INTRODUCTION

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

knownmethod 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. creditcards online will continue to be
used for the multiple advantages they offer us.W e r e a l i z e a l l t o o w e l l t h a t
o n l i n e c r e d i t c a r d s w o r k a s a n e p e d i e n t p a y m e n t option to pay for our
many purchases. !magine stashing money in all your pockets asagainst merely
a little plastic rectangle."dditionally, at present going around with a large quantity of
cash on you is not a wisechoice in terms of safety. #he safety issue assumes even greater
significance when youare visiting someplace far. Money is easy to spot and pick-pockets
and thieves are able touse nicked money equally easily because these funds are not
traceable. onlinecreditcarddealings however, are detectable and carry an audit trail as well.Most
times, people find using online creditcard their way out of an
otherwisehopeless situation. $everal people found themselves purchasing
airline tickets on-line,reserving a hotel room, or renting a car. #hen again,
there are times when you requiresome more ready money at once. !n these kinds of
emergency situations, you can switchto using credit by using your creditcards
online. %enerally, credit card online give ama imum of fifty days of interest
free use of your credit. &ikewise, some merchantsstate, in their product
promotion, that you have the ability to get yourself a high-
pricedarticleinstallments." c c o r d i n g l y , y o u c a n h a n d l e y o u r f i n a n c e s e f f i c i
e n t l y s o a s t o r e m i t y o u r p e r i o d i c payments and do so without any additional
charges for interest." lot of individuals look at your credit report 'which lists your
credit history and iscreated and updated using information from banks,
merchants and other creditors toevaluate you, consequently it s crucial
that your credit report is as good as possible.Potential employers, insurance
establishments, mortgage organizations, and several other institutions will attempt
to get an idea of your character by going through this factualdata. Possessing a
creditcards online and availing of it wisely will help create a positivecredit
history.#here s no need to get an ious over whether you ve adequate money on your
person or w h e t h e r y o u d o n t . o r d o y o u n e e d t o u s e u p l a r g e c h u n k s
o f y o u r t i m e w a i t i n g i n lengthy queues in a bank branch, or spend time drawing
money from an automatic teller machine when instead you can always take your
credit card wherever you go, and thattakes care of all your financial
needs.$ e v e r a l o n l i n e c r e d i t c a r d h a v e t r a v e l i n s u r a n c e ' t h a t i s , i n s u r a
n c e t o c o v e r problems associated with traveling built into them as an inherent
function. /onsequently,if you are among those that are often on the move, this feature
might be a tangible plus point. 0ven so, you must make sure to confirm if this travel
insurance provides adequatecoverage for you. !n addition, carefully go over the terms
and conditions that come withsuch insurance. Misplaced baggage is something
which is almost always taken care of with such insurance.1ou may treat your
online creditcards as an additional supplier of money whenabroad - and this
whenever you don t wish to avail of your

prepaid visa mastercard

asy o u r f i r s t s o u r c e o f f u n d s , i n o r d e r t o a v o i d p a y i n g c o m m i s s i o n o n
o u t - o f - c o u n t r y transactions. #herefore, when you find yourself strapped for money
or travelers checksyou can bank on your charge cards as a fallback option.
With such a plethora of usefulfeatures when you re under financial stress, it
is a convenience that you cannot 'rather mustn t avoid. !ndeed, online
credit card is really an essential commodity in today sglobal environment.

Keeping in mind the changing technology replacing the traditional concept of paying
not through cash but by plastic money (credit and debit cards), this research was
undertaken to study the awareness and use of plastic money among the consumers. The
topic that was hence chosen for this research is “Analysis of the use of Plastic Money:
A Boon or a Bane”. The sample was selected by the Stratified Random Sampling
Method and consisted of consumers including students, working professionals,
government officials, house makers and senior citizens. The sample size selected was
200. It was found that consumers prefer plastic money over paper money and the major
benefit that the card provides to the customers is the convenience and accessibility. The
major problem according to them is the increased transactional costs and unnecessary
formalities to procure the cards from the financial institutions. They felt that the future
of plastic money is bright and according to them, the next thing to come via technology
would be the use of digital signatures.

Collection Of Data primary::

A credit card is a small plastic card issued to users as a system of payment. It allows its
holder to buy goods and services based on the holder's promise to pay for these
goods and services. The issuer of the card grants a line of credit to the consumer or
the user) from which the user can borrow money for payment to a merchant or as a
cash advance to the user. Usage of the term "credit card" to imply a credit card
account is ametonym.

