Plastic Moeny

Chapter-1 introduction & methodology chapter-2 description analysis(demography-variables

dependent nd independent) percentage analysis including review of literature chapter-3

feasibility & pilot study how they prepared questionnaire why? For every questions they have

to explain? Chapter-4 data analysis-compulsory to use any statistical analysis tool hypothesis-

define its tests chapter and statement of the problem

Plastic Money

Plastic money has come of age in the sultanate, with banks offering a wide range

of credit and debit cards to suit every budget, taste and need. Cards for shopping,

cards for fuel, cards for students, cards for the Internet - the world of quick and

easy money began as a convenience extended by financial institutions to those

who wished to take their money a long way, but it has now become indispensable

to the public in Oman.

Indeed, the convenience and rewards offered by these cards were lapped up the

moment they were introduced. As the number and features of these cards grew,

so did the customers' expectations of them. Today, the market is flooded with a

plethora of cards tailor-made for customers, and this has made the choice

difficult.

BankDhofar

In addition to its Visa Electron debit card, BankDhofar has a range of credit cards

that provide financial flexibility, worldwide acceptance, credit limits tailored to

individual needs, photo sign feature for recognition, 24 hours global cash access,

24-hour emergenc assistance and free travel insurance.

Al Noor Interest Free Card: Bank Dhofar is the only bank to have introduced an

interest-free card. The total monthly outstanding or spend is recovered in 12

equal installments including the flat fee.

Bank Dhofar Ecom Card: This card has been designed to make online shopping a

convenient and hassle-free experience for customers. Complete with several

security features, it offers customers the option of choosing their own credit limit,

which can be changed later on, to suit their needs. The minimum monthly

payment is five per cent and the card can be renewed for a fee of RO10.

BankMuscat

In addition to their Gold, Platinum and Classic credit cards and picture cards,

BankMuscat has a range of special cards targeting customers of all age groups

and budgets.

Corporate Card/Corporate Executive card: Designed for corporate houses and

senior executives, this card allows organisations to gain better control over

spending and allows employees maximum flexibility and convenience to plan a

travel and entertainment programme. It therefore takes care of a company's

financial needs, while also looking after its employees who are on the move.

Here, companies are given the flexibility to set credit limits for each employee,

within the overall corporate credit extended to the organization by the bank. It

allows cashless transactions as well as facilities for consolidated billing

statements and payments through account debit instructions. 

SQU Student card: Issued exclusively to students of Sultan Qaboos University,

this card enables holders to shop worldwide at all outlets accepting Visa cards.

The bank says the idea is to ensure that all SQU students have a convenient

payment instrument and learn effective money management skills.

Prepaid card:

 Introduced in association with the Royal Oman Police (ROP), this Visa electron card

can be used to make payments at retail establishments all over the world, withdraw cash

from ATMs, as well as make e-payments at all ROP directories. All nationals and

residents of Oman are eligible to apply for this card, irrespective of whether they have an

account with the bank or not. This card will have to be initially loaded for a payment for

RO11 and then reloaded at any of the bank's branches and cash deposit machines

nationwide.

Basma Rewards Program card:

This 'chip based rewards program' entitles Basma card holders to earn points every time

they make purchases at Oman Oil filling stations, Lulu Hypermarkets and other

participating outlets, irrespective of the mode of payment - cheque or cash. Five points

can be earned for a purchase of RO1 using the Basma card  These points can be

redeemed later.

Bank Sohar:

Bank Sohar offers a complete banking experience to its customers, through the various

credit and debit cards it has on offer. Each card comes with distinct features and benefits.

The bank says it uses the latest and most advanced information technology infrastructure

for its card services, which ensures that the customer gets a rewarding banking

experience. 

Visa Prepaid Card:

The Bank Sohar Visa Prepaid Card is a global card, accepted worldwide for making

payments. This card, preloaded with an amount determined by the customer, can be used

at fuel stations, stores, restaurants, theatres, shopping malls and even online. It can also

be used for cash withdrawals at ATMs.

A highlight of this card is that there are no charges, late fees, or debt accumulations on

the part of the customer. The daily withdrawal limit for the card at ATMs is RO500.

National Bank of Oman (NBO)

The bank, which has several 'firsts' to its credit in the card business, has specific cards

targeting different budget levels. This is in addition to its unique offering of credit and

debit cards. The bank also has the distinction of being the first and only bank to offer the

full credit limit as a cash advance and the first bank to offer credit cards without salary

assignment.

NBO-Oman Air Co-Branded Credit Card: This card offers customers, discounts on

Oman Air tickets and holiday packages, priority confirmation on Oman Air wait-listed

tickets, free access to the lounge at Muscat International Airport and money back loyalty

points on all transactions.

NBO Webshopper Card: The first 'virtual' card to be launched in Oman, the Webshopper

Card, designed for online transactions, is not embossed and does not have a magnetic

stripe or PIN. This means that the card cannot be used at ATMs or point of sale terminals

at shops. For added security, the card has a lower credit limit and is entirely independent

and additional to, the customer's existing limit on the NBO credit card. All customers of

the bank are eligible to receive the Webshopper Card.

NBO Salary Card:

The Salary Card comes with benefits like cost saving, minimum paperwork, no

minimum balance required, hassle-free banking transactions, and added security against

cash loss and theft. It is a comprehensive payroll management product that offers

practical, cost-efficient solutions that increase the profitability and operating efficiency

of companies with a large workforce.

Oman Arab Bank (OAB)

The bank is not far behind when it comes to offering cards with different features, over

and above its regular offering of debit cards and Gold, Classic and Platinum credit cards.

Most of these 'value' cards are extremely popular and much in demand.

Smart Card/Smart Card Corporate: This offers a unique mode of electronic payment that

allows holders, both individual and corporate, to settle financial dues to both the

government and private sectors. The Smart Card comes with high security and data

protection features, maintains separate accounts in offline and online modes, provides

regular account balance statements to the cardholder and beneficiary, allows instant

deactivation of the card in the case of loss, and even permits individual holders to settle

bills of purchase at many large supermarkets across the country, not to mention filling

stations and other designated stores.

The Smart Card is a 'prepaid card' where the customer loads a certain amount of money

onto the card and uses it till the money runs out. Both customers of the bank, as well as

non-customers, are eligible to acquire a Smart Card. The amount of RO1 is charged for

opening the card.

Kunooz Card: This 'charge' card allows customers to accumulate points for purchases

made at any of the designated shops across the country, including Sultan Centre, Safeer

Hypermarket, Lulu Hypermarket and several big and small restaurants. Three points are

earned for every RO1 spent. When the customer earns a total of 1,000 such points, he

receives a gift voucher of RO25 to be used at the designated shopping centres.

The Blue Kunooz Card for men and the Pink Kunooz Card for women are available only

to customers of the bank. A minimum balance of  RO100 needs to be maintained in the

bank's account, to be eligible to receive the card.

Visa Internet Shopping Card:  This 'credit' card is for the purpose of online shopping.

The minimum credit limit on the card is RO50 and the maximum RO1,000. An annual

fee of RO12 is charged for the Internet Card and it can be renewed for a period of two

years. The interest rate charged on purchases made with the card is 18 per cent for

ordinary customers, and 13 per cent for VIP customers. All card holders can opt for a

payment percentage of five per cent, ten per cent, 25 per cent, 50 per cent and 100 per

cent on the card, like the other credit cards offered by the bank. A salary transfer letter

from the employer is needed to be able to apply for the card; alternatively a cash margin

or deposit amount equivalent to the card limit is accepted.

Oman International Bank (OIB)

Pioneer in Oman's credit and debit market, it has a diverse selection of cards in addition

to the regular credit and debit cards that address every financial need of the customer.

Visa Cyber Card (Al Mubashar): An exclusive Internet credit card for the purpose of

online purchases, the card cannot be used at ATMs or point of sale terminals at shops.

Eligibility criteria for the card include a minimum monthly income of RO300, as well as

salary transfer to OIB or a cash margin equal to the credit limit desired. The card which

is offered free in the first year comes with features like revolving credit, interest-free

credit for up to 45 days, comprehensive monthly statement, facility to settle the card's

outstanding balance through OIB's phone banking service and a payable minimum of

five per cent of the outstanding balance, subject to a minimum of RO10. After the first

year, the card will be charged at RO10 annually, and is valid for two years. 

Visa Business Card:

This card, affiliated with Visa International, is specifically designed for business houses

and corporate clients and comes with a unique 'corporate liability waiver'. This cover

provides indemnity against losses due to acts of fraud or dishonesty by the card holder,

committed in connection with the authorised card issued to them. The card is only issued

to companies having a corporate relationship with the bank and has features like

revolving credit, emergency evacuation/repatriation service up to US$1,000,000,

personal accident cover, travel-related insurance benefits and travel inconvenience

insurance services. The amount of RO25 is levied on the card per annum and the card is

valid for two years.

Problem of Plastic Money

"…Credit card debt relief is about working for oneself and not just for the credit card

debt that you have on you. Yes, it's unfortunate but true. In fact, you can hear statements

like "I have got a better job, now I can pack up my credit card debt even faster". So, in

that sense, credit card debt relief is really about getting your life back on the normal

track…"

The most important credit card debt relief comes in the form of de-stressing you.

Everyone knows about the harmful effects of stress; so, if credit card debt relief means

postponing your purchases for later, you should do so.

There are no goods out there that can give you as much joy as credit card debt relief can.

Besides postponing the purchase of your favourite goods, there are few more things that

you need to bring into practice in order to get credit card debt relief. Most of these credit

card debt relief mechanisms advocate restraint spending e.g. preparing a (tight) monthly

budget and sticking to it.

Using cash instead of card for making the payments for your purchases is another advice.

Debt consolidation is another popular way of getting credit card debt relief. You will

find a lot of advice (and you can even hire a consultant) for ways to achieving credit card

debt relief. So, there is no dearth of advice on credit card debt relief or credit card debt

consolidation or credit card debt elimination.

However, what is not so common is the advice on how to act in the post ‘credit card debt

relief' period i.e. after credit card debt elimination. It goes without saying that if you

don't exercise care in the post ‘credit card debt relief' period, you might again fall a prey

to credit card debt.

"…So, if you have been refraining from making purchases, you should not, all of a

sudden, start purchasing all those favorite goods that you had been avoiding. The

recommended guidelines for post ‘credit card debt relief' period are not much different

from the ones for achieving credit card debt relief…" added H. Milla.

Here are the top 5:

1.   Plan your expenses using a monthly budget

2.   Do not buy anything that you don't need

3.   Do not go for  too many credit cards (just one or two should be sufficient)

4.   Always make full payments of your credit card bill and do it before the due date

5.    Never use more than 60-70% of the credit limit available to you.

Advantages of Plastic Money

Plastic Money is a must need of our busy life. Today it is very easy to carry money

without having a lot of cash or gold. Keep Credit or Debit cards and forget the cash

money. This is a new idea of present life-style which has made money transition so easy

that anybody can carry it with him or her in a pocket. Today plastic money is the best

alternative of the cash.

