they like (not just what they want), proudly taking out their cards and allowing the shopkeeper to swipe away a fortune of their hard-earned money.demerits ;Underlying EvilsThough it may look all trendy and flashy to own plastic money (especially credit cards), you may be surprised to know, owning it is extremely harmful and risky as well. Credits cards cost much more than other forms of credit, such as a line of credit or a personal loan, in case you are unable to pay them on time. The transaction charges added to the amount is much more than you would have anticipated. Also, continuous late payments damage your credit rating.Too Much Of CreditOne of the most evident and apparent problems with plastic money, mainly credit cards, is that it gives you unwanted freedom. As a result, you go on a shopping rampage, without even once bothering about the consequences. Plastic money allows people to buildup more debts than what they can handle. While you may be in high spirits after the recent shopping expedition, be wary that cost may be too much to handle.Terms ConditionsHave you heard the phrase 'All that glistens is not gold'? Though debit/credit cards may have innumerous benefits, most of them usually come with complicated terms and conditions, which you might not understand or comprehend initially. However, with time, as you get to know the nuances of these 'dirty' terms and conditions, it might be too late.Risk Of Loss MisuseThe danger of losing a debit/credit card is something, which most card owners' fear. Though you might start thinking of the world as a good place and people living in it as angels and seraphs, reality is not all that sweet, especially when you have lost or been robbed of plastic money. It is seen that hefty purchases are made under the name of the account holder after the card gets lost or stolen and you end up paying for things, which you have neither bought nor own.Limited OptionsWith so many companies in the market, chances are that the stores that you step in does not accept card of the particular company you have. Result - you have to either pay a bulk of cash or just walk out of the shop with no shopping bags (as most of us do not care to carry cash, because we overtly rely on the credit card).Less Global AvailabilityDebit/credit cards also limit global shopping. This is mainly because there are many companies that do not allow their cards to be used in areas with which they have a regional conflict. As a result, owning plastic money can be very cumbersome, not to forget the embarrassment of coming out empty handed, after spending so much of your time trying the gorgeous outfits. It's Plastic After AllIn the present world, we have become plastic money fanatics. Most of you would agree that with debit/credit cards in wallets, we do not mind going out without even a single note in hand. However, remember its plastic after all and susceptible to damage. Due to constant use, magnetic strips of the cards get worn out. As a result, the card might not get accepted. If during such times, plastic money is your only source of cash, you can be in a tricky situation.merits :
- Credit cards bring in easy cash at your disposal even when your wallet runs out of cash. It comes handy specially when you are into a lot of travelling and carrying cash is a big hassle. They come handy especially while you travel overseas.
- Credit cards provide you with security and protection in comparison to cash. There is a lot of risk in carrying a large amount of cash in your wallet. As for credit cards, they will give you money as and when required and if you lose it or if it is stolen you can always save yourself from further loss by blocking your card immediately.
- As credit cards provide you with the facility to buy goods and services online they aid in increasing your purchasing power.
- Credit cards from few financial institutions are loaded with facilities like cash back which serve as an incentive for you and few provide reward points that can be availed in form of coupons or gifts.
- In situations like job loss or health emergencies credit cards can play a vital role by providing you with that extra money that you are desperately in need of.
- Credit cards bring along easy payment options like monthly installments which help you to write off your debit easily without asking you to shell out a lump sum amount from your pocket that may interfere with your cash in hand needs.
- You can also withhold payments with credit cards.
- Credit cards also give you a facility to withdraw cash from the ATMs. It should be noted that in such case there is no free credit period and the interest starts accumulating from the first day itself. Interest rates may vary from 25 percent to 45 percent annually. A cash withdrawal fee of 2 percent to 3.5 percent is also charged on the amount that is withdrawn