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Plastic cards, or what is described as plastic money, happen to be the best-known

method of payment in this day and age. Most of us did not grasp how quickly that little
piece of plastic took its place in our lives. Credit cards online will continue to be used for
the multiple advantages they offer us.
We realize all too well that online credit cards work
as an expedient payment option to pay for our many
purchases. Imagine stashing money in all your pockets as
against merely a little plastic rectangle.
Additionally, at present going around with a large quantity of
cash on you is not a wise choice in terms of safety. The
safety issue assumes even greater significance when you are visiting someplace far.
Money is easy to spot and pick-pockets and thieves are able to use nicked money equally
easily because these funds are not traceable. Online credit card dealings however, are
detectable and carry an audit trail as well.
Most times, people find using online
credit card their way out of an otherwise
hopeless situation. Several people found
themselves purchasing airline tickets on-line,
reserving a hotel room, or renting a car. Then
again, there are times when you require some
more ready money at once. In these kinds of
emergency situations, you can switch to using
credit by using your credit cards online.
Generally, credit card online give a maximum
of fifty days of interest free use of your credit. Likewise, some merchants state, in their
product promotion, that you have the ability to get yourself a high-priced article (e.g.
USD 6,000) today and pay for it in a particular number of even installments. Accordingly,
you can handle your finances efficiently so as to remit your periodic payments and do so
without any additional charges for interest.

A lot of individuals look at your credit report (which lists your credit history and
is created and updated using information from banks, merchants and other creditors) to
evaluate you, consequently it`s crucial that your credit report is as good as possible.
Potential employers, insurance establishments, mortgage organizations, and several other
institutions will attempt to get an idea of your character by going through this factual
data. Possessing a credit cards online and availing of it wisely will help create a positive
credit history.
Theres no need to get anxious over whether you`ve adequate money on your
person or whether you don`t. Nor do you need to use up large chunks of your time
waiting in lengthy queues in a bank branch, or spend time drawing money from an
automatic teller machine when instead you can always take your credit card wherever you
go, and that takes care of all your financial needs.
Several online credit card have travel insurance
(that is, insurance to cover problems associated with
traveling) built into them as an inherent function.
Consequently, if you are among those that are often on the
move, this feature might be a tangible plus point. Even so,
you must make sure to confirm if this travel insurance
provides adequate coverage for you. In addition, carefully go over the terms and
conditions that come with such insurance. Misplaced baggage is something which is
almost always taken care of with such insurance.
You may treat your online credit cards as an
additional supplier of money when abroad - and this
whenever you don`t wish to avail of your prepaid visa
mastercard as your first source of funds, in order to avoid





Therefore, when you find yourself strapped for money or

travelers` checks you can bank on your charge cards as a
fallback option. With such a plethora of useful features when
you`re under financial stress, it is a convenience that you cannot (rather mustn`t) avoid.
Indeed, online credit card is really an essential commodity in today`s global environment.

Credit card debt
Credit cards are a boon - they give us so much financial
freedom and help us keep our options open. But they can
also work as a double-edged sword. Credit card debt can
bring you to ruin - even as you lead an affluent lifestyle.
Rolling credit - if you get entangled in it - it can pull you
down under. If you're already caught in the mesh - get out of
it as soon as possible - even if you have to deny yourself
every single luxury for the next few months. If you're on the
verge of getting into a credit card debt trap - avoid it at all costs.

Keep an account of all your bills. Do they tally with the statement send by the credit
card company? You'll be amazed at how many indiscretions and mistakes can take
place at this level. Always check and double-check your statement.

Take a good look at your bills. Where is it that you're overspending? What are the
items you would have resisted from buying if you would have had to pay cash? Give
it serious thought - should you be indulging in them when you can't afford them?

Resorting to pay the minimum amount due is okay at a time of need - but certainly
not something to be done regularly. The interest you will need to be pay is exorbitant
- and by the time you're done settling your debt you would have paid twenty to twenty
five times more than if you had paid cash in the first place.

Inculcate a financial discipline. Make a budget, and stick to it. Keep a watch over
your bank account. What is the income as compared to the outgoing money? Be your
own accountant - and be a good one.

Why not stop impulsive buying? Unless you have an accommodating bank balance you're really throwing away your precious money on things you don't really want or
need. Resist from online shopping - it has a tendency to rob you of control over your
impulses or your money.

Credit card - credit yourself with sense - and use them to your advantage.

Handy Gift Cards

A convenient alternative to Gift Vouchers/Gift Certificates, the
Gift Card can be used more than once at various merchant
establishments, which means the recipient can shop at various outlets
until the specified rupee amount has been spent.

