Defination of plastic money :-

Term plastic money Definition: A slang phrase for credit cards, especially when such cards
used to make purchases. The "plastic" portion of this term refers to the plastic construction
of credit cards, as opposed to paper and metal of currency. The "money" portion is an
erroneous reference to credit cards as a form of money, which they are not. Although credit
cards do facilitate transactions, because they are a liability rather than an asset, they are
not money and not part of the economy's money supply.

Credit Cards

Credit cards or the plastic money has become a substitute for the cash nowadays. Whether
you are in need of instant cash during emergency, or its online shopping you want to do.
Credit cards play a crucial role in our life. Even most of the business establishments honour
the credit cards in lieu of cash. Various shopping malls, petrol pumps, retaurants etc. offer
special discounts to various credit card holders. 

Now, no more fear of cash loss or theft with the credit cards. No more cash crunch
anymore. Infact, if used properly and the payments are made on time, you get an interest
free credit for certain fixed period as well. 

Meaning of plastic money

Plastic money are the alternative to the cash or the standard 'money'. Plastic money is used to refer to
the credit cards or the debit cards that we use to make purchases in our everydaylife.  Plastic money is
much more convenient to carry around as you do not have to carry a huge some of money with you. It is
also much safer to carry it along or to travel with it as if it is stolen one can consult the bank whose
service you are using and get it blocked hence saving your money from getting stolen or even lost.
Nowadays even developing countries like India are encouraging the use of these plastic money more
than cash due to these reasons. Furtermore these credit and debit cards also have plastic used in their
making and that is where the name 'platic money' has originated from.

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or are unmerchantable. While they must generally exhaust the process provided by theretailer first, this is not
necessary if the retailer has gone out of business. This protection isnot provided by legislation when using a debit
card but may be offered to a limited extentas a benefit provided by the card network, e.g. Visa debit cards.
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When a transaction is made using a credit card, the bank's money is being spent, andtherefore, the bank has a vested
interest in claiming its money where there is fraud or adispute. The bank may fight to void the charges of a
consumer who is dissatisfied with apurchase, or who has otherwise been treated unfairly by the merchant.But when
a debitpurchase is made, the consumer has spent his/her own money, and the bank has little if anymotivation to
collect the funds.
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In some countries, and for certain types of purchases, such as gasoline (via a pay at thepump system), lodging, or car
rental, the bank may place a hold on funds much greater thanthe actual purchase for a fixed period of
time[6].However, this isn't the case in othercountries, such as Sweden. Until the hold is released, any other
transactions presented tothe account, including checks, may be dishonored, or may be paid at the expense of
anoverdraft fee if the account lacks any additional funds to pay those items.
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While debit cards bearing the logo of a major credit card are accepted for virtually alltransactions where an
equivalent credit card is taken, a major exception in some countriesis at car rental facilities. In some countries car
rental agencies require an actual credit cardto be used, or at the very least, will verify the creditworthiness of the
renter using a debitcard. In these unspecified countries, these companies will deny a rental to anyone who doesnot fit
the requirements, and such a credit check may actually hurt one's credit score, aslong as there is such a thing as a
credit score in the country of purchase and/or the countryof residence of the customer.
WHAT IS THE DIFFERENCE BETWEEEN A DEBIT CARD AND A
CREDIT CARD?
The difference between a "debit card" and a "credit card" is that the debit card deducts the balance
from a deposit account, like a checking account, where the credit card allows the consumer to
spend money on credit to the issuing bank. In other words, a debit card uses the money you have
and a credit card uses the money you don't have. "Debit cards" which are linked directly to a
checking account are sometimes dual-purpose, so
that they can be used as a credit card, and can be
charged by merchants using the traditional credit
networks.A merchant will ask for "credit or debit?"
if the card is a combined credit+debit card. If the
payee chooses "credit", the credit balance will be
debited the amount of the purchase; if the payee
chooses "debit", the bank account balance will be
debited the amount of the purchase.
The "debit" networks usually require that a personal
identification number be supplied. The "credit" networks typically require that purchases be made
in person and often allow cards to be charged with only a signature, and/or picture ID.However,
most merchant agreements in the United States forbid picture ID as a requirement to use a Credit
Card.
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CRDEIT CARDS
HISTORY OF CREDIT CARD:
CREDIT CARD:
A  credit card is part of a system of payments named after the small plastic card issued to users of
the system. It is a card entitling its holder to buy goods and services based on the holder's promise
to pay for these goods and services. The issuer of the card grants a line of credit to the consumer
(or the user) from which the user can borrow money for payment to a merchant or as a cash
advance to the user.
A  credit card is different from a charge card, where a charge card requires the balance to be paid in
full each month. In contrast, credit cards allow the consumers to 'revolve' their balance, at the costof having interest
charged. Most credit cards are issued by local banks or credit unions, and are theshape and size specified by the
ISO/IEC 7810 standard as ID-1.
HOW CREDIT CARDSWORK?
Credit cards are issued after an account has been approved by the credit provider, after which
cardholders can use it to make purchases at merchants accepting that card.
When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder
indicates consent to pay by signing a receipt with a record of the card details and indicating the
amount to be paid or by entering a personal identification number (PIN).Also, many merchants
now accept verbal authorizations via telephone and electronic authorization using the Internet,
known as a 'Card/Cardholder Not Present' (CNP) transaction.
Electronic verification systems allow merchants to verify that the card is valid and the credit card
customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to
happen at time of purchase. The verification is performed using a credit card payment terminal or
Point of Sale (POS) system with a communications link to the merchant's acquiring bank. Data
from the card is obtained from a magnetic stripe or chip on the card; the latter system is in the
United Kingdom and Ireland commonly known as Chip and PIN, but is more technically an EMV
card.
Other variations of verification systems are used by eCommerce merchants to determine if the
user's account is valid and able to accept the charge. These will typically involve the cardholder
providing additional information, such as the security code printed on the back of the card, or the
address of the cardholder.
Each month, the credit card user is sent a statement indicating the purchases undertaken with the
card, any outstanding fees, and the total amount owed.After receiving the statement, the
cardholder may dispute any charges that he or she thinks are incorrect (see Fair CreditBillingAct
for details of the US regulations). Otherwise, the cardholder must pay a defined minimum