It is also safer to traveling with a plastic money card than cash. If it is stolen you may

contact to bank immediately and can block your money from getting stolen. It gives you

also better option as extra purchasing capacity, protection of money and much more.

Like wise advantage plastic money has disadvantages also. Now we would study of

following advantages as well as disadvantages:

Advantages:

Purchasing Power: Credit or Debit cards made it easier to purchase things. Now

we don’t have any need to carry hard cash in a large amount. Plastic money is

accepted everywhere, anytime.

Time Saving: Through a credit card or debit card you can purchase anything from

anywhere without spend money on fare or cash transition. Just provide your card

details to seller store or companies and finalize your order. Now you don’t have

need to worry about time wastes. Use internet for minimum time consuming.

Extra Safety: While you are not carrying cash, how can it be lost? But if your

card has lost, just contact to your bank or financial institution, which provide you

cards. It will block the account and nobody can draw a single coin without your

permission. So it is 100% safe without any tension.

Credit Limits: You get an extra amount to spend with your card. This extra spent

money you can return before a fix time schedule or you will have to pay a little

interest. So there is no problem to having less money. Just use money without

any tension and.

A need of emergencies: Think, that you have no time to go to bank or someone to

get money, what will you do? Definitely you will use your credit or debit card

which will give you confidence for your difficult time. We can say it a true friend

which help us in need.

Additional features: Mostly credit card offer additional benefits, as discount from

some particular stores, bonus in airline fare, free insurance policies and much

more. This discounts and bonus encourages you to purchase more things as it is

good for us

Now we can see the importance of credit cards and debit cards as plastic money. Plastic

money has made life easier, simpler and fast then before.

Disadvantages Of Plastic Money

Plastic money has become the order of the day. Whether it's a high-end store, a

restaurant, a café outlet or even a grocery shop, people just buy what they like (not just

what they want), proudly taking out their cards and allowing the shopkeeper to swipe

away a fortune of their hard-earned money. You might claim that with plastic money

around, you do not need to carry your cash and there is no fear of being robbed as well.

At the same time, it is easy to use. However, believe it or not, there are a large number of

disadvantages associated with using plastic money. Still, if you use it wisely and

maintain a balance between paper and plastic money, the results can be otherwise. In the

following lines, we have listed the disadvantages of using plastic money.

Cons Of Debit Cards & Credit Cards

 Underlying Evils

Though it may look all trendy and flashy to own plastic money (especially credit cards),

you may be surprised to know, owning it is extremely harmful and risky as well. Credits

cards cost much more than other forms of credit, such as a line of credit or a personal

loan, in case you are unable to pay them on time. The transaction charges added to the

amount is much more than you would have anticipated. Also, continuous late payments

damage your credit rating. 

Too Much Of Credit

One of the most evident and apparent problems with plastic money, mainly credit cards,

is that it gives you unwanted freedom. As a result, you go on a shopping rampage,

without even once bothering about the consequences. Plastic money allows people to

buildup more debts than what they can handle. While you may be in high spirits after the

recent shopping expedition, be wary that cost may be too much to handle.

 Terms & Conditions

Have you heard the phrase 'All that glistens is not gold'? Though debit/credit cards may

have innumerous benefits, most of them usually come with complicated terms and

conditions, which you might not understand or comprehend initially. However, with

time, as you get to know the nuances of these 'dirty' terms and conditions, it might be too

late. 

 Risk Of Loss & Misuse

The danger of losing a debit/credit card is something, which most card owners' fear.

Though you might start thinking of the world as a good place and people living in it as

angels and seraphs, reality is not all that sweet, especially when you have lost or been

robbed of plastic money. It is seen that hefty purchases are made under the name of the

account holder after the card gets lost or stolen and you end up paying for things, which

you have neither bought nor own.

 Limited Options

With so many companies in the market, chances are that the stores that you step in does

not accept card of the particular company you have. Result - you have to either pay a

bulk of cash or just walk out of the shop with no shopping bags (as most of us do not

care to carry cash, because we overtly rely on the credit card).

Less Global Availability

Debit/credit cards also limit global shopping. This is mainly because there are many

companies that do not allow their cards to be used in areas with which they have a

regional conflict. As a result, owning plastic money can be very cumbersome, not to

forget the embarrassment of coming out empty handed, after spending so much of your

time trying the gorgeous outfits.    

It's Plastic After All

In the present world, we have become plastic money fanatics. Most of you would agree

that with debit/credit cards in wallets, we do not mind going out without even a single

note in hand. However, remember its plastic after all and susceptible to damage.  Due to

constant use, magnetic strips of the cards get worn out. As a result, the card might not

get accepted. If during such times, plastic money is your only source of cash, you can be

in a tricky situation.

Plastic money

When we buy things, we pay for them in lots of different ways. We can hand over cash,

write cheques or use a plastic card such as a debit or credit card.

Quick links to:

Cards and Cheques

Chip and PIN

Protecting your identity (Identity theft)

Plastic cards

Plastic cards are now the most popular way to pay for things. They’re easy to Use, and as

well as using them in shops we use them to pay over the phone or on the Internet. We

also use them to get cash out of the bank.

d

There are lots of different sorts of plastic cards…

Cash card. This is the simplest card. You can’t use it in a shop to buy anything.

Instead, it allows you to take money out of a cash machine, and most banks set a

daily limit on what can be withdrawn. See the section on using cash machines on

page 30 for more information.

Debit card. A debit card lets you use money direct from your bank account

without having to take out cash. You hand it over at the checkout and the money

is taken straight out of your account, providing you give them your Personal

Identification Number (PIN). You can usually use your debit card at cash

machines as well, enabling you to take out cash when you need it. Some

machines charge for using their service, but they will warn you before dispensing

the money.

Prepaid cash cards. You can use a prepaid cash card in the same places as a credit

card. The difference is that you don’t get a bill. Instead, you load money onto

your card in much the same way that you load credits onto a prepaid mobile

phone. If you lose your card, as long as you report it, you don’t lose the money

loaded onto it. Rented property often has meters which require this sort of card to

pay for electricity or gas. As there is no credit score required when applying for

one of these cards, it means that young people or those usually rejected by card

companies can now get the same discounts as everyone else by buying online.

They are also widely accepted as a form of payment in the UK now.

Credit card. You use a credit card in the same way that you use a debit card. The

two big differences are that: the money you spend isn’t taken out of your

account; and interest is charged straight away on any cash you withdraw using

your credit card. The credit card company keeps a list of everything you spend

and turns this into a bill, which they usually send at the end of the month or you

can access online. If you don’t pay back all you owe, you get charged interest on

the outstanding amount. That means the amount you owe will get bigger and

bigger. While credit cards are convenient and let us buy things before we actually

have the money to pay for them, it’s easy to get into debt using credit cards.

Store cards. Some shops have their own cards, called store cards. They are like

credit cards but you can only use them at the shop or store group that has issued

them. You’re often asked if you want to apply for one when you’re paying for

something at the checkout. Most store cards have a very high rate of interest,

which can make your bills mount up quickly if you don’t pay back everything

you owe straight away.

Store loyalty cards and store-linked credit cards can be confusing. It is very

important not to confuse store cards with store-linked credit cards. Store-linked

credit cards can be issued by a high street store for use anywhere and operate in

just the same way as any other credit card, but may have the extra attraction of

gaining you loyalty points if you use this type of credit card in a specific store or

store chain. Loyalty cards do not provide you with any form of credit. A loyalty

card allows you to gather points at a specific store or store chain, which can be

spent on goods or services when enough points have been saved.

Cheques

When you or your family opens a bank account, you may get a cheque book and cheque

guarantee card to allow you to pay for things without using cash. You can write out a

cheque to the person or business that you are paying and hand over a cheque guarantee

card. This guarantees that they have enough money in your account to pay for what you

are buying. Cheques are now used less and less as plastic cards become more popular

and a faster and safer means of moving money, and the guarantee cards are being phased

out. Many stores, filling stations and other retail outlets no longer accept cheques.

Ex-offenders who are opening new basic bank accounts will not be offered a cheque

book or cheque guarantee card. Details on how to complete a cheque can be found on

this useful interactive site:

www.moneymatterstome.co.uk/Interactive-workshops/WritingCheque.htm

Chip and PIN

(Personal Identification Number)

These days, plastic cards come with a Personal

Identification Number (PIN). This is a four-digit number

that will be sent to you by your bank, building society or

credit card company. It’s really important to learn this

number rather than carry it about with you or to change it

to a number you will remember. You can do this at a cash

machine. Whatever number you use, you need to make

sure that no one else knows it, because if they do, they can

get hold of your money.

We use a PIN to get cash out of cash machines and for purchases made in places such as

shops and restaurants. You’re asked to put your card into a small machine at the

checkout and punch in your PIN. The ‘Chip’ is a microchip embedded in all cards; it

holds your personal account details. If the card becomes damaged, it will stop working.

The ‘Money Matters to Me’ website has a Chip-and-PIN simulator to help you learn how

to use your cards. You’ll find it at: www.moneymatterstome.co.uk/1-What-money-is-

and-money-exchange/Sub1/ChipAndPin.htm

Cash machines

Cash machines are the machines we use to take money out of our accounts. They are

really called ATMs, which stands for Automated Teller Machines, but most of the time

you hear them called cash machines, cash points or even the ‘hole in the wall’. You find

them set into the wall outside banks and building societies and also in stations, post

offices and supermarkets.

To use a cash machine, you’ll need a plastic card such as a cash card, debit or credit card

and your PIN. Then you just put your card into the slot in the machine and follow the

instructions on the screen. Some companies charge you to use their ATMs. A message

will be displayed on the screen and you have a choice to

carry on with the transaction or withdraw your card.

As well as taking out money, you can often do other things

at cash machines such as pay in money, pay bills and find

out how much money is in your account.

Key points to remember

Don’t stand close to anyone using a cash machine and make sure no one stands

close to you. This is because you need to keep your PIN private.

Be cautious if strangers offer to help you at a cash machine, even if your card is

stuck or you're having difficulties. Don't allow anyone to distract you.

Some cash machines charge you for taking out money while others are free. If

you want your money to go further, stick to the free ones.

If you take cash out using your credit card, you will be charged interest straight

away. With a debit or cash card, as long as you have money in your account, you

won’t be charged interest.

Ask for a receipt when you take out cash so you can remember how much you’re

spending and have a record of it.

Always double-check that you haven’t left your card, cash or receipt in the

machine.

Put your money, card and receipt away immediately without drawing attention to

the fact that you are opening your purse or wallet.

