INTRODUCTION

Plastic money is here, there & everywhere:

The concept of Buy Now, Pay Later dates back the to late 1960s & 70s with the
introduction of plastic money in the western nations. It originated because the
people wanted a convenient and rapid means of accessing their bank accounts.
Also, the exorbitant price of money changing hands between the consumer,
merchants and the banks led to the diffusion of this concept in the banking system.
For spendthrifts and habitual borrowers plastic money induces spontaneous and onthe-spur spending. But its advantages in terms of convenience, flexibility and safety
far outweigh its pitfalls. Provision for easy repayment gives the card the liquidity of
cash along with the accountability of credit card.
In the past 20 years these cards have proliferated the world market so successfully
that they have altered the face of retail banking. With the power of plastic ruling the
world, India cannot remain behind. With a slow and steady move towards scrip less
trading the country is moving towards cashless transactions.
The plastic money market is bubbling with activity with both Indian and foreign
banks vying to expand their market presence. While the foreign banks have been
hogging the limelight Indian banks are the slumbering giants. The latter have the
advantage of a large customer base, branch network along with low service
charges. These advantages need to be tapped to realize the full potential of these
banks.

OBJECTIVE
The

main purpose to serve on this topic under the Dissertation is to discover the

accurate dimensions of the Plastic Money.

As every project has its own specific purpose, my project is to: 1) Find out that how the credit card may help in the development of an economy like
ours a developing economy.
2) Find out what is required to do for a credit card market and to establish credit card as
a special security tool.

3) Find out the reasons of fear in the mind of the customers during the acceptance of
the credit cards.
4) To understand the toughness of the credit card market due to emerging competition.
5) To know the credit cards procedure, documentation and the growth of credit cards in
Indian context.
6) To know the credit cards division of the Banking Industry very closely.
7) To understand the impact of credit cards in the purchasing power of consumers.
8) To determine whether consumers are aware of credit card and its advantages.
9) To determine the consumers acceptability and likeness towards credit card.
10) To find out the features, which attract consumers towards credit cards and the
parameters, they use to compare the credit cards.

WHAT ARE CREDIT CARDS?

A Credit Card is referred to as 'plastic money'. Carrying a lot of
cash on you can be cumbersome, risky and sometimes, you run
short of it, just when you most need it. (Remember the SALE at
your favorite ready-mades store?). A Credit card is the smart
solution to these problems. It is a convenient and safe alternative
for cash.

Besides, it says things about you. Most people associate a credit

card with a prestige, which it most certainly bestows on you, but
more importantly, it says that you have taken the onus of being

responsible - to be extended credit! So, when you get yourself a

card, remember that, because your bank does!

For starter, a credit card is as good as bank behind it. A form of 'near money' these
cards are issued by commercial bank to people whose creditworthiness has been
ascertained. Instead of carrying unmanageable weds of cash, the card holder enjoy
the flexibility and safety of purchasing any thing from groceries, cosmetics, petrol to
high value items like refrigerators, television, and washing machines by using his
credit card. Banks ask for TDS certificate or income tax returns document before
enrolling a member.
Credit Card provides the card holder with authorized line of credit of some specified
amount. Such cards may be used for following purposes:

Purchase of air, rail and road tickets for traveling

For the Settlement of hotel bills.

For Cash withdrawals.

For the Settlement of club bills.

For the Payment of purchase bills.

For the Payment of insurance premium.

Refilling the fuels in vehicles.

Payment of phone, water and electricity bills.

Payment of school/ education expenses.

ADVANTAGES OF HAVING A CREDIT CARD

1. If you pay by credit card there is implicit guarantee of satisfaction because as a
customer one can stop payment.
2. If a airline ticket is booked on a credit card and especially if you are going
overseas, the travel insurance is covered, that could otherwise be a lot of money.
3. Free airfare mileage based on point system that can take you or your family to a
destination of your choice if you can accumulate points. This is quite easy as the
shopping can be done on credit card and the points are accumulated that can be
encased for gifts or travel.