The Gift Card can be used more than once. The person you are gifting it to can keep
making purchases till the specified value on the card has been spent.

The card is available to idbi bank and non-idbi bank customers.

The Rupee denominated Gift Card can be purchased over the counter for a minimum
limit of Rs.500/- or a maximum limit of Rs. 20,000/-

The Gift Card is valid for a period of one year from the date of issue.
Perfect for birthdays, graduations, anniversaries, holidays, employee rewards,

customer appreciation and more, the gift card is a practical and convenient solution to gift
giving, eliminating the chances of giving an unwanted gift.
There have been many occasions when we have received gifts that are not really
suitable for our taste or lifestyle. There surely have been occasions when we have a hard
time picking the perfect gift. This is where this unique gifting concept will come in
One of the most desirable benefits for the customers is convenience and quick
availability at any idbi bank branch. With the tie-up with VISA International, the Gift
Card can used to make purchases at over 50,000 establishments in India.
This is good news for the festive season. Mr.Vijay of Customer Support of one of the
chennai Branches says that this unique and convenient concept of a pre-paid card that has
'Visa power' will enable the receiver to get what they like, when they like. The process is
simple. Pay at an IDBI counter and get the card on demand. Minimum value would be
Rs.500/- and maximum Rs.20,000/So what do you think, readers? Convenience goes plastic and elastic to suit the world
of today. Good or bad? Have your say too. Right here in the space below.

Petro Card
A Petro Card is a credit card-size plastic card that allows you to pay
for fuel with a card. The Petro Card is a variation of the Smart Card. It has
an embedded microprocessor chip, which keeps track of the money you
load on your card and the balance available on the card.
How it works?
You can get your Petro Card after you enrol into the PetroBonus programme of a
company selling petrol and other fuel. To initialise this card, you have to first take it to a
participating PetroBonus dealer. You will pay a sum of money to the dealer who will
issue you a Petro Card. Then the card will be placed on a 'reader'. You have to enter the
pin code given and lo and behold! Loaded onto the card will be the sum of money that
you want.
Once the card is loaded, you can use it to buy petrol, diesel, lubricants or any other
product or service available at the pump. Usually the initial loading has to be for a
minimum amount of Rs.500 and in multiples of Rs.100 thereof. You will also be given a
receipt for the amount loaded.
Banking has evolved a long way from the days of
the medieval money lenders counting coins on
the bench to the present scenario, where it is hard
to trace the trail of money from the beginning to
the end.
The trail starts right from the small saver leaving
a few rupees in his local bank to the billions of
rupee loans raised by a syndicate banks and financial institutions, capable of financing
projects in any country in the world. Still, these banking majors are heavily dependent
upon their retail home base of savers and borrowers. Most of the bankers began focusing
on this retail market segment as global competition intensified in late seventies and early

Credit cards, one of the

banking products that cater to
the needs of retail segment has





geometric progression in recent

years. This growth has been




development in the field of

technology, without which this
could not have been possible.
The history of phenomenal growth in the credit card segment traces way back to
in 1950, the time when Diners Club was established. The card provided select members
with credit at 22 restaurants in New York and collected a commission for paying the bills
promptly. The credit card industry got a further boost with the arrival of American
Express in the arena in 1958. American Express began selling their card as a prestige to
hotels, restaurants, shops or airlines in America and slowly expanded the network across
the world.
The success of these two players attracted many other banks to join the credit card
business. The entire breed of new players saw a fresh opportunity of granting unsecured
loans at high interest rates to those credit cardholders who did not pay their bills on time.
These banks were not so concerned with collecting commissions from shops but were
thriving on high interest income from those who did not pay their bills on time.
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





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 Indias 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.







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.


present the card market is

mainly limited to Indias
relatively bigger cities and



there is also a potential in

smaller cities. Domestic
banks, owing to their vast
network and reach


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.