Cash machines sometimes get tampered with by people trying to steal your card

details and money. If the machine looks unusual or suspicious; for instance, if

something has been stuck onto the card slot or key pad, do not use it. If you have

started your transaction cancel it, remove your card and walk away. Do not

remove suspicious devices but do call the police or go into the shop or bank and

let them know what you have found.

To have a go at using a cash machine, visit the ‘Money Matters to Me’ website. It has a

simulator that you can practise with. You’ll find it at:

www.moneymatterstome.co.uk/Interactive-workshops/ATM.htm.

Protecting your identity

Identity theft happens when someone steals your name and personal information to

commit fraud. They might do this by running up credit card debts in your name or using

your information to take out loans. Unfortunately, it is one of the UK’s fastest growing

crimes. It can cause real problems in our financial lives, particularly for people on low

incomes who don’t have money to fall back on.

There are a number of steps you can take to protect yourself.

Take care of your personal details, don’t just give them to anyone.

Rip up or shred personal documents including envelopes that have your name,

address or any personal information on them before you throw them out.

Don’t give out personal details over the phone, by email or to someone who calls

at the front door unless you are absolutely sure you know who you are dealing

with.

NEVER give out your PIN to anyone.

Your bank or building society won’t send you emails asking for personal

information, especially your PIN, so if you receive any, they will be false – delete

them.

Take special care online.

If you bank, book tickets or shop over the Internet, do not use the same

passwords for all your accounts or store details on a computer.

When shopping online look for the padlock icon and https:// (in the web page

addresses) – this means the site is secure. THE LOCK ICON IS NOT JUST A

PICTURE! Click (or double-click) on it to see details of the site’s security. This

is important to know because some fraudulent websites are built with a bar at the

bottom of the web page to imitate the lock icon of your browser. Therefore, it is

necessary to test the functionality built into this lock icon.

Home computers

Ensure your home computer is protected before you go online by buying a good anti-

virus, firewall and anti-spam software package and keep it up to date.

Chip and PIN

Shield your number from those people who are nearby, using your hand or body; don’t

use the same PIN for all your cards; and destroy old plastic cards when you receive new

ones.

Check your statements

Bank and credit card statements need careful and regular checking to pick out any

unexpected purchases or withdrawals. Query any strange transactions straight away and

also report these to the police. The bank won’t do this on your behalf, but they will look

into where the money has gone and replace it if fraudulent practice is proved.

Moving house or flat

You are more at risk when you move home so redirect all your mail to your new or a

safe address and inform your bank, utility companies and other organisations of your

new address.

Where is your post delivered?

If you use a central or communal postal-delivery point, such as in a block of flats, make

sure you have a lockable post box and collect your post as soon as possible.

If your mail regularly fails to arrive, report this to Royal Mail, or if a new plastic card is

expected and is not received within a reasonable time contact the issuing company.

Report it

If you are a victim of fraud, report it to the police straight away. They will give you an

incident number. Report a missing or stolen card to your credit card company straight

away.

Check your credit rating

Our section on your credit history explains how to do this.

Managing money

The money coming into your household can come from different places – work or

benefits, or a combination of the two. If you have reached retirement age, the

Government may pay you a pension. This is to cover the basic cost of living if you have

made sufficient National Insurance contributions during your working life. If you would

like to learn more about your State Pension, including a forecast of what you might

expect, you may find this website helpful:

www.direct.gov.uk/en/Pensionsandretirementplanning/index.htm or telephone 0845 7 31

32 33 and ask for a leaflet to be sent to you.

(State Pension age is the earliest age at which you can claim your State Pension. From

2010 the State Pension age for women will increase gradually to 65 to bring it into line

with the State Pension age for men. This reflects women’s changed role in the workplace

in recent years and the fact that people are living longer on average.)

Quick links to:

Where your money goes

How to look after your money

John keeps track of his money - example explained

Keeping track

This is what John’s ‘Keeping Track of Your Money Pad’ looks like

Where your money goes

Almost everybody wonders where their money ends up going and it’s easy to see why,

because it gets used for a lot of different things.

Housing and household expenses

As adults, we usually spend money on keeping a roof over our heads. We may be buying

our own home, which usually means we pay some money every month towards the cost

of this purchase (a mortgage). Otherwise we rent. This means that the home we live in

doesn’t belong to us but we pay money (rent) to the owner so that we can live there (this

may be the council, a housing association or private landlord).

Living expenses

Our money also goes on things like buying

food and clothes and paying for telephone

and television bills. We also need it to travel

about, whether that means buying bus or train

tickets or running a car. And of course we all

like having a bit of money to spend on having

fun.

Savings

If you do not have much money left at the end

of the month, then you may want to start to

save some on a regular basis. By doing this, you’ll build up a pot of money that you can

spend on something special or just put by for a rainy day.

Ways to boost your household budget

Wherever and however you live, running a home is expensive. Here are some general

tips that can help you reduce the costs and keep control of your budget.

Claim all the benefits and tax allowances that you are entitled to. Your local

Jobcentre Plus can help with this. There is also an online ‘benefits adviser’

service which can answer your questions anonymously about your savings,

income and outgoings, to get benefit advice, for you/your family or for someone

else. You can access this from:

www.direct.gov.uk/en/Diol1/DoItOnline/DoItOnlineByCategory/DG_172666

Shop around for services such as gas, electricity and telephones. The companies

providing these services compete with each other to give good deals to

customers, so you may find you can save money by ‘switching’. Your local

library should have Internet access (this may be free) and there is a growing

number of websites that can help make it easy for you to check if you are paying

too much for your services and ensure you get the best deal on most of your

purchases.

You can also cut bills by switching to low-energy light bulbs and by turning off

appliances such as TVs and DVD players rather than leaving them on standby.

Also, unplug mobile phone and other chargers from the power supply. If you

leave the charger plugged into the socket but not connected to the phone etc, it

will still consume some energy; consequently, energy is being wasted which soon

mounts up.

You can’t switch water providers, but you may want to consider having a water

meter installed to help reduce your bills. However, the saving will depend on the

amount of water you use. Check with your local water company to see if this is a

good decision for you. They should install a meter for free, allowing customers to

switch back to the unmetered charge any time within 12 months of installation of

the meter if they are unhappy with the change. If a meter cannot be fitted,

companies may offer an alternative unmeasured tariff which may be lower than

your tariff charge.

Before you go food shopping, make a shopping list and stick to it. If you do see

special offers or buy-one-get-one-free deals, make sure you don’t buy more than

you need and end up wasting food. It’s also a good idea to look out for cheaper

brands, such as a supermarket’s own brand, which can help you save money.

Remember that ready-made meals and takeaways are usually more expensive

than cooking from scratch.

Try to give up smoking! 20-a-day costs £2,000 a year.

Self-employment can bring in extra cash and be rewarding, but seek advice first

to ensure you know what you should do about Income Tax and National

Insurance. Working for yourself might also affect your entitlement to benefits.

Let’s Talk About Self-employment is a useful resource:

www.letstalkaboutselfemployment.org.uk

Tax

If you’re earning wages, you have to pay Income

Tax, which means some of the money you earn

goes straight to the Government. It is usually

taken out of your wages before you receive them.

There are also other taxes that we have to pay,

such as council tax, which is a local tax that helps

pay for things like our schools, rubbish collection and police service. Most of us have to

pay some sort of tax. It’s an offence not to pay what we owe so it’s a good idea to take

some time to find out more about taxes.

TaxAid is a charity which provides free tax advice to people who cannot afford to pay a

professional adviser. The service is independent and confidential. For advice or an

appointment visit www.taxaid.org.uk. The helpline is open 10am and 12 midday,

Mondays to Thursdays. Telephone: 0845 120 3779

How to look after your money

Most of us have heard stories about people stashing their money under the floorboards or

in their mattresses but there are usually better and safer places to keep money.

Bank and building society accounts

The most common way to manage your money is to put it in a bank or building society.

They’ll open an account for you to keep your money in and you’ll be able to get your

wages or benefits paid straight into the account as well. When you need to spend your

money, you can get it out of the bank as cash or organise for the bank to pay bills by

direct debit for you, which may mean you pay less for some things like gas and

electricity. This is a growing practice, so do ask when dealing with new service

companies.

Basic bank or building society accounts

There are lots of different sorts of accounts, and it can be very confusing working out

which sort is right for you. Banks and building societies have rules about what sort of

account they will let you open.

Basic accounts are a good starting point (you may be able to open a basic bank account

whilst you are in prison). These are designed for people who have problems opening

other accounts. This can happen because of a bad record of repaying loans or just

because of a low income.

With a basic account, you get a cash card to withdraw money, but you can only take out

as much money as you have in your account.

(Banks are starting to replace Electron, Maestro and Solo cards with a Visa Debit card,

which you will receive when your account is open, and which should enable you to

spend your money in shops. Some shops do not take Electron or Solo cards; however,

you can use the card for telephone purchases or on the Internet without having to take

out cash.)

You can only spend as much money as you have so you won’t end up with debts. You’ll

also be able to set up direct debits and standing orders, which let you pay things like bills

straight from your account.

As an ex-offender, you can contact any bank or building society. Banks are required by

law to make sure that you are who you say you are so you’ll need to take along some sort

of personal identification. This can be:

with a photograph – such as a valid passport or new style driving licence; or

without a photograph – such as a valid old-style driving licence – plus another

document like a benefit book.

You’ll also need to take along proof of where you live. Most banks accept:

a utility bill in your name such as gas, electricity or water that is less than three

months old; or

a letter from your landlord or probation office confirming your address.

You will need to go in person to the bank or building society with your identification and

fill out the forms needed to open the account. You should be able to do this in a private

office and get help from a member of staff if you need it. You may have to wait for a day

or two for the bank to make a decision and they will write to you either with your new

account details or a reason why they will not open an account for you.

Letter of Authority

If you already have a bank account and are going away for a while, it’s a good idea to

get someone close to you to sign what’s called a Letter of Authority. This means that

they can get access to your account, perhaps to withdraw money you have left for them

or to look after your account so things like new plastic cards (debit and credit cards) and

statements don’t get sent to your old address. Ask your bank or building society for

advice on this.

Moneymadeclear offers impartial and easy-to-read information and tools, which can help

you work out what’s right for you about a wide range of money-related matters and

products, including basic bank accounts, interest and credit cards. You can speak to an

adviser Monday to Friday – 8am to 8pm (excluding Bank Holidays); Saturday 10am to

6pm – 0300 500 5000 (standard call charges); or if you have access to the Internet, visit

www.moneymadeclear.fsa.gov.uk

John keeps track of his money - example explained

In the example below, the money coming in on the 30th

is £110 from John’s job, but on the same day he had to

buy a bus pass, which cost £25. This amount has to be

deducted from the £110, leaving £85 to spend.

John spent £50 on food and necessities at the local

supermarket, which needs to be taken away from the

£85, leaving him with £35. His mobile phone needed a

‘top-up’ so he spent £10 on this, leaving him with £25,

which he doesn’t spend that week.

