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Credit cards - Essay Example

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Summary
A famous French poet once said, ‘It is only the poor who pay cash, and that not from virtue, but because they are refused credit.’ The term credit has different meanings for different people. For the poor, credit is delaying payment not out of choice but from necessity. …
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Credit cards
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Credit cards

Download file to see previous pages... For the rich, credit is a means of delaying payment for an item simply because the opportunity exists to purchase several resources without the use of cash transactions. For the business man credit is the chance to provide persons with resources without immediate payment whilst gaining extra income for the customer’s delayed payment. Credit therefore can be an advantage or a disadvantage. It depends on whose eyes you are using. In today’s information age the main method for receiving and allowing credit is the credit card. This essay will focus on how the credit card has evolved as well as its benefits and disadvantages. Today the credit card has become popular all over the world but does is it hold equal benefits for all its users?
The piece of plastic called a credit card issued to customers by a Bank is used to make payments for various exchanges. It operates through a system of borrowing money. The customer gets to purchase items immediately and repay the bank at later date. The system of exchanging goods on credit for a card began since the late 1800s. By early 1900s oil companies and department stores gave out individual cards call ‘proprietary cards’. These businesses created these cards to improve customer loyalty and customer service (Gerson and Woolsey, 2009). The interest in cards soon spread to the other industries and in 1946 John Biggins presented the first bank card to be used in America only. It was called ‘Charg-It’.
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Therefore, 1959 marked the beginning of flexible payment but also the beginning of finance charges for customers. In 1966, credit cards were now accepted for the payment of a variety of purchases and in 1967 Barclays launched the first credit card in the United Kingdom. From this time the bank card industry grew at a rapid rate. Presently, more than fifty percent of all transactions in the United States of America and the United Kingdom are made on credit cards. This explosion of the use of credit card came about because of the seeming benefits to the customers. One of the most important features for all users is that people can pay immediately for the things they need. For all users but especially for the poor, the credit card offered a quick and easy help in times of medical and other emergencies. People now had access to a certain amount of money for dealing with unexpected costs. In addition people were able to pay for large purchases, such as furniture, electrical appliances, electronics and even precious jewels. What is more is people were given up to 56 days to pay in full before accumulating interest. Imagine the joy these 56 days gave to individuals who live from pay check to pay check. The supporters of credit cards suggest that users could now manage their purchases more than before as all the purchases made on these cards are listed on written or online statements. Not only did users find it easier to keep track of their purchases via the credit cards statements but they could also organise their budgets. They could observe their expenditures in detail and therefore eliminate those expenditures that were causing them to stray from their budgets. In short, credit ...Download file to see next pagesRead More
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