In previous article we read how all it all began, now we will see how money evolved from time to time.
As human beings, new and improved means of communication, transport and convenience were discovered. People also wanted to have all kinds of luxuries at their beck and call and this needed larger sums of money. But people didn’t felt safe to carry large sums of money in the physical form. Creating a more convenient form of money was thus necessary. This led to the invention of plastic money. Plastic money is a term that is used with reference to hard plastic cards we use on a daily basis in place of cash or coins.
Plastic cards came into existence in many different forms such as cash cards, credit cards and debit cards. The inventor of the first bank-issued credit card was John Biggins of the Flatbush National Bank of Brooklyn in New York, USA. In 1946, Biggins invented the “Charge- It” programme between bank customers and local merchants.
Let’s look at some forms of cashless transactions :
This type of plastic money will directly deduct money from the cardholders bank account when any goods or services are purchased. The card is linked to one’s and one can spend or withdraw money through a debit card until the bank account supports the withdrawals.
Unlike debit cards, credit cards allow you to spend money even if there is no cash in your bank account. In fact, these cards are not linked to a bank account. Every credit card issuer has a set limit and one can swipe it until that limit is attained. One can also withdraw money on a credit card. Simply put, it means one can buy without having money in one’s bank account to an extent bank has permitted. Each month the cardholder will receive a bill from the credit card company issuing company starts charging the cardholder interest on balance amount due. Normally, a 2% to 3% interest is charged on the monthly use of credit card.
So if you buy something worth Rs. 10,000 and do not pay the credit card bill on time they will start charging you interest and the amount may go up to Rs.11,500 in six months and can rise up to Rs. 13000 too. It is thus always suggested not to use a credit card to buy anything.
In case if you need to use a credit card then it is essential to pay the bill immediately
A very important part of both debit and credit cards is the CVV (Card Verification Number) and PIN ( Personal Identification Number). This should not be shared with anyone and in case if the card is lost, it should be reported and blocked immediately.
Digital or Electronic Money
With the internet boom in 2002, digital money or electronic money gained momentum. With this kind of service, people did not need to travel to the bank for their transactions. Instead, the transactions can take place in a few seconds at your fingertip with the help of internet and cellphone. With the help of this, you can carry your bank account in your pocket. This system also enables one to pay people across the world.
This technology also allows you to buy goods from online stores like Amazon or Flipkart by paying online and getting the delivery at home. Many sites like Paypal help you with this coordination. But a word of caution, one needs to be very careful while using Internet banking and one must never give banking passwords to anyone.
– Jane Sha