John again earns £110 the next week, which he adds to

the £25 left from last week, which makes £135. John

knows that his electricity bill needs paying and also his phone will need topping up

again, and of course he needs to eat so he takes these amounts off what he has to spend.

Straight away John can begin to see where his money is going. He knows what he can

afford and because he has made a list of all his outgoings and when they are due he can

plan to have money to cover this to avoid debt. If he can save a little each week, he will

have a small nest-egg for emergencies or special occasions.

So, week by week he keeps track of money coming in and money going out using this

pad.

Keeping track of your money

It often feels as if our money just vanishes so it’s a good idea to learn to keep track of it.

The best way to start to do this is to work out how much money we have coming in. This

tells us how much we have to spend, which is often called our budget. With a budget, the

idea is that you don’t spend more money than you have, so if you have £110 coming in

each week, this is the most you can spend in a week.

Have a go at working out your budget by printing and then filling in the ‘Keeping Track

of Your Money (PDF)’ pad. Make a list of your ‘outgoings’ and add up the total cost. If

the total of your ‘outgoings’ is more than your income, you will need to think about how

you can reduce your ‘outgoings’ or increase your ‘income’. Look at the section on

‘Ways to boost your household budget’ for some more help.

Your ‘outgoings’

Outgoings might include:

Council Tax

Food

Rent or mortgage

Electricity and/or gas

Work costs (travel/lunches)

Water rates

Telephone

Clothing

Transport

Insurance

Going out/leisure

If you have any other expenses such as maintenance payments or loans, remember to

include these as well.

Benefits

Are you claiming all the benefits you are entitled to?

Are you claiming all the benefits you are entitled to? And what about any grants?

For offenders, the discharge Form B79 can help you prove your identity and therefore

claim benefits quickly.

Any grant or benefit will depend on whether you are on:

remand;

supervised attendance orders;

community disposal; and

home detention curfew (electronically tagged).

Some general tips for you as an offender and your family or career

You must let the relevant benefit authorities know the date when you are

sentenced, then again the date you are released.

If you are under 17 you should contact the Connexions or Careers Service when

you are released.

If you are released without being sentenced to imprisonment or detention you

should receive any arrears of non-means-test benefits to which you are entitled.

Ensure you have been credited with any National Insurance (NI) contributions to

which you are entitled.

If you are released following the quashing of a conviction you are entitled to

National Insurance credits for the period you were wrongly imprisoned.

In some cases your family can claim a benefit which is not available to you. They

are not able to claim for the offender as part of the family either.

Please note, as an offender you may be subject to benefit sanctions if you have been

convicted of two benefit offences in three years. The information in the following table

was right at the time of printing but is subject to change.

  What is it? How do I apply? Any other information?

Jobseeker’s

Allowance

(JSA)

A benefit for people

aged 18 and over if

they are not in paid

work or are working

less than 16 hours a

week and looking

for work.

Telephone 0800 055

6688 to make a

claim.

If there is a

Jobcentre Plus

adviser in your

prison try to arrange

an interview with

them before your

release.

There are two types of

Jobseekers Allowance –

contribution based and

income

based.

Income

Support

(IS)

A benefit for people

who can’t claim

Jobseekers

Allowance (JSA)

because they are not

able to look for

work. This could be

if you are a lone

parent responsible

for a child under 12

By telephone to

Jobcentre Plus.

0800 055 6688.

A person on remand, parole

or sentenced does need to

check if they COUNT. A

prisoner is not a member of

the family for IS purposes. If

you are a prisoner, your

partner can claim benefit as a

single person or lone parent.

If your partner or child is a

prisoner, you can no longer

years of age, or a

carer.

If you COUNT as a

prisoner you are not

entitled to IS apart

from housing costs

which are payable

for up to 52 weeks

whilst you are on

remand, awaiting

trial or

sentenced.

claim IS for him/her. As IS is

generally paid in arrears you

may need to apply for an

interim payment or Social

Fund Crisis Loan to meet

your initial expenses.

Housing

Benefit

(HB)

If you are serving a

custodial sentence

you are entitled to

HB for up to 13

weeks as long as

your absence from

home is unlikely to

exceed 13 weeks. If

you are serving a

sentence of more

than 13 weeks you

may still be entitled

to HB if you are

expected to be

released within 123

weeks. This may

also include being

released early under

home detention

curfew (electronic

tagging).

  If you are no longer entitled

to IS or income-based JSA

you will need to make a new

claim for HB.

If you are no longer entitled

to HB your partner or other

person occupying your home

may be able to claim benefit

as a liable person. A prisoner

continues to count as a

member of the claimant’s

family as long as s/he is

unlikely to be away for

substantially longer than 52

weeks. Nondependent

deductions are not made in

respect of a non-dependant

who is a prisoner.

You are treated as

serving a custodial

sentence during

periods of temporary

release (unless you

are released under an

intermittent custody

order). These

periods

therefore count

towards the 13

weeks for which HB

is payable. Also you

can continue to

receive HB for up to

four weeks if you

still have to pay rent

and you could not

reasonably have

avoided doing so.

Discharge

Grant

If you have been in

prison for 15 days or

more you will get a

discharge grant on

release.

Your prison should

give you a form

about two weeks

before release to

sign to get the grant.

If you need to pay housing

costs in advance, an extra £50

may be available – it will be

sent direct to the landlord

(speak to your personal

officer or a member of the

resettlement team). This

counts as capital for

IS/income-based JSA

purposes, i.e. it is not in

addition to IS/JSA

Community

Care Grant

A grant for items

like

You can apply to

Jobcentre Plus up to

You are not automatically

entitled to this and if there

(CCG) furniture, household

equipment and

clothing (but not

clothes for

interviews or work).

If you are released

on temporary licence

somebody caring for

you can claim CCG

for living expenses.

6 weeks before your

release date, as long

as you will be

claiming IS or

income-based JSA

on release.

isn’t enough money you will

be turned down (first come,

first served). You can apply

for CCG if you are or expect

to be in receipt of IS or

income-based JSA.

Crisis

Loan

You may be able to

get this if your

Discharge Grant has

run out and you are

waiting for benefits.

Claims will

generally be

taken over the

telephone; contact

your local Jobcentre

for the telephone

number for your

area.

You will need to pay this

back. It is again dependent on

the funds available at the time

of your application. The

maximum value of a crisis

loan award is £1,500.

Child Tax

Credit

A means-tested tax

credit to support

families with

children.

HM Revenue &

Customs deals with

this. It is paid on top

of child benefit. You

call the Tax Credit

Helpline on 0845

300 3900 to get a

claim form and to

get further

information. You

claim Child Tax

Credit and Working

Tax Credit on the

same claim form.

The amount paid depends on

the number of children you

have and your household

income. You can claim

whether or not you are in

work. There are extra

amounts for children who

have a disability.

Working A means-tested tax HM Revenue & The amount paid depends on

Tax

Credit

credit for working

adults on low

incomes, including

those who do not

have children.

Customs deals with

this. It is paid on top

of child benefit. You

call the Tax Credit

Helpline on 0845

300 3900 to get a

claim form and to

get further

information. You

claim Working Tax

Credit and Working

Tax Credit on the

same claim form.

the number of children you

have and your household

income. You can claim

whether or not you are in

work. There are extra

amounts for children who

have a disability.

Pension

Credit

Pension credit is for

people aged 60* and

over who are living

in Great Britain. It

could top up your

weekly income to a

uaranteed minimum

level. If you are 65

and over and have

saved towards your

retirement you could

receive extra money

too.

If you are a prisoner

you are NOT

entitled to the

guarantee credit or

the savings credit. If

you are on remand

You can apply over

the phone by calling

0800 991 234. You

will need to give

them your National

Insurance number.

You are no longer treated as a

member of a couple if you or

your partner is in prison.

awaiting trial or

sentence, you are

entitled to housing

costs for up to 52

weeks and you may

be entitled to arrears

of the severe

disability addition if

you do not receive a

sentence of

imprisonment and

you are awarded

arrears of attendance

allowance or

disability living

allowance.

*The age you can

get Pension Credit

will rise from 60 to

65 by 2020. It’s

linked to the changes

to women’s State

Pension age.

Saving money

Saving money on a low income is difficult, but even

by saving the odd 50 pence your savings can soon

mount up. You can save money in an old jam jar if

you like, but it’s a good idea to think about the

benefits of saving in a more formal way. Your money will be safer and you won’t be so

tempted to ‘borrow’ it. The amount you have should also grow because the bank or

building society will give you interest. That means

they’ll give you a bit of extra money as a reward for saving with them. See our section

on Understanding interest rates on page 26 for more on this.

You can open a savings account at a building society, bank or through the Post Office.

Or you could choose to save with a credit union.

Credit unions

Credit unions are great for people on low incomes. They are financial organisations run

in the community by the community. They offer a place to save your money as well as

providing low-cost loans.

You have to become a member of a credit union. Each one tends to have conditions of

membership; for example you have to live or work in a particular area. Once you’re a

member, you save your money with the credit union and, in return, you get what is

known as a dividend. This is an extra sum of money, like interest, that is usually paid to

you once a year, so it will help your savings grow. The paying of a dividend is not

guaranteed and is dependent on the year’s profits for the individual union.

Many credit unions now offer a range of services, including a current account, benefits

direct and money advice.

For more information on credit unions, you can contact the Association of British Credit

Unions.

www.abcul.org

Telephone: 0161 832 3694

Planning for the unexpected

Even if we’re really good at sticking to a budget, life has a way of throwing up things

that we weren’t expecting. For example something might need to be replaced or repaired.

We may have to spend extra money because of an emergency. Any of these can cause

problems for your budget. That is why it makes sense to try to save up a bit of money

rather than spend everything we have. It’s also important to think about the extra money

we usually end up spending at times like Christmas, birthdays and holidays.

What happens when you lose control of your spending?

If you spend more money than you have, you end up getting into debt. This means that

you owe someone else the money you’ve spent. It may be a friend you’ve borrowed

money from or perhaps a catalogue company or your bank. You can also run up debts by

not paying for the things you’re supposed to, for example your tax or rent.

Unfortunately, if you get into debt and don’t pay back what you owe, your debt tends to

get bigger, even if you stop adding to it. This happens in lots of different ways. You may

get a fine for not paying for something on time and this will be added to the original

amount you owe. You’ll also probably be charged interest on the money you owe. This

means that whoever has lent you money will charge you some extra money for

borrowing it. The longer you go without paying it back, the more interest they’ll add to

the original amount you borrowed.

Interest rates

When we’re talking about money, the word ‘interest’ usually crops up in two different

places. You hear people talking about the amount of interest they have earned on savings

and also how their debts are growing because of interest.

But what exactly is interest?

