Plastic money or polymer money,made out of plastic, is a new and easier way of paying for goods and services. Plastic money was introduced in the 1950s and is now an essential form of ready money which reduces the risk of handling a huge amount of cash. It includes debit cards, ATMs, smart cards,etc.
The plastic note are same as paper but the only difference is that they are made of plastic and more secured but in travelling and shopping people used to carry huge cash which was very unsecured and also increasing crime rate. Then the cards are introduced in the world to resolve the issue of carrying huge cash. Now the world is becoming globalize so every card is accepted everywhere with the power of VISA which interconnect the different countries.
Uses of Plastic Money
- Offer free use of funds,provided the customer to pay full balance in time.
- It is more convenient to carry than cash.
- It helps in establishing a good credit history.
- Provide a convenient payment method for purchases made on the Internet and over the telephone.
- Give incentives, such as reward points, that we can redeem.
Limitations of Plastic Money
- Cost much more than other forms of credit,such as a line of credit or a personal loan, If customer does not pay on time.
- Damage customer credit rating if the payment are late.
Factors Affecting Utilization of Plastic Money
- Quick service
- Less Botheration
- Home and Online Shopping
- Educations level of customers
- Monthly income of the customer
- Low bank charge
- Reputation of the bank