4. The best part is that you can get statement of all expenses and you can keep a
track of your expenses at a glance.
5. It helps to establish a credit history and can help in getting loan if needed.
6. There are a number of innovative credit cards that help benefit the customer.
There are cards that help accumulating points towards reducing the cost of your
new car.
7. On internet it is the preferred option and you can also participate in on line
auctions if you have good credit rating.
8. You can get cash advance anywhere at so many cash outlets.
9. Some cards have your picture on it that is as good as a identification paper.
REASONS OF FEAR DURING ACCEPTANCE OF PLASTIC MONEY

1. There is a temptation to acquire more and more cards. Some have more than
their share of cards. They can loose track of payments and be in difficulty.

2. Some credit cards have conditions that may put you in difficulty if you have not
read the fine print.

3. Then there is a danger of someone can get hold of your credit card number and
misuse it.

4. There are a number of cases of double dipping done at your expense when
paying at an outlet by credit card.

5. Statics are available that the domestic violence increases after the festive
season in the credit card user societies when the credit card bills arrive.

6. Using credit card exposes one to the possibility of some companies profiling and
lobbying you based on your spending pattern. Some governments also take interest
in the spending patterns of individuals and credit card statements make their job
easier.

There are always dangers when money matters are involved but one has to live with
the necessary evil. The happy are those credit card users that pay up and take
advantage of the free credit days that the credit card companies provide.

So being a good creation and instrument of financial market it is risky too, so

there are several things to be kept in mind and people should take in using it.

TYPES OF CARDS

MasterCard MasterCard is a product of MasterCard International and along with

VISA are distributed by financial institutions around the world. Cardholders borrow
money against a line of credit and pay it back with interest if the balance is carried
over from month to month. Its products are issued by 23,000 financial institutions in
220 countries and territories. In 1998, it had almost 700 million cards in circulation,
whose users spent $650 billion in more than 16.2 million locations.

VISA Card VISA cards is a product of VISA USA and along with MasterCard is
distributed by financial institutions around the world. A VISA cardholder borrows
money against a credit line and repays the money with interest if the balance is
carried over from month to month in a revolving line of credit. Nearly 600 million
cards carry one of the VISA brands and more than 14 million locations accept VISA
cards.

Affinity Cards - A card offered by two organizations, one a lending institution, the
other a non-financial group. Schools, non-profit groups, pro wrestlers, popular
singers and airlines are among those featured on affinity cards. Usually, use of the
card entitles holders to special discounts or deals from the non-financial group.

Standard Card It is the most basic card (sans all frills) offered by issuers.

Classic Card Brand name for the standard card issued by VISA.
DEBITCARD

Introduction
Which physically resembles a credit card, and, like a credit card, is used as an
alternative to cash when making purchases. However, when purchases are made
with a debit card, the funds are withdrawn directly from the purchaser's check or
savings account at a bank.

Two different types of debit cards are in use today: online and offline. Online debit
cards use the same underlying technology as ATMs (bank machines) that dispense
cash; authentication may consist of the use of a numeric PIN (personal identification
number) known only to the cardholder. PINs can be used only where the POS (point
of sale) terminal is properly equipped; in particular, a separate keypad is needed to
allow the customer to enter his or her PIN and select the account from which funds
should be drawn. This is the only method used in some countries, particularly
Canada.
Offline debit cards carry the logotypes of, and can be used in a manner nearly
identical to, major credit cards (e.g. Visa or MasterCard). The use of a debit card in
this manner may have a daily limit, with the maximum limit being the amount of
money on deposit. A debit card used in this manner is similar to a secured credit
card.

Some POS terminals allow the user of a Visa or MasterCard debit card to choose
whether the purchase is a "credit" or "debit" purchase. In a "credit" purchase, the
user signs a charge slip (as in a traditional credit card purchase); in a "debit"
purchase, the user enters a PIN. In either case, the user's bank account is debited.

TYPES OF DEBIT CARDS

There are two types of debit cards and two types of debit card transactions:
Direct Debit Cards allow only "on-line" transactions, also called point-of-sale. An on-line
transaction works like a straight ATM transaction. It is an immediate electronic transfer
of money from your bank account to the merchants account. This requires you to enter
your Personal Identification Number (PIN) at the stores terminal. The system checks
your account to see if there is enough money to cover the purchase.

A Deferred Debit Card looks similar to a credit card, bearing a Visa or MasterCard logo,
and can be used wherever your cards brand name is displayed. It is NOT a credit card.
Rather, this card allows "off-line" transactions, as well as on-line. Off-line purchases
resemble a credit card transaction. The merchants terminal reads your card and
creates a debit against your account. However, instead of debiting your account
immediately, the transaction is stored for processing later -- usually within two to three
days. Instead of using a PIN, the customer signs a receipt as they would with a credit
card. Most off-line transactions are verified immediately to see whether there is enough
money in the account.
Regardless of the type of debit card you have, when you use it, the money is subtracted
from your bank account.