When was the last time you used hard cash in a shopping mall or a grocery store?
If you have tickled your grey cells enough, let me prove Indias renewed passion for the
Todays consumers have moved away from using
cards only for big ticket purchases such as travel and

entertainment. They are now shifting daily expenditure such as groceries and other types
of household spending from cash to electronic payments.
A study by Visa International and National Council of Applied Economic
Research (NCAER) reveals segments such as handicrafts (56%), consumer durables
(54%), telecom (53%), departmental stores (52%), petrol (52%), jewellery (49%) and
supermarkets (49%) have shown highest year on year growth in card usage.
Indias bank card business has entered a period of rapid development with a
compounded annualised growth rate (CAGR) of 55% to an estimated 44 million credit
and debit cards in 2004. Debit and credit card volumes also increased from $23 billion in
However, 80% of card volumes from ATM cash withdrawals, predominantly with
debit cards, said the study. Debit cards are still largely used for cash withdrawals at
ATMs. This is a natural consequence of an astronomical growth in ATMs to 14,000
across the country by December 2004, against 1,100 ATMs in select pockets of metros,
three years ago.
Given the cost savings for banks from debit card transactions, increase in
merchant acceptance locations and greater consumer familiarity, it is expected that most
ATM cards would be converted to debit cards with added functionality for point-of-sale
usage over the next two years.
Electronic payments can help reduce the size of the informal economy. When cash
remains outside the banking system, the possibilities of supplying productive capital to
the economy are diminished. Bringing cash into the banking system produces an equal
increase in bank reserves, enabling banks to facilitate more consumer and commercial
loans, thereby stimulating business growth and consumption.
Governments can utilise electronic payments as a channel to modernising and
boosting efficiencies in their respective economies. Electronic payments can be used to
minimise leakage of government funds, which could otherwise be utilised to maximise
returns through effective resource allocation within the economy.

Even if it is 10% of



expenditure, it amounts to Rs
47,425.5 crore, in 2002-03,
which may be saved through
electronic payments.






electronic payment system

into government expenditure,
for procurement and purchasing as well as for activities like tax collection and other
administrative processes may facilitate more effective use of public funds.
However, the total spend in India on a payment card is still less than 1% of the countrys
This indicates that the growth potential of the payment card industry is enormous.
Around 30 million people are eligible for credit cards and 150 million people are eligible
for debit cards.


The plastic money market in India witnessed a quantum growth in the last one
year. India has out perfomed most other markets in the Asia Pacific region with both
retail sales volumes and card sales volume growing by over 60% in the last one year,
according to Visa International .


For the 12 months ended June

05, the retail sales volume of
Visa in India rose 66% to $3.8
bn. Retail sales volume refer
to spends by card holders,
both debit and credit cards at
point of sales or merchants.

This would mean that more customers have started using their debit and credit for
purchasing goods and for other transactions. According to the company, it has a 70%
share of the retail sales volume through cards in the country.
Also, the card sales volume (CSV), which includes cash withdrawals at ATMs,
has seen a growth of 76% to $23.8 bn. CSV would include retail sales volumes and cash
withdrawals from ATMs. Most of the banks in India have converted their ATM cards to
debit cards.
The total number of Visa cards issued in the country saw a growth of 42% to 30
mn, of which Visa credit cards grew 38% to 9 mn. The total number of Visa debit cards
grew 45% to 21m.

The total number of credit cards in the

country is estimated to be over 15m cards.
The company has seen a 77% compounded


annual growth rate in cards in the last four years and a 50% growth in the retail sales
India has a higher number of Visa issued cards than in some of the other SouthEast Asian countries like Thailand, Indonesia, Malaysia and Singapore. Compared to
30.18 mn cards in India, Thailand, which is the second largest market for Visa, has 16.4
mn cards. However, in card sales volumes, Thailand is a bigger market than India at
$26.07 bn as against $23.81bn. The other markets, however, have lower card sales
volumes than India.


For most of us, Credit Card means "Plastic Money" which is not only very
convenient to carry, can be used in millions of establishments and Banks across the
Globe with great ease for purchasing stuff or withdrawing cash at ATMs.
All Credit Cards carry almost similar features and are governed by the identical
terms and conditions for their use by the credit card holder. In order to survive in the
competetion, many incentives and exclusive features like Rewards and Bonus Points on

