Wednesday, September 9, 2009

Credit and debit cards

One of the most popular forms of installment credit available to consumers today comes through the credit card. Trough this encoded piece of plastic, the consumer has instant access to credit for any purchase up to a prespecified credit limit. More recently, another piece of plastic- the debit card-has made instant cash available and check cashing much easier. The growth of credit and debit cards has been truly phenomenal to date, and the future looks equally promising. Current estimate suggest that there are more than 800 million credit and debit cards in use worldwide.
in the united states today a major battle for credit-card customers is shaping up among some of that nation‘s largest banks, savings and loan associations, credit unions, and mutual savings banks. Many of these institutions have launched aggressive advertising campaigns, sending out millions of inventories to customers to join the nationwide VISA and master Charge credit-card systems. Aggressive marketing of credit cards represents an attempt to change the whole competitive climate of consumer banking in the United States. In the future a wide array of new financial services is likely to be offered through plastic credit-and debit-card programs. Such services might include consumer revolving credit lines and preauthorized borrowing, interest paid on surplus credit-card balances, optional credit repayment plans, and the payment of other household bills.
Many of these consumer-oriented financial services are already offered on a limited basis in selected markets across the United States. In the future customer will need to make fewer trips to their bank or other financial institution because transactions will be handled mainly over the telephone or through a conveniently located computer terminal, either in the home or in easily accessible public locations. The hometown financial institution will lose much of its convenience advantage for local customers. It will be nearly as convenient for the customer to maintain a checking, savings, or loan account. In short, the ticket to many, perhaps most, financial services will be a plastic credit card or debit card-and electronic processing of consumer financial date across great distances.

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