Types of Plastic Money Merits and Demerits 2021 | Importance of Plastic Money in India

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Learn in detail about the Plastic Money Merits and Demerits by reading these well-described essays.

As its name suggests, plastic money is money made from plastic. It is widely used as a means of payment in exchange for goods and services in order to reduce the amount of money used for cash payments. Plastic money became popular in the 1900s, and the first plastic credit card was used in the United States. In other words, using plastic money meant that payment systems would no longer be cash-based. In addition to ATMs, debit cards, and credit cards, plastic money is also available through banks.

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Plastic Money Introduction

Credit cards, especially when such cards are used to make purchases, are known as credit cards. In other words, the “plastic” part of this term refers to the construction of credit cards. This is in contrast to the paper and metal of currency. As mentioned above, the “money” portion is a misunderstanding regarding credit cards, which are not money. Even though credit cards facilitate transactions, they do not constitute money or part of the money supply of an economy because they are liabilities rather than assets.

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Plastic Money Merits and Demerits

Different Types of Plastic Money

• Cash Cards: are those cards that, when used by Authorized Teller Machines (ATMs), allow the holder to withdraw money from their bank but cannot be used for making direct purchases.
• Credit Cards: As with Cash Cards, Credit Cards allow the users to withdraw money from an ATM, and they also allow for purchase transactions directly, but unlike Cash Cards the cardholders receive a high-interest loan, although they can avoid any interest costs by paying off the balance in full every month.
• Direct Debit Cards: These cards can directly debit money from your bank account, allowing you to make purchases from vendors directly. Since a debit card is related to a bank account, there is no credit facility per se, however, the limit is determined by the amount of money in the account. If there is an overdraft facility, then the limit is determined by the amount of the overdraft.
• Pre-paid Cash Cards: Adding credit to a pre-paid card was intended to make it easier for the user, and the user will not be able to exceed the amount. Basically, they are “re-usable” in the sense that they can be reloaded, however, some cards, generally marketed as Gift Cards, couldn’t be re-loaded and had to be thrown out once the credit was used.
• Store Cards: The concept behind the store card is similar to the credit card in that you purchase goods in the store and are billed for the purchase at the end of the month. Cardholders of these cards usually have to pay extremely high interest rates, as they may be limited as to where they can be used, sometimes even to the store brand that issued the card.

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Now we going to tell you our main topic Plastic Money Merits and Demerits

Advantages and Disadvantages of Plastic Money

Also called Pros and Cons of Plastic Money

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Advantages of Plastic Money

• Unlike paper money, plastic money does not burn easily and can withstand higher temperatures.
• It is impossible for you to be afraid of being robbed.
• Plastic money does not absorb dirt or stains as easily as paper currency.
• In the credit and debit card industry, plastic money is used as payment. It’s a plus to use plastic money since you won’t have to carry cash around with you all the time.
• Also, it doesn’t deteriorate over time, nor does it rip and tear as paper does.
• We reward you with reward points, such as points you can redeem.
• The convenience of carrying cash over cards.
• We save money by printing fewer notes.
• Paper notes don’t give the same level of durability as those made of plastic.
• With this convenient method, customers can pay online or over the phone for their purchases.
• Assist you in getting a positive credit history.

Disadvantages of Plastic Money

• A personal loan will cost you substantially more if you fail to pay on time than other forms of credit, like a credit line;
• When you fail to make your payment on time, you may damage your credit rating;
• You should not be allowed to accumulate more debt than you can handle;
• Explicitly state the terms and conditions;
• Additionally, it does not dull over time as paper does, nor does it rip or tear.
• Additionally, paper money is prone to being stained and soiled more easily than plastic money.
• Paper money does not really have any advantages, other than being cheaper to print.