purchases, Insurance Coverage, Waiver of joining fee,Offer of free additional cards etc.
are also announced by many Banks from time to time. Everything seems good for the
Credit Card user on the face of it. However, all is not good as it appears to be. Many of
us are not aware of many such things about these Credit Cards which are not so good.
Some of these facts are: *Most Credit cards charge an interest @2.95% p.m. which
works out to around 35% p.a. on the total outstanding of the credit card if the total
payment is not made by the due date. *Even if you pay the "Minimum Amount "by the
due date, you will be charged the interest on the entire outstanding amount. *Service
Tax as applicable will also be charged on the interest charge which will make the
effective rate of interest on your credit card around 38% per annum. *Even if your
payment is delayed for a single day, you will be charged a hefty late fee. Even if you
have opted to pay the minimum amount, the late fee will be calculated on the total
amount outstanding in case it is delayed. It may also happen sometime that as a
"Minimum Amount" you have paid an small amount say Rs.200/- and it is delayed. You
may be charged a late fee of Rs.200/- on delaying the payment of Rs.200/- by a single
day. *Rewards or Bonus Points accumulated on your Credit Card need to be redeemed
within a specified time limit say within 2 years and these get lapsed thereafter . In order
to get best out of your Credit Card, what one should do is to follow the few simple steps
which are given below: 1.In case you really do not need it, do not hold any credit card.
2.In case you think you should hold a credit card, then make sure that you hold more
than one Credit Card of different issuing banks. 3.Always try to make the full payment
of your total outstanding or get it converted to EMIs for which all banks charge a
concessional rate of interest around 18% p.a. 4.

To study the awareness of the plastic money.

To study the reasons why housewives like to opt for plastic money

To study the usage of the plastic money among housewives

To study the advantages of plastic money

To study the opinion regarding plastic card.


The study can be useful to housewives who are using plastic money as they might
come to know about the use of plastic money. The study can be of great importance to the
housewives for the use of plastic money in shopping, billing, online transactions etc.

1. The information provided by the Housewives is not definitely true.
2. The samples of Housewives are not representative of the total workforce.
3. The Housewives hesitate disclosing the true facts of plastic money in order to
secure their family income.
4. There is no measure to check out whether the information provided by the
Housewives is correct or not.


Many empirical studies have been conducted on the subject of Plastic Money in
India and abroad. The major emphasis of research has been on various issues like frauds,
security, usage pattern, new method of e-payment, etc.
The previous work done on plastic money needs perusal. It has been reviewed to
indicate in a general way the type of work done on this subject in India. It is expected
that the critical examination of the studies would give focus to our problem and help to
indicate the areas which have remained neglected at the hands of the researchers. From
the review of literature, it was found that hardly there was a study which examined the
perception of both users and traders on the usage of plastic money. Also, many studies
concentrated on individual cards, for instance, credit or debit card and neglected the joint
effect and new innovative cards like smart card, charge card and check card. In this study,
an attempt is made to include all types of cards in the analysis.
Barker (1992) in his study, Globalization of credit card usage: The case of a
developing economy investigate the attitude of Turkish consumers towards credit cards,
and the approach of card issuers by surveying two samples of 200 card holders and nonholders. The better educated, middle aged members of the upper middle class seem to be
the prime target; the most important reasons for using a credit card were case of
payment, followed by risk of carrying cash, Non holders do not carry credit cards
because they do not know much about it; informal sources of information appear to be
more influential than mass media advertising in penetrating the market; proposes that the
usage and the administration of credit cards are influenced very much by the
infrastructure of the country and hence, credit card companies have to modify their
marketing and administrative procedures rather than following a standardized approach.
Vora and Gidwani (1993), Plastic at a premium show the usage facilities and
varieties of cards. The research shows that credit card is extremely useful to those people
who use it as to increase their purchasing power through the plastic card. Different cards
provide the different packages to attract the customers like tele-ticketing, discounts,
insurance coverage and provide reward points etc. According to author, the card holders
market has a potential to grow to 7 million, if all tax paying citizens are taken into
account. But these manful efforts at upgrading services can only have a limited impact as

long as the Indian customer remains credit shy. For this, they have to change their
spending habits and keep their card active, so that a piece of plastic becomes a premium
card in an effective way.
Almeida (1995), The Future in cards shows that credit card business is
booming as more than 1.1 million Indians have credit cards with them. Their numbers are
expected to grow at an even faster pace as issuing banks get aggressive. Studies show that
more than 4000 business establishments in the country accept credit cards. The country
now provides all the ingredients for a healthy credit cards industry: a rapidly expanding,
increasingly acquisitive middle class, a growing yen for travel and entertainment
sophisticated merchant establishment and greater transparency in financial system.
Acquiring banks for business from merchant establishment has brought the commission
down and if the issuing bank happens to be also the acquiring bank, it get the entire
merchant discount. Finally, no payment system can ever replace cash in India on a wide
spread basis.
George (1995), The card majors lead the way shows that VISA and Master
Card play a major role in any international payment system. Both VISA and Master Card
act also as franchisers, lending their names to member banks card and acting as
guarantor of payment to merchants willing to accept the cards. For this and for handling
transactions, VISA and Master card charge a fee which varies from country to country,
but is approximately 3 cents (90 paisa) per transaction. They are card clearing agencies.
VISA and Master card each have nearly 22000 banks all over the world as their members
and handle several million transactions each day. This gives them a transaction handling
capability unmatched by any individual bank. They are not credit card companies but
function on the line to provide a global network that allows authorization, clearing and
settlement of card transactions, both of credit and debit cards.
Kaynak (1995), Correlates of credit card acceptance and usage in an advanced
developing Middle Eastern Country. Study shows that with increases level of socioeconomic and technological development, credit card usage particularly increases in
developing countries. An empirical research study conducted in urban Turkey indicates
that there are certain relationship between socio-economic and demographic
characteristics of Turkish consumers and their credit card holding and usage behaviors. It