When a purchase is made the user would indicate consent to pay by signing a receipt
with a record of the card details and indicating the amount to be paid. Issuer agrees to
pay the merchant and the credit card user agrees to pay the card issuer.

The credit card can be defined as “A small plastic card that allows its holder to buy
goods and services on credit and to pay at fixed intervals through the card issuing
agency.

A credit card is a card or mechanism which enables card holder to purchase

goods, travels and dine in a hotel without making immediate payments. The holders
can use the cards to get credit from banks up to 45 days.The credit card relieves the
consumers from the botheration of carrying cash and ensures safety. It is a
 convenience of extended credit without formality. Thus credit card is a passport to,
“safety, convenience, prestige and credit.

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 laterdate.

A credit card is a payment card issued to users (cardholders) to enable the cardholder to
pay a merchant for goods and servicesbased on the cardholder's promise to the card
issuer to pay them for the amounts so paid plus the other agreed charges. [1] The card issuer
(usually a bank) creates a revolving account and grants a line of credit to the cardholder,
from which the cardholder can borrow money for payment to a merchant or as a cash
advance. In other words, credit cards combine payment services with extensions of
credit.[2] Complex fee structures in the credit card industry may limit customers' ability to
comparison shop, helping to ensure that the industry is not price-competitive and helping to
maximize industry profits. Due to concerns about this, many legislatures have regulated
credit card fees.[3]
A credit card is different from a charge card, which requires the balance to be repaid in full
each month.[4] In contrast, credit cards allow the consumers a continuing balance of debt,
subject to interest being charged. A credit card also differs from a cash card, which can be
used like currency by the owner of the card. A credit card differs from a charge card also in
that a credit card typically involves a third-party entity that pays the seller and is reimbursed
by the buyer, whereas a charge card simply defers payment by the buyer until a later date.