Essay on My Favourite Serial Plastic Money Merits and Demerits

Plastic Money Merits and Demerits

Merits of Plastic Money:-

• Reduces the need to carry cash: As well as providing convenience, plastic money eliminates the inconveniences caused by carrying cash. The job of a working executive typically involves a lot of interstate travel. As a result, he or she will incur a number of travel expenses, lodging expenses, food, etc. A money belt is not just a nuisance, but there is also a possibility of theft in such a case.
• Reduction in crime: By using credit or debit cards, crimes and thefts are reduced to some extent. Hacking the PIN of a credit card is very challenging since one must know specific techniques to hack the PIN. Hence, the credit card holder can be somewhat assured of the security of his/her money. Furthermore, the cardholder can also notify the bank as soon as possible if the card is stolen.
• Credit cards provide a credit facility: Individuals can now borrow and pay for goods and services using credit cards, allowing them the benefit of a credit facility. The same kind of advantage is not available when making purchases with cash. In addition, credit cards do away with the need to go behind people’s backs in case of emergencies and financial hardships.
• International acceptability: When you have an international credit or debit card, you can avoid running out of cash simply by using the card to make purchases. Additionally, currency conversion can be eliminated, which is an inconvenience.
• Ease in making payments from home: Payments can be made online, funds can be transferred, and other transactions can be carried out with credit cards and debit cards. Through plastic money, you can easily make purchases in online shops. Additionally, some online retailers provide discounts on making payments by credit or debit card.

Demerits of Plastic Money:-

• Plastic money cannot be used everywhere: The only way to make payments in several places is with cash. Payments to the milkman, newspaper boy, and the like, for example, might be made when purchasing utilities from a small retailer. Cash is usually accepted as an offering at a temple or other religious establishment. Since cash is the primary medium of payment, plastic money cannot fully replace it and, therefore, cannot be used everywhere.
• Plastic money is also not completely safe: There is a certain amount of risk involved when we use plastic money to make an online purchase since we are providing bank details and other financial information over the internet, which is not always a secure medium. It is very important to take caution when sharing important details about oneself on the Internet since there are certain malicious websites that target people with the intent to rob them.
• Interest liability: The fact remains that we are generally given a lot of time to pay for purchases made through credit cards, but it cannot be ignored that after the expiration of the grace period, the card holder is responsible for paying interest. Making a cash payment does not give you this option.
• Impulsive purchases: Payments are easy, but with ease comes the inability to keep control of purchases and ensure that the purchased item is worth the investment.
• Damaged card: There are times when wear and tear or mishandling result in the magnetic chip of the cards becoming damaged. Such an event may make a person feel obliged to carry cash to avoid embarrassing themselves. There is a chance that this will happen, even though it is a rare occurrence.

Here We covered all about Plastic Money Merits and Demerits but you must read Pre-cautions also it is very important.

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PRE-CAUTIONS

Don’t write down your PIN number anywhere. You should change it as soon as the card is received from the bank. Make sure you use an ATM located in the bank or manned by an employee 24 hours a day. You can use the virtual keyboard while using the online settlement. Note that you can sign up to receive an SMS alert every time your account is accessed. Changing your PIN number as frequently as possible is recommended. You must immediately inform your bank if the card is lost.

Importance of Plastic Money

Increasingly, people are using plastic money in their daily lives. In the context of ‘plastic money,’ technology is utilized to facilitate digital transactions that can be conducted without having to go to a bank every time.

In addition to its many advantages, plastic money offers several other benefits. As a matter of fact, transactions are extremely transparent when they are done through technology. By doing so, corrupt practices are prevented. Also, plastic money has the advantage of being extremely handy. Getting a smart debit card is at the end of the day much easier than carrying a lot of cash!

In case your plastic money cards are lost, you can immediately get them blocked to prevent fraud. Plastic Money Merits and Demerits

Short Essay on Plastic Money 700 Words in English

For students in classes 7, 8, 9, and 10 as well as those preparing for competitive exams, we have provided a long essay on Plastic Money with 700 words. The long essay on the topic is suitable for students of classes 7 to 10 and for students who are preparing for competitive exams.

