Do you know what plastic money is? Almost all of us use it on a daily basis. To understand more about it in detail, read the article and understand what it is, its types, benefits, downsides and more.
What is Plastic Money
For many of us, it might sound like a strange word. However, Plastic Money is actually a legit term in finance. The use of debit cards, credit cards, ATM cards and more such virtual carriers of money in the form of a card is known as Plastic Money. for making actual transactions with these cards without carrying real hard cash is the main motive of this type of money
History of Plastic Money
As we know by now that plastic money is transacting through debit and credit cards, let us know about its history. The first card was first introduced in 1967 in London by Barclays, it was later followed by Chemical Banks, New York in 1969. One of the most important events that took place was when a magnetic strip with a personal identification number was introduced.
Another significant event in the history of plastic money was when the hardware security module was introduced. It was introduced to make secure payments by using microprocessor technology in 1973. After this event the cards were introduced to the masses in later years of 1970s and came in demand by the public in the mid-80’s.
Types of Plastic Money
There are distinguished types of plastic money available in the financial market as mentioned below-
Debit card
Transactions made from a debit card are the withdrawals that are made directly from the customer’s savings account. This is the most type of plastic money used by the people.
Charge card
Customers with charges require to clear off their balance shown in their statement within a set time limit as issued to them. It can also be called a short-term loan.
Credit card
Customers can use a credit card and withdraw or borrow money as per their limit. These cards are mostly issued by the banks, and other non-financial institutions.
ATM card
These cards are used to withdraw money from an automated teller machine, which is commonly known as AT. It can be separately issued by the bank, or the debit card can also be used as an ATM card.
Benefits of Plastic Money
The advent of plastic money came up with many benefits that are as follows-
Go cashless –
Plastic money helps you make transactions and withdrawals without actually carrying hard cash with you. You can also move around the world with some of the credit cards.
Secure option –
It is one of the most secure options to make payments. Carrying hard cash leads to robberies, crimes and more, which are minimised with use of digital money as the primary option. Hacking pin, card number and all needs special training and knowledge hence minimises the option of theft.
Easy to do transactions –
It can help you to make easy payments and withdrawals wherever necessary. It is easy to pay at stores, shopping places, movie theatres and more. You do not have to carry cash with yourself, and your plastic money will do all the work for you.
Downsides of Plastic Money
When there are benefits there are sure some downsides to it too, they are mentioned as below –
Cannot be used at all places –
There might be some stores where the system is yet not usable, and cash is the only payment option they accept.
Can land you in some debts –
If you are not careful and well-versed with using plastic money, you might go overboard with the transactions and might lead to repaying the debts.
Conclusion
Overall, plastic money is a revolution in the banking industry and has come up with great advantages for the customers who hold their accounts in banks that offer debit, ATM and even credit cards. Click here to know more about plastic money and how you can make the most of it.
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