1. PLASTIC MONEY

2. Plastic money/Currency & Payment cards
Plastic money/Currency: It is a term increasingly being used to refer to all forms of credit cards, debit cards, retailer cards, diner cards and other types of plastic cards which we use daily instead of actual currency notes.
Payment cards are part of a payment system issued by financial institutions, such as a banks, to a customer that enables its owner (the cardholder) to access the funds in the customer's designated bank accounts, or through a credit account and make payments by electronic funds transfer and access automated teller machines (ATMs).

3. Aims and objectives of using plastic money & Payment cards
To reduce the expenditure on printing & disposing currency notes.
To make the monetary transactions more transparent.
To provide convenience. There is no need to carry big bulks of cash in the wallet. Saves the time spent on repeated visits to the banks.
To ensure safety and security. If a card is lost the owner can ask the bank to block the payment. In this way he does not lose any money.
To obtain a durable form of money. Plastic money is more durable than paper notes.

4. Features of a Payment card
A payment card is electronically linked to an cardholder’s deposit accounts or loan or credit accounts.
A payment card  is also a smart card that contains a unique card number and some security information such as an expiration date or CVVC(CVV) or with a magnetic strip on the back enabling various machines to read and access information.
Depending on the issuing bank and the preferences of the client, this may allow the card to be used as an ATM card, enabling transactions at automatic teller machines; or as a debit card, linked to the client's bank account and able to be used for making purchases at the point of sale; or as a credit card attached to a revolving credit line supplied by the bank.

5. Major Types of Plastic Money
Credit card
Debit card
Charge card
ATM card
Stored-value card
Fleet card

6. Credit cards
A credit card is linked to a line of credit (usually called a credit limit) created by the issuer of the credit card for the cardholder on which the cardholder can draw (i.e. borrow), either for payment to a merchant for a purchase or as a cash advance to the cardholder.
Most credit cards are issued by or through local banks or credit unions, but some non-bank financial institutions also offer cards directly to the public.
The cardholder can choose either to repay the full outstanding balance by the payment due date or to repay a smaller amount, not less than the "minimum amount", by that date.
In case of repaying the full outstanding balance by the payment due date, interest is typically not charged.
In case of repaying a smaller amount, not less than the "minimum amount", by that date the cardholder will be charged with interest. The rate of interest and method of calculating the charge vary between credit cards, even for different types of card issued by the same company.
Many credit cards can also be used to take cash advances through ATMs, which also attract interest charges, usually calculated from the date of cash withdrawal. Some merchants charge a fee for purchases by credit card, as they will be charged a fee by the card issuer.

7. Debit cards
With a debit card (also known as a bank card, check card or some other description) when a cardholder makes a purchase, funds are withdrawn directly either from the cardholder's bank account, or from the remaining balance on the card, instead of the holder repaying the money at a later date. In some cases, the "cards" are designed exclusively for use on the Internet, and so there is no physical card – known as ‘net-banking’.
The use of debit cards has become widespread in many countries and has overtaken use of cheques, and in some instances cash transactions, by volume. Like credit cards, debit cards are used widely for telephone and internet purchases.
Debit cards can also allow instant withdrawal of cash, acting as the ATM card.
Merchants can also offer "cashback"/"cashout" facilities to customers, where a customer can withdraw cash along with their purchase. Merchants usually do not charge a fee for purchases by debit card.

8. Charge cards
With charge cards, the cardholder is required to pay the full balance shown on the statement, which is usually issued monthly, by the payment due date.
It is a form of short-term loan to cover the cardholder's purchases, from the date of the purchase and the payment due date, which may typically be up to 55 days.
Interest is usually not charged on charge cards and there is usually no limit on the total amount that may be charged.
If payment is not made in full, this may result in a late payment fee, the possible restriction of future transactions, and perhaps the cancellation of the card.

9. ATM cards
An ATM card is any card that can be used in automated teller machines (ATMs) for transactions such as deposits, cash withdrawals, obtaining account information, and other types of transactions, often through interbank networks.
Cards may be issued solely to access ATMs, and most debit or credit cards may also be used at ATMs, but charge and proprietary cards cannot.
The use of a credit card to withdraw cash at an ATM is treated differently to an POS transaction, usually attracting interest charges from the date of the cash withdrawal. The use of a debit card usually does not attract interest. Third party ATM owners may charge a fee for the use of their ATM.

10. Stored-value cards
With a stored-value card, a monetary value is stored on the card, and not in an externally recorded account.
This differs from prepaid cards where money is on deposit with the issuer similar to a debit card.
One major difference between stored value cards and prepaid debit cards is that prepaid debit cards are usually issued in the name of individual account holders, while stored-value cards are usually anonymous.
The term stored-value card means that the funds and or data are physically stored on the card. With prepaid cards the data is maintained on computers controlled by the card issuer.
The value stored on the card can be accessed using a magnetic stripe embedded in the card, on which the card number is encoded; using radio-frequency identification (RFID); or by entering a code number, printed on the card, into a telephone or other numeric keypad.

11. Fleet cards
A fleet card is a special card used as a payment card most commonly for gasoline, diesel and other fuels at gas stations.
Fleet cards can also be used to pay for vehicle maintenance and expenses, at the discretion of the fleet owner or manager.
The use of a fleet card reduces the need to carry cash, thus increasing the security for fleet drivers. The elimination of cash also helps to prevent fraudulent transactions at the fleet owner's or manager's expense.
Fleet cards provide convenient and comprehensive reporting, enabling fleet owners/managers to receive real time reports and set purchase controls with their cards, helping to keep them informed of all business related expenses. They may also reduce administrative work or otherwise be essential in arranging fuel taxation refunds

12. Advantages of Plastic Money
Eliminates the need for carrying huge cash: This eliminates the need for carrying huge load of cash which is risky and inconvenient too.
Risk of Loss or Theft minimized: In case of cash there is a high risk of losing cash and a chance of cash getting stolen. However, in case of debit/credit card you can report the matter to the bank and block the card to avoid misuse.
Anytime/Anywhere Access Using cards you have the unique advantage and convenience of using it anywhere in the country or even abroad.
Credit Facility: In case of credit card you have the option of buying on credit or paying later. Although the charges are high, it helps you in case of emergencies and contingencies.
Online Payments: You can use cards for online payments, fund transfers and various other transactions.

13. Disadvantages of Plastic Money
Non-Acceptance at Small Retail Outlets
Cannot be used for all daily needs
Loss & Misuse in Carrying or Keeping the Card
Low Value Transactions are costly
Service Charges
Damage to Card
Spending Habits & Impulsive Purchases
Overuse of Cards due to Special Offers, Discounts
Debt Trap