was observed that one of the determinants of credit card use is related to the age of the
family head and family lifecycle stage. Generally, those household heads who are in
middle and upper age having large discretionary income level are more likely to use
credit cards. This may be termed a social class effect of credit card usage and acceptance.
Despite most of credit card users are urban dwellers, more educated with professional
type of jobs, and high income earners. Authors feel that getting more people to use credit
cards is indeed a marketing challenge. For this credit card issuers are meeting this
challenge by offering to card holders different benefits and incentives and by urging
merchants to promote debit/credit at the point of sale.
Torbet and Marshall (1995), One in the eye to plastic card fraud. Paper
explores the potential use of behavioral and physiological biometric techniques in the
battle against credit card fraud in the retail environment. It discusses different techniques
such as automatic speaker, dynamic signature verification, fingerprint, facial recognition,
retinal and iris scanning, hand and finger geometry. Author feels that while biometric
technologies have the potential to reduce plastic card fraud there are several problems
which must be addressed before they can be used in retail environments, like the
recognition performance, speed of use, usability, customer acceptance, device cost are
considered along with industry standards for biometric devices.
Worthington (1995), The cashless society paper describes the cashless society,
where clumsy and expensive-to handle coins and notes are replaced by efficient
electronic payments initiated by various types of plastic cards is a tantalizing prospect for
the twenty-first century. Some of the interested parties stand to gain more than others if
the cashless society becomes a reality. Paper outlines the rationale of those who are keen
to promote the cashless society and the implications for marketers charged with winning
consumer acceptance for payment by plastic card. Commencing with a European-wide
view of the European plastic card market, focuses on recent developments within the UK,
one of Europes leading countries in the use of plastic cards as a means of payments. The
plastic card payment product is analyzed under the three headings of pay later, pay now
and pay before and a view is offered as to the future prospects for each type of plastic
card in contributing to the development of the cashless society.
Maganty (1996), Changing Dimension. the author discusses the emerging trend

and importance of debit card in daily lives of Indian society. Debit cards are expected to
be in use in places where most transactions are done by cash or cheque in supermarkets,
petrol stations, convenience stores. There cards are designed for customers who like
paying by plastic card but do not want credit. These cards not only keep the cardholder
debt free but also provide a detailed account of spending. These types of cards are ideal
for those who have a tight budget and want to keep within it. Study shows that there are
two types of debit cards i.e. on line and off line debit cards. With the computerization and
modernization plastic money will become the status symbols in the 21 st century of Indian
traditional bound society.
Radhakrishan (1996) study on DEBIT CARDS shows that the debit cards also
have found wide acceptability than credit cards because of assurance of payments to
retailers, switching of cardholders to debit card because of using interest free period to
avoid high interest cost, annual charges as compared to debit cards etc. The study shows
that the growth of service industry in the country, electronic fund transfer, point of
services offer a large potential for banks to cutting down cost associated with the paper
based clearing and payment services. The introduction of debit cards can take place
subsequently and the objective should be to attain a critical mass in issuing number of
such cards so that the operation becomes cost effective.
Black and Morgan (1998), Risk and democratization of credit cards. Research
paper show the dramatic rise in credit card charge-offs in the midst of a vigorous
expansion suggest that bank card borrowers have become inherently riskier. This paper
investigates how the mix of credit card borrowers has changed in recent years, and how
those changes affect delinquency risk. The new card holders seem riskier along several
dimensions. They tend to earn less, and as a result, they owe relative to income. This rise
in debt burden almost certainly contributed to the rise in charge offs, since debt burdens
are a key determinant of delinquency risk. Cardholders are also more likely to work at
relatively unskilled blue collar jobs. This occupation shift may also have contributed to
the rise in charge-offs, since delinquency rates are higher in those occupations, perhaps
income is more cyclical. Some of the personal characteristics and attitudes that have
changed, such as martial status and job tenure also imply somewhat higher risk.
Fernand (1998), What credit card firms wont tell you. shows that convenience