Well, a good way to understand it is like this. The money in a bank or building society

doesn’t just sit there. What you and other customers are doing is actually lending your

money to the bank or building society to fund their activities. In return for this, they pay

you an extra bit of money, which we call interest. How much interest you earn depends

on where you put your money and how long you save it for.

At the other end of the scale, if you borrow money, whoever you’re borrowing it from

usually charges you interest in exchange for lending you the money. They tend to do this

because they want to make a profit on their money and because there’s always some risk

involved in lending people money. Out of the people you know, think about who you’d

trust to pay you back if you lent them some money. Some would be sure to pay you back

promptly while others would vanish forever, taking your money with them. Companies

lending money face the same situation. You’ll find that if you haven’t paid back money

in the past, you’re likely either to be turned down when you ask to borrow money or

charged a lot of interest. Not understanding about interest and how it piles up is one of

the easiest ways to get into debt. Unfortunately, working out how interest is charged is

complicated.

When we talk about how much interest we’re being charged, we usually talk about it as a

percentage of the amount we’ve borrowed. For example, we may say we’ve borrowed

£1,000 at an interest rate of 10%. This means as well as paying back the original £1,000,

we need to pay back another 10% on top of that, which works out as £100.

Unfortunately, working out how much interest you’ll be paying isn’t as easy as this

because of something called compound interest.

Compound interest

Compound Interest means that as well as paying back interest on the original amount

you borrowed, you also have to pay interest on the interest that has already built up. This

means that the longer you have your debts the more they grow.

APR (Annual Percentage Rate)

If you’re borrowing money, you’ll come across the letters APR. This stands for Annual

Percentage Rate. Anyone officially lending you money has to tell you what their APR is.

They work this out by adding together the interest you’ll be charged over a year plus any

extra costs such as arrangement fees. The idea behind APRs is that they make it easier

for you to compare the cost of borrowing. For example, one company might have an

APR of 5% while another has one of 10%. (The lower the APR, the better.)

AER (Annual Equivalent Rate)

If you’re saving money, the letters you’ll come across are AER. This stands for Annual

Equivalent Rate. This shows how much interest you’d get if you put some money into an

account and left it there for a year. Again, using AERs, you can work out which bank or

building society will help your savings grow fastest. (The higher the AER, the better.)

The ‘Money Matters to Me’ website has a couple of calculators that can help you

understand interest when talking about something you want to buy or save.

Credit history

If you want to open a bank account, take out a credit card or borrow money in general,

the company you borrow from will want to know a bit about you so they can decide if

they should lend to you or not. To make this decision, they look at your credit history.

This is made up of information about money you have borrowed and how you have paid

accounts in the past. It usually includes information from the past six years and is held

by companies called credit reference agencies. The agencies get this information from a

number of places, including:

public records such as the electoral roll or listings of bankruptcies and court

judgements

financial information supplied by banks, credit card companies and so on.

Looking at your own credit reference file

Your credit reference file is made up of

important information about you and, by law, a

company has to ask your permission to look at

it. They usually do this on the application form

when you are applying for a card, account or

loan. You are also allowed to see your file. To

do this, you need to write to the credit reference

agencies asking for what is known as your

‘statutory credit report’.

Some agencies charge about £2.00 for this service.

You can have your own credit report sent to you direct. There are a number of

companies who offer a free service and some offer a service that offenders can access

whilst serving their sentence – speak to the Citizens Advice advisers, personal or

probation officers about this.

There are simple forms which will require some personal information about yourself,

including previous addresses.

Why would I want to see my file?

There are a number of reasons why people ask to see their files.

If you are thinking of applying for something like a loan or credit card, it can be

helpful to know what your file says about you.

If you have applied for some sort of credit and been turned down, your credit

reference file will help you understand why.

By knowing what your file says about you, you can start to take any necessary

steps to repair your financial record, for example, by paying back debts. This is a

useful review process for all adults, but it would give you the offender the

opportunity of getting your financial ‘store’ in order before release, as debts don’t

disappear while you are in prison.

Information held by credit reference agencies can sometimes be wrong. By

looking at your file, you can make sure that companies are basing their decisions

on the right information.

Use of plastic money on rise - July 24th, 2007

There are about 22 million credit cards in India (as on January 2007). And the total value

of such transactions almost doubled between 2003-04 and 2005-06, to around Rs 33,900

crore.

The latest available data, which covers the first 10 months of 2006-07, indicates

continued robust growth, in the number of credit cards increasing at 28% year-on-year.

Over the same period, the value of credit card transactions grew by 20%.

But, the number of credit cards in India - 22 million - is tiny for a country with a

population exceeding 1.1 billion.

Since many people have multiple cards, the number of cardholders is much smaller than

the number of cards in circulation.

Credit card issuers in India have plenty of room to expand their customer bases

aggressively over the next few years.

Best Ways To Use Plastic Money For Your

Holiday Shopping

In the holiday season when shopping is your main activity, you’d most probably want to

use plastic money rather than cash to purchase goods. But using plastic money to your

best advantage is an art. It all depends on how you play your cards …oops how you use

your cards, I mean! If you know how to cleverly use your credit cards and store cards to

your best advantage, you’ll be able to save up a lot of your hard earned money. But if

you are unwise in using these cards, you’ll only end up in huge debt. Here are some

ways in which you can carry out your holiday shopping to your advantage using plastic

money.

People with different kinds of financial and credit card profiles go for shopping. You

have to assess your type and find out what you should do to enhance your profile.

Generally people make the mistake of following the advice of friends and relatives on

credit card usage without considering their own unique situation. As a result they flunk

in their endeavors and blame the formulators of the strategies for coming up with

ineffective solutions. But the fault lies with our implication and not with the strategies.

Maintaining a Good Credit Score

If you are trying to keep up a good credit score, one way to achieve it is to not use

multiple cards for making your purchases even though you possess them. Use only the

card with the maximum credit limit for making your purchases. Using multiple cards

involves multiple credit enquiries which will lower your score temporarily. Also make

sure that you make timely payments of your money because otherwise you’ll be

spending a lot of money on the high interest rates levied upon you for late payments.

Paying Off Debt in the Shortest Time

If you want to clear off your credit card debt in the shortest period of time select a card

with the lowest APR and credit availability. Clearing off your debt in a short time will

help you in maintaining a good credit score. If your holiday expenditure adds up to the

already existing credit debt, your score might suffer a dip if you don’t make timely

payments. This will increase your interest rates very rapidly.

Use debit cards if your credit cards are already used to their highest potential. Keep an

eye on your balance account so that you do not land up with overdraft penalties. Make

signed purchases so that your credit card company, such as Mastercard or Visa, gives

you benefits on such purchases.

Maximizing the Rewards Facility of Credit Cards

If you are type of person who wants to leverage the best of reward benefits offered on

your credit card you can make your holiday purchases using the reward card only.

Reward cards are best suited to people who do not intend to debt huge amounts on their

credit cards and also those who punctually make credit card payments without delay

each month.

You can also avail the discount and holiday perks offered by many credit card

companies.

These are some of the ways in which you can maximize the perks offered by the credit

cards to your best advantage.

Do you know about the different types of plastic money available in the market today?

Be it credit cards, debit cards, add-on cards, charge cards, co-branded cards, affinity

cards or Diners Club cards. More and more Indians are using them as a convenient mode

of payment.

Here is an FAQ on the most popular plastic cards used in India [ Images ].

What is a credit card? 

A credit card is plastic money that is used to pay for products and services at over 20

million locations around the world. All you need to do is produce the card and sign a

charge slip to pay for your purchases. The institution which issues the card makes the

payment to the outlet on your behalf; you will pay this 'loan' back to the institution at a

later date.

What is a debit card? 

Debit cards are substitutes for cash or check payments, much the same way that credit

cards are. However, banks only issue them to you if you hold an account with them.

When a debit card is used to make a payment, the total amount charged is instantly

reduced from your bank balance.

Don't borrow on your credit card! Here's why 

A debit card is only accepted at outlets with electronic swipe-machines that can check

and deduct amounts from your bank balance online.

What is a charge card? 

A charge card carries all the features of credit cards. However, after using a charge card

you will have to pay off the entire amount billed, by the due date. If you fail to do so,

you are likely to be considered a defaulter and will usually have to pay up a steep late

payment charge.

When you use a credit card you are not declared a defaulter even if you miss your due

date. A 2.95 per cent late payment fees (this differs from one bank to another) is levied

in your next billing statement.

What is an Amex card? 

Amex stands for American Express and is one of the well-known charge cards. This card

has its own merchant establishment tie-ups and does not depend on the network of

MasterCard or Visa.

Credit cards: Remember these dos and don'ts 

This card is typically meant for high-income group categories and companies and may

not be acceptable at many outlets. There are a wide variety of special privileges offered

to Amex cardholders.

What are MasterCard and Visa?

MasterCard and Visa are global non-profit organisations dedicated to promote the

growth of the card business across the world. They have built a vast network of merchant

establishments so that customers world-wide may use their respective credit cards to

make various purchases.

What is a smart card?

A smart card contains an electronic chip which is used to store cash. This is most useful

when you have to pay for small purchases, for example bus fares and coffee. No

identification, signature or payment authorisation is required for using this card. 

The exact amount of purchase is deducted from the smart card during payment and is

collected by smart card reading machines. No change is given. Currently this product is

available only in very developed countries like the United States and is being used only

sporadically in India.

What is the Diners Club card? 

Diners Club is a branded charge card. There are a wide variety of special privileges

offered to the Diners Club cardholder. For instance, as a cardholder you can set your

own spending limit. Besides, the card has its own merchant establishment tie-ups and

does not depend on the network of MasterCard or Visa.

However, since this card is typically meant for high-income group categories, it may not

be acceptable at many outlets. It would be a good idea to check whether a member

establishment does accept the card or not in advance.

What is a photo card?

If your photograph is imprinted on a card, then you have what is known as a photo card.

Doing this helps identify the user of the credit card and is therefore considered safer.

Besides, in many cases, your photo card can function as your identity card as well.

What is a global card?

Global cards allow you the flexibility and convenience of using a credit card rather than

cash or travellers checks while travelling abroad for either business or personal reasons.

What is a co-branded card?

Co-branded cards are credit cards issued by card companies that have tied up with a

popular brand for the purpose of offering certain exclusive benefits to the consumer.

A debit card with a difference

For example, the Citi-Times card gives you all the benefits of a Citibank credit card

along with a special discount on Times Music cassettes, free entry to Times Music

events, etc.

What is an affinity card?

The card issuer ties up with popular organisations/ institutions which are often non-profit

organisations (Citi-WWF card or the Stanchart-Cricket cards) to offer an affinity card.

When the card is used, a certain percentage is contributed to the organisation /institution

by the card issuer.

What is an add-on card?

