Introduction Plastic money aka polymer money is made out of plastic and has formed an important part of our daily life these days. It is easier to deal with cards than cash. Yes, the advantages of plastic money over cash has made it a best friend of many. It was in the 1950s the concept of plastic money came into being. When we say plastic money, it includes debit cards, ATM cards, credit cards, prepaid cards, smart cards and so on. The main advantage of plastic money is that it avoids the necessity to carry huge cash and is also difficult to mutilate. The disadvantage being there are still many among us who do not know how to use a plastic card wisely. This articles deals in general about the main merits and demerits of polymer money.
Advantages of Plastic Money Cash vs Plastic money; which one will you go for? If you are the one who always forgets your PIN number, cash is the best option for you. As saving the PIN in mobile is not a good idea. What if mobile gets lost? We need to think about all possibilities as it is our hard earned money. There are many advantages of carrying plastic money. The convenience, the quality of cards when compared to bank notes, difficulty to duplicate easily like notes etc are a few to name. You need to get a better idea of the advantages, isn't it? Let us learn in detail the advantages of using plastic money instead of cash.
Cards fit into the wallet easily: It is essential that we need to have some sort of money in hand always as we never know when a need arises. But carrying a lot of cash in hand is not at all a wise idea. Also, who would want to carry a lot of cash in hand and make their wallet bulge out. In such situations, plastic money comes for help. Your wallet will remain perfect and your cash needs will also be sorted out. If required you can take cash using plastic cards. Also, it is safe when you have a card with you as even if it is lost, you can always call the bank and ask them to block it. This avoids misusing the card by any. But when it is cash, you are not left with that option and you will end up losing your money. Cards are waterproof hence you don't have to get panicked even if water spilled over your wallet. They are strong and durable.
Crime rates will decrease: We are living in a world where thefts and crimes are on the increase. Keeping cash in hand is not a safe thing to do. It will not give you peaceful nights. So be practical and opt for plastic money. You do not have to worry when someone runs away with your wallet, as long as you only have plastic money in it. The guy needs, PIN number to use it hence he can't take the cash or swipe it. As soon as you know that you are pickpocketed, you can call the bank and ask them to block or cancel the card. If it was actual cash in its place, then it is easy for the thief. He can easily take the cash and throw the wallet somewhere. But with plastic money, his job has become a difficult one. He needs to know cracking techniques to find the PIN number to use the cards. Hence worries associated with theft will be less in case of plastic money. Another merit is that the fingerprints on a plastic card are more clear than that on bank notes.
Provides credit facility: How about having a card that provides you a credit facility? That sounds good right? With the advent of credit cards you can purchase anything today and you are given sufficient time to pay for it. Only with plastic money, you avail this credit facility. The advantage of having this facility is that you need not go behind people to borrow money in case of emergencies, instead, you can use the card in your hand. Also, you get ample amount of time to repay the amount. It is like a best buddy who helps you in case of financial needs. Purchase today and pay later, isn't that a benefit you are getting? This factor is one of the main reasons why people are attracted towards credit cards.
Tracking transactions becomes easy: Having a track of your daily or monthly transactions is always good. By using the plastic money you are automatically keeping a track of all your transactions. You can verify it later if required. When we are using bank notes, we might forget later for what we spend it, unless you have the habit of noting down every cash transaction you make. This is not the case with plastic cards. The banks normally send the statement of debit or credit card to its customers on a monthly basis which will have the list of all your transactions for that particular month. This transaction history might help us at times when we misplace a bill. We can show the transaction details to prove that we have made a purchase. Also, for us to have a check of our expenses or any particular transaction made in the past, these statements are useful.
0% Installment options: Certain credit cards provide its customers the facility to convert their purchases from selected outlets to installment options of 3, 6 or 12 months at 0% interest rate. The customer is given the option to select the period of installment which cannot be changed later. If you have selected 6 months installment plan and paid it off within 5 months, then you will have to pay an extra fee. Therefore, be careful and pay only according to the installment period selected. It is an amazing facility offered by the banks as it helps you to purchase that thing you wish today and pay in equal installments within a period of specific time. Will you avail this facility if you are using cash? A big No is the answer. Therefore, this is indeed an advantage of plastic money.