of credit card is not without its cost. The author warned the customers to use the card in
effective and in a rational way because while choosing a particular card, the cardholder
need to check different cost like annual fees, transaction fees, membership fees, and
interest on revolving credit, lost card liability, reward point and facilities attached to
different cards. Sometimes attractive facilities caught the cardholders in their debt trap if
they dont appraise the card before using it. It happens in the normal course, that card
companies wont tell each and every thing to cardholder like whether interest charges are
annually or monthly, transaction fees for using ATM , annual fees VS. transaction fees,
lost card liabilities for unauthorized use of card etc. According to author the card pushers
offer a convenience but a good thing never comes with any strings attached.
Gambir (1998), Credit cards in India. He describes that credit cards are
relatively new to India. Treated as a status symbol and as a vehicle of consumerism
Indian banks burst this business. Till recently as it did not go along very well with the
spirit of people because they do not have much money to spend because of bad economic
conditions. But with increasing economic and financial liberalization and growing
prosperity of the urban middle class banks fells that it is desirable to enter into this line of
business. Author feels that Credit Cards and money transfers with latest technological
changes would definitely reduce the burden on cash in our system. Therefore, RBI has to
give an impetus to the popularity of plastic money which is consistent with present policy
of economic and monetary liberalization.
Carow and Kenneth (1999), Debit, Credit, or Cash: Survey evidence on
Gasoline Purchases. analyzed the consumers payment option to use debit, general
purpose credit cards, gasoline credit cards, or cash. Based on the results from a nested
multinomial logit model, authors found consumers are more likely to use cash when they
have less education , lower incomes, are middle-aged and own fewer credit cards. Debit
and credit card users are younger, more educated and hold more credit cards.
Respondents who use their debit card are less likely to use their gasoline credit card. The
result suggests that greater debit card usage will place the greatest competitive pressure
on the gasoline credit card program.
Steindl (2000), Credit cards, Economization of money, and Interest Rates.
shows the effect of interest rates on use of credit cards, which are increasingly used to

finance consumption. The corollary is a reduction in money demand, which reduces the
interest rates. Greater credit card usage increases the demand for credit, which raises the
interest rate. Three models employing a credit market are used to resolve the problem.
The principal result is that each establishes that the interest rate must rise. An additional
implication is the counterintuitive result that credit does not simply substitute for money
in financing expenditure; rather increased credit card use must result in increased
consumption expenditure.
Warwick and Mansfield (2000), Credit card consumer: college students
knowledge and attitude. Given the proliferation of the credit card industry in todays US
household, and the aggressive promotional tactics employed to get college students to
sign on as customers. This exploratory study takes a look at the credit card activity of
college students at Midwestern campus. The majority of students surveyed did not report
knowledge of their credit card interest rate. Students appear to have a realistic attitude
toward using credit cards, although not knowledgeable about the details of their card.
This study raise the question of whether universities and business schools are doing a
better job of preparing their students to be knowledgeable consumers in the market place
or not.
Azhagaiah (2002), Credit creation through plastic money. This paper focuses
the issues of credit cards usage among consumers. It exhibits the recent development,
evaluate the present status ad assesses the future of the consumer indebtedness by credit
card debt. It also discusses the financial position of the banking sector in India. Strategies
used by the banks to meet competition in credit/debit cards are also discussed. Credit to
individuals and house holds has a vital role to play to create banks credit and money
supply. Author point out that the role of credit cards in the money market, in the years to
come, will be very bright. There is no doubt, the banks which concentrate more on credit
cards will get more benefits by means of credit creation.
Lee, Jinkook (2002), Consumers Use of Credit Cards: Store Credit Card usage
as an Alternative Payment and Financing Medium. asserts consumers use of store-issued
credit cards with particular attention to their function as an alternative payment and
financing medium. Using 1998 survey of consumer finances data, the researchers found
that credit availability through bank cards is negatively correlated with consumer use of

