Credit Cards Introduction – Advantages As Well As Disadvantages

Commercial Banks accept introduced Credit Card facilities inward the early on 1980’s. From then, the facility has choke pop with Blue Planet equally good equally banks.
Features of Credit Cards :
  • Acts equally a document of credit worthiness of card-holder in addition to minimizes the exercise of difficult cash inward setting the 24-hour interval to 24-hour interval transactions.
  • It acts equally a medium of exchange.
  • Helps to purchase whenever the cardholder likes to purchase in addition to tin pay whenever he likes.
  • In India, credit carte du jour interests are typically charged at a charge per unit of measurement of 3.35 – 3.49% per month.
  • The cardholder has to pay an initial annual deposit.
  • Credit cards are mostly used past times elite corporate executives, businessmen, middle income gropu to purchase consumer durables in addition to certainly services from railways hospitals etc.
  • Now a days almost all banks are providing credit carte du jour facilities.
  • No affair where the cardholder is, he does non accept to worry virtually to send plenty coin for his / her purchases.
  • Bankers bears the terms of issuing credit cards.
  • Banks likewise bears the run a hazard of non payment past times the carte du jour holders.
  • The income for the banking enterprise is the excess committee received from the seller over involvement factors in addition to administrative in addition to promotion costs.
  • Credit boundary is specified on every carte du jour basing on the income marking in addition to type of the card.
Benefits to Credit Card Holders :
Credit cards offers the next benefits to carte du jour holders
  • Useful inward Emergencies : They tin purchase goods in addition to services at large number of merchant outlets upto inbuilt ceiling credit boundary amount without cash or cheque. This is to a greater extent than oft than non useful inward emergencies.
  • Interest gratis catamenia : Card holder has the catamenia of involvement gratis credit depending upon the issuing banking enterprise in addition to carte du jour scheme. i.e., the normal carte du jour in addition to gilt cards equally offered past times diverse banks. The catamenia of involvement gratis credit gain from xv days to 51 days in addition to at that spot after involvement @ 3.35 – 3.49% per calendar month charged.
  • Cash withdrawal from ATMs : Cash upto a ceiling inside the credit boundary tin hold out obtained from banks’ branches or ATMs.
  • Need to send liquid cash : Credit carte du jour holder require non send whatever liquid cash. He tin purchase without whatever cash in addition to pay later.
  • Benefit of gratis accident Insurance Cover : The carte du jour holder likewise instruct a gratis accident insurance encompass in addition to add together on carte du jour for husband in addition to children.
  • Useful for other purposes : Credit cards tin likewise hold out used for rails reservation, air ticket booking, hotel booking, sending gifts etc.
 Advantages of Credit Card to the Issuing Bank :
  • Reduces operational terms : Credit carte du jour reduces operational terms of the banking enterprise in addition to increases their accomplish in addition to profitability.
  • Enhancing the client base of operations : Credit carte du jour likewise enhances the construct ikon of the carte du jour issuer in addition to increases its client base. 
Disadvantages to Credit Card Holders :
  • Over Spending :Credit Card facility oftenly results inward over purchasing in addition to over spending unintentionally.
  • Possibility of Frauds : There is possibility of frauds due to loss of cards inward the intervening periods.
  • Possibility of forged signatures : Since signatures are already on the cards, forged signatures could drive a loss to the cardholders. Such form of forged signature loss could hold out avoided with exercise of Photo Credit Cards (credit Cards with the photographs of the user.).

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