An add-on card allows you to apply for an additional credit card within the overall credit

limit. You can apply for this card in the name of family members like your father/

mother/ spouse/ brother/ sister/ all children above 18 years of age. Your billing statement

would reflect the details of purchases made using the add-on card. You are liable to

make good all the payments for the purchases made using the add-on card(s).

How many add-on cards can a customer get? 

Normally an issuing bank permits two add-on cards per credit card.

Is it possible to control the spending limit on add-on cards?

Yes. Some credit card issuing companies do set a limit for each transaction, as well as

for the total value of transactions allowed on a particular add-on card every month.

WHY HAVE PLASTIC MONEY

GET THE BEST DEAL FROM YOUR CREDIT CARD

“Charge it!” has become like a fashion statement and it is commonly heard in various

service establishments like malls, multiplexes and hyper markets. People buying food or

shopping for clothes using their credit cards has now become a trend. A credit card is

supposed to be used for necessities and not as a luxury.

• Before marching down to a credit card agent, ask yourself some questions like do you

want to pay for the credit every month or carry a balance instead? The type of credit

limit should also be taken into consideration. Some credit cards offer a lot of benefit

packages, think of the package that would suit your needs.

• If you want to carry on a balance, look for the credit card that offers the best interest

rate or the annual fee offer. However, if you prefer to pay for the credit every month,

then look on the one that offers the lowest interest rate.

• Credit limit determines how far you can go with your card. Think of the lowest limit

that would fit your needs, not your lifestyle.

• Credit card companies offer tremendous bonuses on their cards. Before you sign up for

these packages, think wisely! Will they really benefit you or are they just there to make

your credit life miserable?

• Always choose the credit card that offers the lowest annual percentage rate (APR).

APR's could either be a ‘fixed’ or a ‘variable’ rate. This is to be taken into consideration

if you're deciding on carrying a balance.

• Some credit cards offer a grace period of 25 days before they charge the interest on the

purchase. But some of them may not. Look for those that have one. The longer the grace

period, the better the deal.

• You also have to check on other fees attached to the credit card. These are the penalty

rates as well as other charges like over the limit charges and late payment charges.

When choosing a card, always remember to get the one that would best fit your needs

and at the same time the best deal you could get out of it on a long term basis. You are

only to get one so don't rush into one that looks good. You always have the liberty of

comparing one credit card to another.

THE NEED FOR CREDIT

All credit card users must be familiar with the jargon associated with a credit card like

limit, debt, secure, and unsecure. For people to whom a credit card is a new way of life,

let us find out the basics of a credit card.

It is always a good idea to do a proper study before one goes in for a new credit card.

With the kind of offers and promotions offered by the banks of today, it has certainly

become a task for one to choose the card that would suit him just right.

An unsecured credit card refuses to a free and clear credit card that does not require a

deposit and is definitely not a prepaid card. An unsecure credit card also implies that one

has a fine credit statement, as one need not pay in advance for the use of such card.

Though the credit limit offered initially would be lower, it would gradually increase as

per the use of one's card.

A difficulty in securing an unsecure credit card is past credit fiascos. One can recover his

credit by making regular payments and purchases on a secured card.

A credit card application is the way with which one can have plastic money in hand. By

providing one's credit history, work history, and banking information, one allows the

givers to dig into his credit record. Once an approval is made and the credit limit is set,

the card is all ready to be swiped.

As we wind up this article, let us also keep in mind that using a card has a tagline called

responsibility. Credit cards have caused people to overspend; yet with proper

management, it could turn out to be your best money lender.

ORIGINS OF THE CREDIT CARD

The origin of the credit card can be traced back to 1914, when American company

Western Union began issuing metal plates to customers who would buy on credit. The

transactions would be recorded on these plates.

However, the credit card as we know it took another 40-odd years to evolve. An

American gentleman, Frank McNamara was acutely embarrassed in a New York

restaurant, when he realised that he had forgotten to carry his wallet. When he finally got

out of the restaurant --- after plenty of apologising --- McNamara was suddenly struck by

the idea of replacing cash with a more convenient alternative. And that’s how “The

Diners Club” card was born. So now you know who to thank --- or blame!

ADVANTAGES OF A CREDIT CARD

Tosum it in a line, a credit card provides you with convenience, safety, more purchasing

power and a host of fringe benefits. What’s more, credit cards to day have assumed

different avatars. You have Add-on cards (for a family member), ATMcards (to

withdraw instant money), co-branded cards, petrol cards (Citibank+IndianOil, for

instance in India) debit cards, smart cards ---- the innovations are end less. You get more

too. Most cards offer privileges like free insurance, discount coupons and invitations to

exclusive events. Yes, for many the creditcard  is become a vital necessity. If you

haven’t got one yet, go for it by all means. But read more in this section on how not to

misuse your credit card andget into financial trouble.

INSURANCE ALONG WITH YOUR CARD

Most cards today offer personal accident insurance cover as a value-added service once

you subscribe. Of course the value and scope of the insurance is different for each card.

A few cards (in India) offer up to Rs 10 lakh of insurance, and what’s more they cover

your spouse too. So before going inform your card, you’d do well to check out what each

card company is offering in terms of insurance. Remember too that the card company is

offering the insurance in a tie up with an insurance company. That means the

responsibility of honouring the commitment made is not with the card company but with

the insurance firm. So check whether the card company has tied up with a reputed

insurance firm.

It’s not only accident insurance that’s on offer. Some credit card firms also provide

medical and household insurance too.

Why We Use Plastic Money

These days our credit cards allow us to buy whatever we want whenever we want. This

is such a change from some years ago when we had to first check whether cards were accepted.

Everything seems to have undergone a sea change.

Today everybody from retailers to lenders to aircraft carriers accept credit cards.

Attitudes to the credit card have also changed a great deal. Whereas people at one time tended

to not use the card. That is no longer the case . The people of today prefer to ss

These days, our credit cards allow us to buy whatever we want, whenever we want. This

is such a change from some years ago when we had to first check whether cards were

accepted. Everything seems to have undergone a sea change.

Today, everybody, from retailers to lenders to aircraft carriers, accept credit cards.

Attitudes to the credit card have also changed a great deal. Whereas people at one time

tended to not use the card, that is no longer the case. The people of today prefer to whip

out there cards as soon as bill paying time arrives. A swipe and a sign is all it takes, and

one can walk home with the bill and the stuff to go with it.

Credit cards are so much easier to carry than cash that it is quite typical that the former is

taking over as the most preferred mode of payment. A credit card occupies very

negligible space in our wallets, and yet, it can purchase so much for us. Paying by credit

card is also a good way of keeping tabs on what we are spending our money on.

While making cash payments, it does become a little hard to keep a track of anything but

the largest bills. But in the case of credit cards, osur credit card slips and our monthly

statements clearly tell us how we have been spending our money.

Moreover, it is becoming almost too easy to get credit cards these days. I constantly have

cold callers phoning me to give me "a great new credit card deal". Salespersons

occasionally walk into our office offering discounts if a group of people decides to get

that credit card immediately. Why, credit card vendors even put up stalls at strategic

locations and these also help get more customers.

However, the ease with which we can get credit cards can be one of the disadvantages.

Nowadays, we always run the risk of landing up with a card that is of no use. When the

terms seem to be too easy, we should ensure that we read the fine print carefully.

Before availing of a credit card, it is necessary to understand the benefits and the risks.

Often enough, a credit card may seem to offer a great deal, but there may be some

disadvantages that one is overlooking. The only way to tackle this is to ensure that we

complete our research before we go credit card hunting. Then we should easily find

some great deals...

Future of plastic money in india?

FUTURE SCENARIO OF PLASTIC CARD.

Starting from 'Diners Club', some 50 years ago, the card industry has been growing with

a rapid pace world over and so has been the growth in the domestic card industry. With

only two players in domestic card industry, HSBC and Citibank in the early 80s, the

number swelled to over 25 in the year 2001. Credit cards in India, made their debut in

1981, and are on the verge of an unprecedented boom. Between 1987 and 2001, the

market has virtually grown to over 4 million cards with over 25-30% of compounded

annual growth in new cardholders base.

Its not that only the card numbers have increased, but even the types of cards on offer

have seen a surge. Today the domestic card industry is flooded with different types of

cards ranging from gold, silver, global, co-branded credit cards, smart to secure, ….the

list is endless. Foreign banks have shouldered the major responsibility of increasing the

card base and adding value-added services to the card products in the past. This is also

evident from the fact that the market share of these foreign banks is estimated to be well

over 70%. But the scenario has changed dramatically in the last of couple of years with

the entry of State Bank of India (SBI), a domestic major in the banking sector. More and

more nationalised banks and private sector banks like ICICI and HDFC Bank are

aggressively launching credit card with value added features.

There is immense growth potential in the domestic card industry. A glance at the Indian

population reveals that India's middle/upper middle class (target segment) represents a

population of over 10 m. There are only 2 to 3 m cardholders, each possessing an

average of 2 cards. This is a very low figure given India's huge middle to upper class

population. There is no doubt that the domestic card industry has to yet to mature and

offers significant long-term growth potential.

Given the lack of maturity of the domestic card industry, its growth will depend upon

building core retail business, with more sophisticated products. In the expansion of

domestic credit card market, the existing foreign players, SBI, other nationalised banks

and the new domestic private sector banks are expected to play important role with

complementary strategies.

Foreign banks with the advantage of technology and industry experience are expected to

concentrate on increasing card spending and customer loyalty in the major cities. SBI, on

the other hand is expected to capitalize its superior distribution network to expand card

acceptance in the smaller towns. The new private sector banks would have the

opportunity to capture significant market share by combining the strengths of foreign

banks and nationalised bank like SBI.

Although at present the card market is mainly limited to India's relatively bigger cities

and tourist locations only, there is also a potential in smaller cities. Domestic banks,

owing to their vast network and reach to smaller cities, can easily tap this potential. They

would be better off, penetrating into smaller cities and bringing credit card to the masses

rather than cannibalising other foreign banks' existing cardholder base.

The efforts of these banks to increase the card base is going to be wholeheartedly

supported by the residents of these smaller cities with their higher disposable income,

changing lifestyle, increasing travel and the growth in the entertainment sector.

Why Cut Trees, Use Plastic Money

Looking at the pace we are growing with our

population, one would wonder how long we

could sustain by felling trees to produce paper

currency notes in India? Sometimes I shudder

to think of such questions which does not have

immediate answers and we still continue to

deplete those resources.

As I certainly appreciate the invention of currency made of paper instead of coins. Just

imagine if we still had coins in vogue, a corporate employee or a businessman carrying a

gunny bag full of coins as his pay check to home. What a hard work let alone earning but

to take it home.

India is earliest one to start coins in the history and Bank Of Hindustan might have been

the first known bank from 17th century, but I feel we did not progress much after that as

pioneers to show the world an alternate form for paper currency. Why cannot we use

polymer as an alternate material, which Australia has successfully started using it.

Australia is first one to use polymer for making currency, which is called as plastic

money.