store cards as a financing medium, suggesting the role of store cards as a supplementary
credit line. A negative relationship is also found to exist between consumers bankcard
usage and their use of store cards for a transaction purpose, indicating that store cards
function as a substitute payment medium. Consumers usage of store cards varies
according to function and is related to number of variables including the use of bank
cards, credit history, and attitude towards credit, income, education and ethnicity.
Chakravorti (2003), Theory of credit card networks: A survey of the literature
shows that credit card provide benefits to customers and merchants not provided by other
payment instruments as evidenced by their explosive growth in the number and value of
transactions over the last 20 years. Recently, credit card networks have come under
scrutiny from regulators and antitrust authorities around the world. The cost and benefits
of credit cards to network participants are discussed. Focusing on interrelated bilateral
transactions several theoretical models, have been constructed to study the implications
of several business practices of credit cards networks.
Gupta (2003) Legal and regulatory framework of credit cards asserts that the
regulations of credit card business in India is diffused and need to be streamlined.
Whereas in developed countries the law on credit card business in comprehensive and
straight forward, its Indian version requires a structural change. Hence, there is a need to
explore that various legislative premises of the inferior and unclear Indian version for
protection of interest of cardholders and healthy growth of the industry.
Bandyopadhyay (2004) in his article Credit cards look for an Ace put the light
on various issues like, major card players are issuing cards without much checking
credentials. It adds to non performing assets [NPA] levels in its portfolio but overall,
about 0.6 percent of personal consumption expenditure in India is through credit cards.
He suggested that (I) the increasing card use could be by making all utility payments
through cards by installing more electronic draft capture (ii) the government can do by
waiving the tax on credit cards which is a big disincentive for card users (iii) to bring
down the default rate, bank must set up credit bureau. This will enable banks to detect the
first sign of default in advance and sound a red alert so that prospective defaulters can be
weeded out.
Bhargava (2004) title Debit cards: A new generation plastic money analyses

that debit cards are fast catching up with the customers. A combination of factors like
ease of availability, debit-averse profile of customer and zero interest rates are propelling
the usage of Debit Cards. The study emphasizes to increase the usage of these cards, bank
will need to improve infrastructure and continues to focus an increasing installations of
point of sale [POS] in smaller cities and on the locations which are frequently used by
cardholders, and to develop new marketing programmers that educate customers on the
benefits of replacing cash with plastic.
Braunsberger (2004), The effectiveness of creditcard regulations for
vulnerable consumers. The study investigates how vulnerable consumers (i.e. College
students) might respond to the revised credit card disclosure requirement (i.e.
amendments in Truth in Lending Act) and investigates credit card knowledge of college
students. The study examine external validity issues, that is, whether urban college
students are more knowledgeable about credit cards than rural students, and whether
adult populations are more knowledge than student populations. This study further
investigates the relationship among objective and subjective knowledge and product
usage. The result shows that consumer in general are not very knowledgeable about
credit cards. In order to avoid government regulation of the industry, it is recommended
that credit card issuers become involved in educating consumers.
Easwar and Kumar (2004) asserts in the studies titled, Credit cards: on a
growth trajectory that the perception of owning credit card has changed and they are
viewed as being convenient substitute to carrying cash and also availing credit for short
period. But in the context of home country, India ranks at the bottom in terms of usage of
credit cards, when compared to China, Taiwan and Malaysia.
Humphrey (2004) Replacement of cash by cards in US consumer payments
Authors uses over the past 25 years time series data. The results shows that the share of
cash in consumer payments appears to have fallen from 0.31 in 1974 to 0.20 in 2000,
cheques replaced cash during the 1970, credit cards replaced some cheques during the
1980, while debit cards replaced both cash and cheques in the 1990s. Author feels even
though, cash is not projected to go to zero anytime.


For achieving the objectives of study, survey was conducted. For survey, personal
interviews of the housewives were undertaken. Personal interviews was selected as the
mode of survey to make the study more meaningful & so that maximum information
could be collected. For conducting the personal interviews of the housewives, a
questionnaire was made. The questionnaire was structured with open ended & close
ended questions.
The housewives interviewed on various aspects likely to have impact on the plastic
money and its uses.
Problem definition:Concept of Plastic Money and Housewives Perception Towards it.
Type of Research:This research is Descriptive in nature.
Descriptive research is used to describe something usually market characteristics,
functions behavior.

Research Plan

Research planning is the process of developing the most efficient plan for gathering the
needed information.

Data source

The major source of data is Primary but Secondary data is also used for making the

Primary data

Primary data has been collected with the help of Questionnaires.

Secondary data

The secondary data was gathered from the websites.


Questionnaire structure

For the research multiple choice type of questions were prepared to collect primary data
from the housewives.

Sampling Plan

The plan includes the following-:

Sampling units

Sampling units consist of all kind housewives.

Sample Size:
I have covered 50 Housewives in Mumbai (Wadala)
Population:- The population for the research includes housewives.
Types of Data:
I have used printing as well as secondary data. Some data is been taken from internet,
some from through questionnaire.


Q 1:- Are you aware of Plastic money?