Convenience of making payments from home: In olden days when there was no plastic money, we need to go personally to each place to make a payment be it utility payments or booking tickets. But now you can pay at your own convenience sitting at home with the use of plastic money. For example, you need to go to the travel agency to pay cash for your ticket, instead, you can book your ticket online. Also when a travel agency is involved, they charge commission or fee but when you are booking the ticket directly from the airline's website, you are saving on it. Plastic cards can also be used for online purchases. We can see many online shops coming up these days. If you find something interesting on a website and would want to have it, you can always purchase it anytime using plastic money. Another advantage is that certain websites do not charge you the service fee if you are making payment through plastic money as the payment is done upfront. A service fee will be charged in cash on delivery option. Plastic money can be used 24 * 7 for online purchases.
Is internationally acceptable: One of the main advantages of plastic money is that the same card can be used locally as well as internationally. For example, you can get rid of the hassle of converting the cash into the currency of the country you are planning to travel. If you have an international debit or credit card, you can make your purchases with that card itself. So the problem of running out of cash will not happen even if you are abroad and that helps you to have a safe journey without worrying about the cash and budget. Sometimes we end up not buying something that we actually like due to insufficient cash but when you have a credit card with you, you can always purchase it and pay later. Especially from abroad as it is not practically possible to visit the country again to buy stuff.
Disadavanatges of Plastic Money Like everything, plastic money also has its own merits and demerits. We should wisely use it keeping all the below points in mind. If you are clever, you can make use of the cards but not everyone can be clever. So for those who are not well aware of the cards and its disadvantages should always be careful to avoid themselves being in trouble. Many people play with cards and might not end up paying a single penny as interest. Never follow them as not everyone is smart with cards and we might end up losing money.
Just plastic money won't help always: Plastic money is not a complete replacement for cash. In certain places, we need cash itself. While buying fish from the market or when paying to the newspaper boy, we need cash itself as they do not carry POS machine to swipe the plastic money. Similarly, we pay money at religious places for offerings, there also they do not take plastic money. Unless we have the facility to use plastic money everywhere, we cannot replace cash completely. Still, there are small retail shops which do not take plastic money. In villages, hardly we find any shops that accept plastic money. It makes us necessary to carry some cash always for our safety.
Plastic Money is also not 100% safe: There is a certain amount of risk involved in transactions which involves plastic money as well. Especially when doing online shopping. We are exchanging the details relating to our card over the internet which is not always a safe place. Some websites are just set up to steal our financial information and loot money thereby. We should not fall in to such scams and hackers. One should be a smart online shopper in this world.
Minimum purchase requirements: One of the major disadvantages of using plastic money is that one needs to make a minimum purchase in order to swipe their card. For instance, if the minimum purchase is Rs. 50.00; and we have purchased items for only Rs. 40.00, you can't use your card for this transaction unless you purchase for Rs. 50.00. In this case, you will have to purchase something unnecessary to make it Rs. 50.00. If we had sufficient cash in hand, we could have avoided spending extra Rs. 10.00
Service charge in certain cases: When we are using plastic money instead of cash, in certain cases the bank charges a service charge for the purchase of certain items. For instance, in some countries, the service charge is levied on card transactions when you purchase gold from jewelry. When paying cash, this additional charge will not be taken.
Card too can get damaged: Imagine a situation wherein you have made a purchase and when at the counter you realize that your card is damaged or when trying to swipe, the transaction is not getting proceed due to some chip error or damage. You will definitely wish if you had some cash in hand. These cases occur only when plastic money is used. It might be a rare case but the possibility cannot be completely ignored.
Interest, for non payment: A credit card allows you to purchase today and pay for at a later period of time. It gives you a credit period, but if we fail to make the payment within the due date, interest will be charged. When we are using cash, we are not taking any credit from the bank, hence non-payment does not occur.
Conclusion We are living in a world where almost every other person holds plastic money along with cash. But we should know the advantages and disadvantages of it in order to use the plastic money efficiently. It is true that at times plastic money is of great help but we should admit that it is not the case always. One should be wise when using plastic money or cash. Whatever it is, money has value and we should not fall a victim for thefts be it online or not.