Using paper may not be an immediate threat for rest of the western countries if this is

what India following. But its certainly going to pose an issue for India very soon with

depleting forest reserves. Government mulled over using Polymer early this year but it

did not make any headway after that.

Couple of advantages of using Polymer:

Difficult to counterfeit the currency notes

Easy to recycle

High durability when compared to paper currency

I also wonder why do we print such long notes wasting more paper and material used. If

I compare our 100-rupee denomination with any Euro, Pound or Dollar, it certainly looks

bigger consuming more material. Why could not we have small notes printed thereby at

least saving resources for some more time until we implement alternatives.

Concept of Plastic Money

Credit cards in India is gaining ground. A number of banks in India are encouraging people to use credit card. The concept of credit card was used in 1950 with the launch of charge cards in USA by Diners Club and American Express. Credit card however became more popular with use of magnetic strip in 1970.

Credit card in India became popular with the introduction of foreign banks in the country.

Credit cards are financial instruments, which can be used more than once to borrow money or buy products and services on credit. Basically banks, retail stores and other businesses issue these.

Major Banks issuing Credit Card in India

State Bank of India credit card (SBI credit card) Bank of Baroda credit card or BoB credit card ICICI credit card HDFC credit card IDBI credit card ABN AMRO credit card Standard Chartered credit card HSBC credit card Citibank Credit Card

Precautions taken after receiving credit cardTo Avoid:

Bending the Card.

Exposure to electronic devices and gadgets.

Direct exposure to sunlight.

Be cautious about disclosing your account number over the phone unless you know you're dealing with a reputable company.

Never put your account number on the outside of an envelope or on a postcard.

Draw a line through blank spaces on charge or debit slips above the total so the amount cannot be changed.

Don't sign a blank charge or debit slip.

Tear up carbons and save your receipts to check against your monthly statements.

Cut up old cards - cutting through the account number - before disposing of them.

Open monthly statements promptly and compare them with your receipts. Report mistakes or discrepancies as soon as possible to the special address listed on your statement for inquiries. Under the FCBA (credit cards) and the EFTA (ATM or debit cards), the card issuer must investigate errors reported to them within 60 days of the date your statement was mailed to you.

Keep a record - in a safe place separate from your cards - of your account numbers, expiration dates, and the telephone numbers of each card issuer so you can report a loss quickly.

Carry only those cards that you anticipate you'll need.

To Do:

Please sign on the signature panel on the reverse of the Card immediately with a non-erasable ball-point pen (preferably in black ink). This will ensure that the benefits of membership are yours and yours alone.

Keep the Card in a prominent place in your wallet. You will notice if it is missing.

Reasons credit card being rejected at retail outlet:

One may have exceeded the borrowing limit or defaulted (constantly) on minimum payment due.

The Card is hotlisted.

The card has crossed its expiration date.

Non-receipt of dues of one-card blocks future transactions on any other card(s) held of the same card-issuing bank.

The magnetic stripe on the reverse of the card is damaged i.e. has been scratched or exposed to continuous heat/direct sunlight or magnetic field-like card kept near a TV set / other electronic appliances.

Systems or technology failures have in rare instances also led to non acceptance of cards when swiped through an Electronic Terminal.

Global player in credit card market

MasterCard

MasterCard is a product of MasterCard International and along with VISA are distributed by financial institutions around the world. Cardholders borrow money against a line of credit and pay it back with interest if the balance is carried over from month to month. Its products are issued by 23,000 financial institutions in 220 countries and territories. In 1998, it had almost 700 million cards in circulation, whose users spent $650 billion in more than 16.2 million locations.

VISA Card

VISA cards is a product of VISA USA and along with MasterCard is distributed by financial institutions around the world. A VISA cardholder borrows money against a credit line and repays the money with interest if the balance is carried over from month to month in a revolving line of credit. Nearly 600 million cards carry one of the VISA brands and more than 14 million locations accept VISA cards.

American Express

The world's favorite card is American Express Credit Card. More than 57 million cards are in circulation and growing and it is still growing further. Around US $ 123 billion was spent last year through American Express Cards and it is poised to be the world's No. 1 card in the near future. In a regressive US economy last year, the total amount spent on American Express cards rose by 4 percent. American Express cards are very popular in the U.S., Canada, Europe and Asia and are used widely in the retail and everyday expenses segment.

Diners Club International

Diners Club is the world's No. 1 Charge Card. Diners Club cardholders reside all over the world and the Diners Card is a alltime favourite for corporates. There are more than 8 million Diners Club cardholders. They are affluent and are frequent travelers in premier businesses and institutions, including Fortune 500 companies and leading global corporations.

JCB Cards

The JCB Card has a merchant network of 10.93 million in approximately 189 countries. It is supported by over 320 financial institutions worldwide and serves

more than 48 million cardholders in eighteen countries world wide. The JCB philosophy of "identify the customer's needs and please the customer with Service from the Heart" is paying rich dividends as their customers spend US$43 billion annually on their JCB cards.

Grace / Interest Free Period

The number of days you have on a card before a card issuer starts charging you interest is called grace period. Usually this period is the number of days between the statement date and the due date of payment. Grace periods on credit cards are usually 2-3 weeks. However, there is likely to be no grace for balances carried forward from previous month and fresh purchases thereafter if any.

The following are some of the varieties of credit cards in India

ANZ - Gold ANZ - Silver Bank Of India - Indiacard Bol - Taj Premium Bol - Gold BoB - Exclusive BoB - Premium Canara Bank - Cancard Citibank - Gold Citibank - Silver Citibank WWF Card Citibank Visa Card for Women Citibank Cry Card Citibank Silver International Credit Card Citibank Women's International Credit Card Citibank Gold International Credit Card Citibank Electronic Credit Card Citibank Maruti International Credit Card Citibank Times Card Citibank Indian Oil International Credit Card Citibank Citi Diners Club Card HSBC - Gold HSBC - Classic ICICI Sterling Silver Credit Card ICICI Solid Gold Credit Card ICICI True Blue Credit Card SBI Card Stanchart - Gold Stanchart - Executive Stanchart - Classic Thomas Cook Standard Chartered Global Credit Card

Standard segregation of credit cards

Standard Card - It is the most basic card (sans all frills) offered by issuers.

Classic Card - Brand name for the standard card issued by VISA.

Gold Card/Executive Card - A credit card that offers a higher line of credit than a standard card. Income eligibility is also higher. In addition, issuers provide extra perks or incentives to cardholders.

Platinum Card - A credit card with a higher limit and additional perks than a gold card.

Titanium Card - A card with an even higher limit than a platinum card.

The following are some of the plus features of credit card in India

Hotel discounts Travel fare discounts Free global calling card Lost baggage insurance Accident insurance Insurance on goods purchased Waiver of payment in case of accidental death Household insurance

Some facts of credit cards

The first card was issued in India by Visa in 1981.

The country's first Gold Card was also issued from Visa in 1986.

The first international credit card was issued to a restricted number of customers by Andhra Bank in 1987 through the Visa program, after getting special permission from the Reserve Bank of India.

The credit cards are shape and size, as specified by the ISO 7810 standard. It is generally of plastic quality. It is also sometimes known as Plastic Money.

FAQs

What does Grace / Interest Free Period Mean?

What is implied in Cash Advance?

How to make payments from Dubai to the already existing Citibank cards in India. How to avail of the statements to know the current bank balance of each card. Is online facility available?

Can I use my Global credit card on the net to pay some US company for web hosting charges? or I have to obtain permission from RBI. If any permissions are needed, How to get them?

How will I know if my Credit Card application has got approved?

How will I know if my Credit Card application has got declined?

What to do if Credit Card is Lost or Stolen?

What does Grace / Interest Free Period Mean?

The number of days given to you on your card before the card issuer starts

charging you interest is called grace period. Generally the grace period is the

number of days between the statement date and the due date of payment.

Grace periods on credit cards are usually 2-3 weeks. However, there is likely to

be no grace for balances carried forward from previous month and fresh

purchases thereafter if any.

What is implied in Cash Advance?

Cash advances on Credit Cards are convenient and the easiest facility to utilise.

Manority of the banks in India charge a transaction fee as well as service fee /

interest charge on cash advances. This service fee accrues from the date of the

advance (as soon as you receive the cash) to the date of full payment. The

charges varies from banks to banks. Cash advance facility is a part of the overall

credit limit

assigned to a cardholder. The limit is of cash acvance is always lesser than the

borrowing limit or the credit limit.

How to make payments from Dubai to the already existing Citibank cards

in India. How to avail of the statements to know the current bank balance

of each card. Is online facility available?

According to RBI " Resident Indians may be nominated as additional/add-on

card holders by non-residents. However, the non-residents from their foreign

currency funds should meet claims arising out of use of such cards by residents

only.In cases where the cards have been arranged by NRIs these liabilities may

be met out of NRE/FCNR accounts in India also. Under no circumstances will

any remittance be allowed by residents from India to settle their claims against

use of such additional/add-on cards". NRIs get rupee credit cards which are

valid for use in India, Nepal and Bhutan.

Can I use my Global credit card on the net to pay some US company for

web hosting charges? or I have to obtain permission from RBI. If any

permissions are needed, How to get them?

The RBI's exchange control manual mentions that 'International Credit Cards'

can be used for "Registration of Internet domain name, hosting charges for

website/home pages overseas and access fees for Internet related services

through website". Before using your Global Credit Card on the net for web

hosting charges, you further clarify the aforesaid issue or seek permission from

your card issuer. Even get in touch with the card issuing bank or organisation

directly for such clarifications.

How will I know if my Credit Card application has got approved?

It is suggested to give your mobile number and e-mail id at the time of

application for the Credit Card. This will help the issuer to intimate you either

through SMS or through e-mail with the approved status of your application. You

will also receive a letter by post informing you of the Card approval. You should

be receiving your Card around the same time as the approval letter.

How will I know if my Credit Card application has got declined?

You will receive a letter from the Bank even if your application for Card is not

approved. If in case there is a further information of missing documents, you will

be sent a letter asking for the same. Then you need to fulfil with the documents

to the specified address.

What to do if Credit Card is Lost or Stolen?

Report the loss or theft of your credit cards to the card issuers to the earliest

through their 24-hour helpline service. Follow up your phone calls with a letter.

Include your account number, when you noticed your card was missing, and the

date you first reported the loss.

After doing these, check your homeowner's insurance policy to see if it covers

your liability for card thefts. If yes its fine otherwise change your policy to include

this protection.

Before the intimation, different banks have their own limit of loss bearing by the

card holder. After the intimation, it is the bank who bears the loss if any amount

is spent.

Life is Easier With Plastic Money

As the cities of India are getting a cosmopolitan touch day by day, the malls

spanning huge scope and the world class brands making India their most

favoured hub, new reasons for shelling out money have also taken birth. The

huge plazas and shopping complexes displaying varied, alluring collection of

goods make us forget everything. The rise in the living standards has also given

a way to lavish expenditures.

