Money economy developed because the erstwhile barter system (in which one product was exchanged for another) had become cumbersome in a complex society. In the beginning, money had intrinsic value – this means that you could ‘sell’ money itself instead of using it as a medium of exchange (for example, currency of gold would have intrinsic value itself). Besides, carrying of money was also considered cumbersome. Then token money developed, of which the paper currency is a recent development. Plastic money takes the concept of currency one step ahead. Under this system, the customer carries a card issued by a financial institution, which entitles him to purchase upto a certain limit. The merchant is reimbursed by the institution, and the customer reimburses the institution.
Depending upon when the reimbursement takes place, plastic money or cards can be of two types: credit cards and debit cards. In a credit card, you take money on credit (upto a pre-negotiated limit) to purchase from the merchant, and you pay the money back to the bank after the payment, typically at the end of the month, or thereafter. There is usually a grace period during which no interest is charged on payments. Payment done thereafter attracts a high rate of interest (it is this interest which mainly sustains the credit card industry). A debit card is different in that you take money out of your own account (in short, whereas a credit card is ‘post paid’, a debit card is ‘pre-paid’). This means that you do not have to pay any interest and that there is no transaction limit (so long as you have money in your account). Both types of cards have their advantages and their disadvantages and one must select to use them depending upon one’s convenience.
Plastic money has been a great invention. It dispenses with the necessity of carrying cash, and by enabling purchase everywhere, it enables more buying and faster money transfer, thus driving the economy. It was first introduced as petrol coupons in the USA during early 20th century. Thereafter, plastic money has seen tremendously popularity across the world. In this section, we provide a list of vendors offering credit and debit cards under various and attractive schemes.