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proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount
owed. The credit issuer charges interest on the amount owed if the balance is not paid in full
(typically at a much higher rate than most other forms of debt). Some financial institutions can
arrange for automatic payments to be deducted from the user's bank accounts, thus avoiding late
payment altogether as long as the cardholder has sufficient funds.
INTEREST CHARGES:
Credit card issuers usually waive interest charges if the balance is paid in full each month, but
typically will charge full interest on the entire outstanding balance from the date of each purchase
if the total balance is not paid.
For example, if a user had a $1,000 transaction and repaid it in full within this grace period, there
would be no interest charged. If, however, even $1.00 of the total amount remained unpaid,
interest would be charged on the $1,000 from the date of purchase until the payment is received.
The precise manner in which interest is charged is usually detailed in a cardholder agreement
which may be summarized on the back of the monthly statement.
The credit card may simply serve as a form of revolving credit, or it may become a complicated
financial instrument with multiple balance segments each at a different interest rate, possibly with
a single umbrella credit limit, or with separate credit limits applicable to the various balance
segments. Usually this compartmentalization is the result of special incentive offers from the
issuing bank, to encourage balance transfers from cards of other issuers. In the event that several
interest rates apply to various balance segments, payment allocation is generally at the discretion
of the issuing bank, and payments will therefore usually be allocated towards the lowest rate
balances until paid in full before any money is paid towards higher rate balances. Interest rates can
vary considerably from card to card, and the interest rate on a particular card may jump
dramatically if the card user is late with a payment on that card or any other credit instrument, or
even if the issuing bank decides to raise its revenue.
BENEFITS TO CUSTOMERS:
The main benefit to each customer is convenience. Compared to debit cards and checks, a credit
card allows small short-term loans to be quickly made to a customer who need not calculate a
balance remaining before every transaction, provided the total charges do not exceed the maximum
credit line for the card.
DETRIMENTS TO CUSTOMERS:
Credit cards with low introductory rates are limited to a fixed term, usually between 6 and 12
months after which a higher rate is charged.As all credit cards assess fees and interest, some
customers become so encumbered with their credit debt service that they are driven to bankruptcy.
Credit cards will often stipulate a default rate of 20 to 30 percent in the event a payment is missed.
That is, if a consumer misses a payment, the rate will automatically increase to a very burdensome
level. This can lead to a snowball effect in which the consumer is drowned by unexpectedly high
interest rates. Further most card holder agreements enable the issuer to arbitrarily raise the interest
rate for any reason they see fit.