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Unit 4 E Banking Part 1
Unit 4 E Banking Part 1
Unit 4 E Banking Part 1
Plastic money is a term that is used predominantly in reference to the hard plastic cards we use
every day in place of actual bank notes. They can come in many different forms such as cash
cards, credit cards, debit cards, pre-paid cash cards and store cards.
Debit card
A debit card is a type of facility provided by the banks to its customers to purchase goods and
services against his own saving bank account. So, whenever the transaction takes place, the
amount is deducted from the customer’s account. Here, the bank charges a nominal amount
every month for the use of the card. It can be used for purchasing goods, transfer of funds,
internet banking services, deposits, etc. Nowadays, ATM cum debit card is also available in
the market which allows you to avail all the facilities of the ATM card.
Credit card
A credit card is a type of facility which allows its customers to purchase goods and services on
credit, and the payment is made by a third party (financial institution) on his behalf
immediately. The customer has to pay the credit amount to the third party at a later date. In this
regard, every month, the financial institution sends a bill to the card user for the amount paid
on his behalf. Usually the user is allowed a credit period of 30 days within which he can pay
the amount, afterwards, interest is charged at a prescribed rate.