The money we use today is made up of paper cash rather than coins. The use of plastic money has grown to a huge extent as a result of rapid technological advancements and exponential growth. Unlike cumbersome and expensive coins and notes, electronic payments are initiated by different types of plastic cards and offer a promising future for the 21st century. The introduction of plastic money occurred in the 1950s. Compared to cash, it has several advantages. In more precise terms, it refers to money cards such as credit cards, debit cards, and so forth.

Our lifestyles have been completely transformed by the invention of plastic money. Since then, we can safely carry out financial transactions. You need no longer bring hard cash when traveling to a foreign country, and you needn’t worry about it being stolen when you do. The payment systems in the banking system have undergone a great deal of change since the technological revolution in the financial sector took place. Privatization and globalization have led to an increasing number of innovative payment methods. Plastic Money Merits and Demerits

Credit cards and debit cards instilled a level of convenience to merchants that couldn’t be matched by other payment methods. Plastic money is referred to as plastic money since cash has been replaced by plastic cards. Many businesses are still able to reach the maximum number of customers even though they have fewer physical branches using plastic money. In the 21st century, plastic money is such a familiar feature of the world’s lifestyle that it has become hard to imagine an economy without it.

The number of purchases made with plastic money in India has risen sharply. In recent years, online payment has become a popular method of paying for retail goods. The Indian public has been reluctant to accept plastic money for many years. This is due to their long-held belief that spending through credit is the fastest way to get into debt and commit fraud. Plastic Money Merits and Demerits

Recently, however, thanks to increased security, its use has risen, especially among women, students, and small business owners. There is also growing acceptance for it in rural India. Approximately 25% of HDFC Bank’s credit card lending is now sourced from rural and semi-urban areas, the second-biggest private lender on the Indian market.

It offers the tremendous advantage of allowing you to borrow money without converting your money or having to visit a bank. As a result, travelers are relieved of the burden of carrying and securing large amounts of cash. Using a debit or credit card helps them pay easily, as well as getting the best exchange rate on currencies. There is no place where plastic money cannot be accepted.

You can even get cash immediately from your nearest ATM even late into the night. Online shopping has made life easier since everything can be purchased from the comfort of one’s home. This method saves time by reducing the need to travel and find things. With plastic money, movie-going queues can be avoided well in advance by purchasing tickets for shows or movies. Online flight, train, and hotel reservations are possible within a few clicks. Neither the buyer nor the seller has to make any additional effort.

The use of online payments is actually getting people discounts. Banking industries have improved their customer service by providing 24×7 customer service through plastic cards. Managing the security of these cards has also never been an issue since banks and financial institutions have handled it themselves. This ensures that it is 100 percent secure and without any tension. Plastic Money Merits and Demerits

Many people now only transfer money via credit cards for EMIs and loans. Plastic money has, however, caused problems for both the business community as well as the general public. There are numerous websites and shops that accept only certain cards from specific companies. A situation such as this requires cash as the only mode of payment since people who otherwise use only credit cards cannot get cash. The magnetic stripe of a card can wear down from heavy use over time.

During a trip when such a situation occurs, and the only way the traveler has access to cash is through this card, the traveler must wait until a new card is delivered. In exchange for high-interest rates, credit card companies require repayment within a limited time frame. Even if consumers use debit cards, there are service fees that they are unaware of. This theft of gift cards is equivalent to a great deal of stolen money.

FAQ on Types of Plastic Money Merits and Demerits

Conclusion

In the modern-day, most people prefer to pay with debit or credit cards rather than cash. Plastic money was used more frequently as a result. In recent years, major social and technological innovations have caused a monumental change in the banking industry. In India, sophisticated technologies are becoming available to support cashless transactions; however, perceived disadvantages, including the need for high IT investment and security concerns on the part of service providers, and the traditional mindset of Indians who prefer to use physical money, seem to outweigh the benefits. Advances in technology and improvements in the payment system have resulted in the further development of plastic money.

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