The past decade has seen an escalation in the standards of the Indian cities

especially the metros. The multinational companies establishing their foothold in

India have helped the majority of Indian population to not only make their both

ends meet but also to make a luxurious living in return of their service. More

earning means more spending. This is how credit cards evolved themselves.

The etymology of credit cards is no doubt impressive and but a credit card can

ransack your funds totally if not used sensibly. Let us throw some light on the

usage and procurement of instant approval credit cards.

The importance of plastic money in today’s scenario

1. Introduction2. Age of plastic money3. Investment avenues4. The origin of credit cards5. History of credit cards6. The functions of credit cards7. Salient features of credit cards8. Advantages and disadvantages of credit cards9. Major types of credit cards10. The need for credit cards11. Risks involved in the credit card business12. A study on citibank credit cards13. A study on ICICI bank credit cards14. A study on HDFC credit cards15. Meaning and functions of a debit cards16. Advantages and disadvantages of debit cards17. Rise and usage of smart cards18. Market survey, data collection and interpretation of the survey/research19. Conclusion20. Bibliography

Abstract : Theses ... Financial cards witnessed a robust growth in India in 2002-03. The number of cards in circulation increased by almost 50 per cent. The growth in transaction value, at 95 per cent, was even more spectacular. These results are attributable to the thriving economy which led to a large increase in disposable income for mid- and high-level income groups in urban and metropolitan areas. Consumers were not only more open to the possibility of owning a financial card, but were also more than willing to use their cards to settle dues. The status symbol aspect of owning and using cards, too, played its part in bringing about such robust growth over the space of a single year. Debit cards, in particular, proved immensely popular. The number and transaction volumes of all types of financial cards grew substantially between 2002 and 2003. But it was debit cards that played the pivotal role. Consumers preferred debit cards because they were wary of winding up spending more than they could afford. Another contributing factor was the quiet but aggressive promotion campaign launched by key `producers' in this sector. The growth of credit cards in number and transaction volumes in India was low compared to other countries in the Asia-Pacific region. But there is definitely room for further growth. Debit cards, too, have yet to realize their full potential. Among the factors that limited

growth was the comparatively slow rate of growth of ATMs in India. This is not the way most Indians perceive this issue, but cross-country statistics very definitely bear out the position as stated in the Executive Summary of a $1400-report on `Financial Cards in India'. It is, however, expected that this constraint to further growth will ease up in the near future as the advent of ever-new technologies drives down the costs of opening and operating terminals. In the meantime, the trend in India has been to greatly enhance the networking of ATMs. Cards issued by one bank, are increasingly accepted by ATMs owned and operated by other banks, on the payment of a small fee. This, incidentally, is true of debit cards as well; not only of credit cards. A large number of cardholders, however, remain unaware of this development. Debit cards issued by, say, HSBC, can be used at all `Visa electron' enabled ATMs, including those belonging to Citibank and HDFC bank. HSBC debit card drawals on HDFC Bank terminals cost only Rs 55. If, on the other hand, you merely wish to check the balance in your account, you can do so for a mere Rs 15. Credit cards are often used for `big ticket' spending in India, like dining at 5 star hotels, and purchasing (often reimbursable) air tickets. Industry sources believe that in future credit cards are also likely to be used in a big way for the payment of school fees, and hospitalization expenses. Projections for the 2003-2008 period, the number of financial cards in circulation will register a compounded annual growth rate of nearly 51 per cent. These estimate, however, seems conservative, representing as it does only a 2 per cent increase over the growth between 2002 and 2003. Debit cards are expected to continue to spearhead the growth of financial cards in terms of the number of cards. Though, for a variety of reasons, this may not be the case in terms of transaction volumes.

More abstract from The importance of plastic money in today’s scenario

They began appearing a decade ago in gas stations. Then in convenience stores and supermarkets. By the end of 1996, terminals that accept payment by debit card will be in post offices throughout the country. The U.S. Postal Service has awarded a contract to NationsBank Corp. to put the machines into 33,000 post offices. As part of this program, the Postal Service also will allow customers to pay for purchases with VISA and MasterCard credit cards. The contract, which calls for installation of 50,000 terminals, has been greeted with delight by regional networks that link the electronic terminals and banks.

The sector of plastic money has been an upward trend in India. There are various players in India which have given boost to there sector namely, Standard Chartered, State Bank o India, Bank of Baroda, Citi bank, ICICI Bank, HSBC etc. The different facilities offered by different issuers have lured the consumers. Today with increase in competition issuer is becoming more and more liberal in order to tap more and more customers. However an attempt to increase business by means of being liberal has proved to be un- lucrative as it has given rise to mounting of bad debts to the issuer.

The protection offered to debit card fraud is similar but with a few exceptions. For example, your liability under federal law is limited to $50, the same as for a credit card, but only if you notify the issuer within two business days of discovering the card's loss or theft. Your liability for debit card fraud can jump up to $500 if you don't report the loss or theft within two business days And if you are the type of person that gives a

passing glance to your monthly bank statement, you could be totally liable for any fraudulent debit card charges if you wait 60 days or more from the time your statement is mailed.

Ah the temptations of a credit card. The more you have the richer you are?? The glory is oh so painfully short lived. One careless extravagant moment and you could spend the rest of your life paying for it. So keep those urges down. Limit yourself to ONE credit card that you use in case of emergencies or in cases where the only payment method is your credit card. Having said all the above, here’s the parting shot. Credit can be your maker or breaker.

These banks take about a month to replace the missing card. To combat this, banks have started the Photocard Option which provides the photograph of the cardholder on the card. They are also providing information about the lost/stolen cards through the Hot Card Bulletin which is continuously upgraded and sent to merchant establishments to provide them with the current status. But the success of this measure is debatable. A majority of the credit card losses are skewed towards the issuer as the risk on the cards is carried by the issuer.

As the name suggests, the instant approval credit cards are obtained in a small

time frame with less hassles and formalities. These cards are basically put to

use for paying off the electricity bills, phone bills and for other expenses like

refilling your car etc. The only reason which makes the procedure for procuring

an instant approval card is that the operations are done completely online. The

application form is filled and submitted online and the notifications are given

through mails. This makes the procedure quick.

Another factor that can get you instant approval is the availability of a co-signer.

A co-signer can be a person who can take the guarantee of your credibility. If the

co-signer is from an impressive background or occupation, for e.g., a

government employee then the card will be in your hands more or less within a

week. This way the bank or the card lending company also feels assured that

the money is in safe hands and the chances of the amount going astray are

bleak.

The idea of carrying instant cash in the form of a plastic card for all your needs is

of course quite tempting but one must bear in mind that he should analyse his

financial conditions as to whether or not the repayment of the amount is within

his reach. Using the credit card blindly is the last thing for a wise man to do.

One of the basic deciding factors of getting a credit card approved is your credit

history. A bad credit history can make the chances of getting approval for the

card bleak or even far from possible. Customers who have a credit grade

ranging from good to excellent can get approval in almost no time.

While browsing the Internet, you will come across scores of advertisements for

credit cards. Hundreds of thousands of companies declare their efficiency in

providing the credit cards without making the customer wait. But it is the duty of

the customer to compare credit card interest rates and other factors that hold

significance.

The rate of interest of the cards should not be high to such an extent that you

end up getting stuck in the process of repaying the amount. The terms and

conditions of the company should be flexible. However no matter how much hard

a person tries to save himself from the financial crunch, there comes a month in

everybody's life when he or she becomes late in paying off the bills. That may be

due to lack of funds, or the payment date might have slipped off your mind, or

may be because of your tight schedule you fail to find time to repay the debts. It

is advisable to note carefully the penalty imposed on late payment. It should not

be too harsh for your own good. Reach a higher level of satisfaction with an

instant approval credit card.

Ebook Factors Affecting the Probability of Credit Card Default and the Intention of Card Use in TurkeyChanges caused by technological advancements have entered all aspects of human life. A technological achievement that has been introduced into daily life is the use of credit cards as a tool for payment. The use of credit cards has increased substantially worldwide in recent years and is replacing currency as a method of payment.

Use of plastic cards as a payment instrument has dramatically increased in Turkey since the second half of 1990s. There are 21 banks that provide credit cards to their costumers; while the number of credit cards in circulation is 10,045,634 in 1999, it reached to 30,438,883 in 2006; the number of pos devices is 1,196,597 in 2006; and the total amount of purchases and cash advance is 88,628 million New Turkish Liras (60,087 million USD) at the end of 2005 (Interbank Card Center, BKM).

For the general economy and the card holders, there are many advantages of using credit card as a payment instrument such as eliminating the risk of lost or stolen, fulfilling the cash need, providing the possibility of purchases and cash withdrawal anywhere in the world, increasing the number of customers for merchants, reducing the need of cash circulation and letting all money transactions are registered into the economical system (BKM). Cohen (2005) stated that the force that affects the economy in the developed countries is now especially the purchases done with credit cards when compared to individual saving which can be also considered to be true for the developing countries. According to Warren and Warren-Tyagi (2003) credit cards provide temporary opportunities for people to continue their life standards when their income is not sufficient. Beside the benefits of using the credit cards; there are negative sides for a card user.

As credit card and other debt spirals at a society level in Turkey, it brings with it many socioeconomic problems such as divorcing, filing for bankruptcy, committing suicide and killings of family members. For instance, while the number of people who did not pay their credit card debt was 11,829 in 2001, it reached to 182,076 in 2006 (TCMB). On the average, almost 836 and 13,985 people did not pay their debts each month and faced legal procedures in 2000 and 2005, respectively. The number of committing suicide related to the credit card debts in 2006 was 75 and 41 of those lost their lives (Consumers Commission, 2006).

Since socioeconomic consequences of credit card debt have become one of the most common problems in the country, the problem has received widespread attention of media, public policy makers, card issuers and holders and consumer protection agencies. Within this context, it is important to know which factors have impact on the probability of default and intention of credit use as a financial solution during economic hardship.

It has been argued that personal attitudes play an important role in indebtedness. A person who has a positive attitude towards credit card use is more likely to have more than one credit card and have a significant amount of debt (Chen and Devaney, 2001;

Davies and Lea, 1995; Hayhoe, Leach, and Turner, 1999). From this perspective, it is also important to identify the factors play a role in the formation of intentional behavior towards credit card use.

There are two aims of this study. First, determining the factors affecting the probability of credit card default; and second, determining if the subjective beliefs, the attitude toward behavior and perceived behavior control, and socio-economic and demographic factors have any explanatory power in the formation of behavioral intention of financing the expenses with credit cards. Ordered probit and structural equation models based on TpB model are used to meet these objectives. The following sections of this paper involve literature review, data and method where the data and model were defined, empirical findings and finally summary and conclusions.