Secondary DATA::
A debit card (also known as a bank card or check card) is a plastic card that
provides an alternative payment method to cash when making purchases. Functionally,
it can be called an electronic cheque, as the funds are withdrawn directly from either
the bank account or from the remaining balance on the card. In some cases, the cards
are designed exclusively for use on the Internet, and so there is no physical card.
In many countries the use of debit cards has become so widespread that their
volume of use has overtaken the cheque and, in some instances, cash transactions.
Like credit cards, debit cards are used widely for telephone and Internet
purchases and, unlike credit cards, the funds are transferred immediately from the
bearer's bank account instead of having the bearer pay back the money at a later date.
 Debit cards may also allow for instant withdrawal of cash, acting as the ATM
card for withdrawing cash and as a cheque guarantee card. Merchants may also offer
cash back facilities to customers, where a customer can withdraw cash along with their
purchase.
Online debit cards require electronic authorization of every transaction and the
debits are reflected in the user’s account immediately. The transaction may be
additionally secured with the personal identification number (PIN) authentication
system and some online cards require such authentication for every transaction,
essentially becoming enhanced automatic teller machine (ATM) cards. One difficulty in
using online debit cards is the necessity of an electronic authorization device at the
point of sale (POS) and sometimes also a separate PIN pad to enter the PIN, although
this is becoming commonplace for all card transactions in many countries. Overall, the
online debit card is generally viewed as superior to the offline debit card because of its
more secure authentication system and live status, which alleviates problems with
processing lag on transactions that may only issue online debit cards. Some on-line
debit systems are using the normal authentication processes of Internet banking to
provide real-time on-line debit transactions. The most notable of these are Ideal
andPOL.
Offline debit cards have the logos of major credit cards (e.g. Visa or MasterCard)
or major debit cards (e.g. Maestro in the United Kingdom and other countries, but not
the United States) and are used at the point of sale like a credit card (with payer's
signature). This type of debit card may besubject to a daily limit, and/or a maximum
limit equal to the current/checking account balance from which it draws funds.
Transactions conducted with offline debit cards require 2–3 days to be reflected on
users’ account balances. In some countries and with some banks and merchant service
organizations, a "credit" or offline debit transaction is without cost to the purchaser
beyond the face value of the transaction, while a small fee may be charged for a "debit"
or online debit transaction (although it is often absorbed by the retailer). Other
differences are that online debit purchasers may opt to withdraw cash in addition to the
amount of the debit purchase (if the merchant supports that functionality); also, from
the merchant's standpoint, the merchant pays lower fees on online debit transaction as
compared to "credit" (offline) debittransaction.
 Presentation Of Data
The term plastic money has been used in different settings to describe a widevariety of
payment systems and technologies (Basle, 1996). “Stored-value” products aregenerally
prepaid payment instruments in which a record of funds owned by oravailable to the
consumers is stored on an electronic device in the consumer’spossessions, and the amount
of “stored value” is increased or decreased, as appropriate,whenever the consumer uses the
device to make a purchase or other transaction. Bycontrast, “access” products are those
typically involving a standard personal computer,together with appropriate software, that
allow a consumer to access conventionalpayment and banking products and services, such
as credit cards or electronic fundstransfers, through computer networks such as the internet
or through othertelecommunications links (Hanacek, 1998).
According to Basel (1998) plastic/electronic money refers to “stored value”
orprepaid payment mechanisms for executing payments via point of sale terminals,
directtransfers between two devices, or over open computer networks such as the
internet.Stored value products include “hardware” or “Card-based” mechanisms (also
called“electronic purses”), and “Software” or “network-based” mechanisms (also
called“digital cash”). Stored value cards can be “single – purpose” or “multi-purpose”.Single-
purpose card (e.g. telephone cards) are used to purchase one type of good orservices, or
products from one vendor, multi-purpose cards can be used for a variety ofpurchases from
several vendors. Also, RBI (2002) quoted European central Bank(1998) definition which
states that plastic money is an electronic store of monetaryvalue on a technical device used
for making payments to undertakings other than theissuer without necessarily involving
bank accounts in the transaction, but acting as aprepaid bearer instrument. Basle (1998)
argues that banks may participate in electronicmoney schemes as issuers, but they may also
perform other functions. Those include,distributing electronic money issued by other
entities; redeeming the proceeds ofelectronic money transactions for merchants, handling
the processing, clearing, andsettlement of electronic money transactions; and maintaining
records of transactions.
Plastic money which includes stored value card could be of three types–single–purpose
card, closed-system or limited-purpose card and general-purpose or multipurposecard. The
single-purpose card generally with a magnetic chip recording theamount of fund therein is
designed to facilitate only one type of transaction e.g.,telephone calls, public transportation,
laundry, parking facilities etc. Here, thedistinguishing point is that the issuer and the service
provider (acceptors) are identicalfor the cards. These cards are expected to substitute coins
and currency notes. Theclosed system or the limited-purpose cards are generally used in a
small number ofwell-identified points of sale within a well-identified location such as
corporate/university campus. The multi-purpose card on the other can perform variety
offunctions with several vendors viz., credit card, debit card, stored value card,identification
card, repository of personal medical information etc. These cards mayreduce demand for
currency accounts in the bank for likely reduction in transaction costs, and prudent portfolio
management.
 Observation
Following are the findings that are drawn from the study:
1. Respondents taken for this study are those who are using the plastic money in their
daily life.
2. 62% of the respondents believe that plastic money is the currency of modern India.
3. 69% of respondents own one debit card and 25% owns two debit cards.
4. People have less craze for credit card. Only 28% of the respondents have credit card.
5. Respondents mostly prefer the plastic money of SBI Bank, HDFC Bank and ICICI
Bank.
6. 34% using the cards for the last 3 years and the trend of plastic money have emerged
from the last few years.
7. Mostly people use the cards for shopping and withdrawal of money- plastic money is
mostly preferred at the time of shopping.
8. Debit card is more beneficial according to 36% respondents.
9. Debit card provide security to the cardholders.
10. 20% respondents are dissatisfied that debit card is free from fraud.
11. Mostly people agreed that debit card provide the facility of anytime access. Anytime
you can withdraw your money.
12. Credit card is convenient way to pay agreed by most of the respondents.
13. Credit card provide prestige to holders having the tie up with the famous card
companies it provide the sense of pride.
14. 30% cardholder agreed that the plastic money holders have to tackle with the problem
of insecurity.
15. Cardholders have to fulfil the unnecessary formalities while obtaining the card.
16. Plastic money has a rapid growth in the coming years.
17. The growth credit card in India is still very slow. Companies are going really hard to
increase the sale of credit cards.