Q 2:- If Yes, how did you come to know about plastic money?

Any Other

Bank Employee




Bank Employee
Any Other


Q. 3:- While opening an account, would you prefer the facility of plastic money?

Q 4:- Do you have?


Credit Card


Debit Card

Debit Card
Credit Card


Q 5:- Reasons for which you have opted for card?

Q 6:- How often do you use your card?





Q. 7 :- Your card belongs to which bank

Private Sector

Public Sector
Public Sector Bank
Private Sector Bank

Q. 8:- For which purpose do you use your card ?

Any Other
Online Payment



Shopping Bill


Cash Withdraw
Shopping Bill
Online Payment
Any Other

Q. 9:- Do you agree that plastic money reduces Harassment and time ?

Q. 10 :- Have you ever felt that plastic money is are much safer then holding money in Pocket ?


Q.11:- Will you see the next generation as no currency but plastic money?

Q. 12:- Your opinion about your plastic card ?


85 % of the housewives are aware of Plastic Money from which 38 % of the
housewives came to know about the Plastic Money from the TV, 28 % from
Relatives, 18 % from bank employees, 9 % from the newspaper and the rest 7 % from
other resources.
76 % of the housewives respond that they always want the facility of plastic money
with the opening of an account. 17 % respond most likely, 5 % sometimes and the rest
2 % never.
50 % have debit card, 23 % have credit card, 21 % have none and the rest 6 % have
both credit as well as debit card. For the reasons for opting card is that 31 % go for
fast transaction, 23 % for handling solutions, 19 % for safety solutions and for
convenient also, 6 % for all of above and the rest 2% for any other.
59 % have use their card monthly, 36 % use it weekly and the rest 5 % daily. Most of
the cards belong to the public banks as the public bank is government bank or may
government undertaking so its fully secured that why housewives go for the use of
plastic money in terms of using credit card and debit card.
39 % of the housewives use their card for cash withdrawal, 24 % for the shopping
bills, 18 % for the online payment, 11 % for traveling and 8 % for any other usage
regarding emergency, school fees of children, sale and buying in the market and on
the internet payment also.
48 % of the housewives use Plastic Money to reduce harassment and time, 23 % are
agree, 13 % are disagree, 11 % strongly agree and the rest 5 % are strongly disagree.
According to the 57 % of the housewives, plastic money is are much safer then
holding money in Pocket, 19 % says always, 15 % go for sometimes and the rest 9 %
for never.
31 % are strongly agree that the next generation is No Currency but Plastic Money,
22 % are agree, 20 % are strongly disagree, 15 % say sometimes and the rest 12 %
41 % of the bank housewives response that their opinion about the plastic card is
good, 29 % say average, 19 % satisfied and the rest 11 % go for poor.


Many of the respondents or housewives are aware of plastic money. Media and
friends/relatives are the main sources to know about the plastic money provided by
various banks like HDFC and State Bank of India.
When the housewives going to open the account in a bank they always want the
facility of plastic money. Most of the housewives have credit as well as debit card and
they need it for the fast transaction and handling solutions.
Most of the housewives use the card monthly and that too for cash withdrawl and
shopping purpose as according to them plastic money is are much safer then holding
money in Pocket.
Many of them consider the point that the next generation is No Currency but Plastic
Money and their opinion regarding the plastic money is good enough to promote it
for the future.
Most of the bankers expressed the view that issuance of debit cards would grow at a
faster rate:
It is still a new concept combined with the fact that there are only a few players right
Any person who has a bank account can be issued a debit card. There are few norms
to be complied with for issuance of debit cards.
In case of debit cards frauds are hardly possible, hence the banks have no problems in
issuing the debit cards.
Debit cards are more looked by banks as an incentive to increase their customer base.
The Indian psyche is credit averse especially the older generations. The so called
udhari is something that is avoided.
One of banks also put forth the fact that in credit cards there is always a problem of
recoveries which is not there in case of debit cards. The bank felt that there is more
scope for the debit card industry to grow if they are launched in a co-branded form.


Banks have to put more efforts so that every housewives will avail the facility of
plastic money
In doing this, they too have to minimize the amount charge to avail credit or debit
Banks have to provide full information to their customers for proper using and the
benefits of plastic money.
Bank customers have to come forward to understand the advantages of using
plastic money and remain free from having bulky purse in the pockets.
In countries like India, the usage of having plastic money is too low, thereby
making such consideration we have to move towards next generation of plastic
money with full understanding and consequences of plastic money.


review of literature - Shodhganga