CONCLUSION
In the last two years, spending pattern through plastic money has changed
drastically.Travelling, dining and jewellery are the top three purchases that Indian makes
throughcreditcards. Two years ago, it was jewellery and apparel purchases that formed the
largest chunk ofpurchases through plastic money. Fuel accounts for a very small portion of
credit cardpurchases as these are largely paid through debit cards.
Consumers were not only more open to the possibility of owning a financial card, but
werealso more than willing to use their cards to settle dues. The status symbol aspect of
owningand using cards too played its part on bringing about such robust growth over the
space of asingle year. Debit cards in particular proved immensely popular.
According to projections for the 2003-2008 period the number of financial cards
incirculation will register a compounded annual growth rate of nearly 51 percentsp
thesatisfaction of consumers has also increased. There are many ethical issues and
challenges forplastic money issuing banks/ companies. Security relating to card should be
first priority foreach bank/company.
Consumers are preferring these cards mostly for shopping online E- commerce has
given abetter way to use the plastic money.
 At last it is concluded that plastic money has a very bright future in the coming years
becauseof the increasing trend of E- commerce.
It was necessary to reconcile, in the most fundamental sense, the nature of bank, money,
and credit card; even beyond that to the essential elements of each and how they might change in a
microelectronic environment. Conclusions emerge: First money had become nothing but
guaranteed, alphanumeric data recorded in valueless paper and metal. It would eventually become
guaranteed data in the form of arranged electronics and photons which would move around the
world at the speed of light. ATM/ ATM cum Debit card is the most popular plastic money. And there
is a positive relationship between the education level and usage of the plastic money. The study also
shows that only a certain percentage of the credit card holders are unsatisfied from the services
rendered by the card issuers. Majority of the respondents’ family members are using any one of the
plastic money. To sum up, increasing acceptance of plastic money has become a source of income to
banks and facilitates the public transactions. The currency management is made easier and cost
lower. It economies the use of currency and increases the bank credit and money with the public.
The banks and the public both stand to gain by usage of plastic money. As such, plastic money is fast
catching the imagination of the people, in particular, the younger generation in a big way.

SUGGESTIONS
1. Various offers and discounts should be provided on the plastic money so that all the users
feel satisfied with their card choice.
2. The interest charges on credit cards should be reduced so that people are encouraged to
use it in regular routine.
3. More facility should be provided to the card holder in order to satisfy them completely.
4. There should be more sales executives to reinforce new customers.
5. More outlets should be provided where the cards can be easily accepted.
6. The unnecessary formalities should be reduced in order to obtain the plastic money.
7. Advertisements should be given through TV’s, magazines and hoardings to have
maximum reach because the respondents perceive these as important promotional tools.
8. The whole procedure of obtaining the plastic money needs to be authentic. Companies
should provide security to the card holders.
9. Companies should reduce the amount of the annual fee charged on the cards.
10. In India the rate of interest charged to credit cards is between rate 10 percentage to 20
percentage, in foreign countries it is only 3 percentage so by reducing the interest rate of
credit cards, can get more users of credit card. Proper care must be given while using credit
cards because it might higher debt responsibilities to the user. Proper using of the card will
provide many enjoyable facilities to the users and even user can purchase the goods
without paying any money through reward points.
11. Banks need to focus more on activation of plastic money, since it is a critical step
towards usage. Banks may take out bound calls to encourage activation and enhanced usage
of money.
3. Before providing a card, customer must be made aware of the proper usage of the plastic
money.
4. Proper implementation of machine must be done otherwise it is a bane as banks may be
caught in fraud traps.
5. Every individual becomes an account holder as part of the financial inclusion, if the
providing of plastic money also give equal priority by the banks, the monetary transactions
can be made simpler through banks.
 REFERENCES
 Kothari C.R, “Research Methodology : Research and Techniques”; VishwaPrakshan,
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 E.gordan and Natrajan, Financial Services, Himalaya Publishing House, Mumbai. 5th
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 College Student using the Credit Card
 Smart card based Electronics Commerce characteristics and Roles
 Credit card and Debit cards : What new ? Where to ?
 Competition and Credit and Debit card Interchange Fees
 Theory of Credit card Networks: A survey of Literature
 An introduction to the economics of payment card networks
 Ethical Issues and Challenges
www.rbi.gov.in
www.federalreserve.gov
www.india.gov.in
www.paypal.com
www.google.com
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