BENEFITS OF DEBIT CARDS

Obtaining a debit card is often very easy. If you qualify to open a bank account, you can
usually get a debit card (provided your bank is offering the service)
When using a debit card, one does not have to show identification papers or give out
personal information at the time of the transaction.
It frees you from carrying cash or a cheque book.
In case of international travelers, it can save you from having to stock up on travelers
cheques or cash when you travel.
Debit cards may be more readily accepted than checks, especially in other states or
countries as one need not verify the authenticity of the payment and the merchant is
assured of immediate payment.
If you return merchandise or cancel services paid for with a debit card, the transaction
will be, generally, treated as if it were made with cash or a check. Customers usually get
cash back for on-line purchases; for off-line transactions, the amount is credited to your
account.
The bother of making payments at the receipt of the credit card statement is eliminated.

In case of credit cards, delayed payments are penalized at 30% p.a. rates. This penalty
situation never arises in debit cards.
Most importantly, debit cards can be used to make smaller value payments, avoiding
the need to withdraw cash from the bank for such petty expenses. If a credit card was
used for making cash withdrawals a charge is levied and concomitantly interest is
charged on the amount such withdrawn from the day of withdrawal.
The debit card base in India in March 2000 was already at 3,00,000. Moreover the
usage figures are even more impressive. Seven out of 10 card holders use their card on
a regular basis with the average monthly spend on a debit card was Rs 1,400, which
puts total annual spends at over Rs5bn. Bare in mind that only two banks namely HDFC
Bank and Citibank, in India currently offer their customers debit cards.
Both MasterCard and Visa International have already witnessed a huge rise in their
debit card bases in the Asia-Pacific region. After 25 years in the region, MasterCard has
built up a credit card base of 80mn, whereas its debit card base, in just four years, has
touched 37mn. Visa too, in less than 18 months, built up a base of 48mn debit cards.
Drawbacks Of Debit Cards:
Unlike a credit card, debit card transactions give you no grace period. They are an
immediate, pay-now deal.
They can make balancing your account tricky if you are not fastidious about keeping
receipts and recording transactions in a timely fashion. It is easy to forget, for example,
when you pay at the gas pump with a debit card and drive off without your receipt.
Using a debit card may mean you have less protection than you would with a credit card
for goods that are never delivered, are defective or were misrepresented. But, as with
credit cards, you can dispute unauthorized charges or other mistakes within 60 days.
Fees -- the debit card could be a costly affair to have, especially when using an ATM
that is not affiliated with your bank.

REVIEWS OF PEOPLE ABOUT CREDIT CARDS

(PLASTIC MONEY)

Its plastic money you just know when you use it and being easy to carry and use, you
do not think twice before spending. Wow! Wonderful again to find that you have to make
the payment after almost 20 days after the arrival of the same and if you spend in the
beginning of the month, you end up making payments after almost 50 days.
Great:::::isn't it? I would say it would rather be cruel to take money through credit cards
from the person who does not even earn the amount, which he is now spending. If he
goes bankrupt or does not get a monthly salary, imagine the level of mental disorder the
person could go through especially when he has the entire family to handle too. Its
difficult to change a habit and using a card would then be a habit for the one who starts
using it regularly. Again in a habit you always raise the level of wrong consumption,
which is the same when you start using a card. Using a credit card could be as
dangerous as probably commencing to smoke or falling for one single female who does
not even want to know you. As compared to a credit card, the better option would be to
go for a Debit Card, where you just need to take care of the fact that you have enough
amounts in your bank account to use it. Whenever you use it.
Credit isnt your worst enemy. You are. Just like anything else in moderation is good, so
is credit. Use your discretion before you decide to pull out the plastic. If you decide to
splurge, do it within your means. All credit does is give you the leverage over your
current financial situation to spend more than you can with your own money. But the
buck (literally) stops there. Unless you have a compelling reason to buy whatever it is
you need, I would recommend going easy on your extra capital.

LIMITATION
As this project of mine is based on the financial product i.e. credit cards through I have
my full efforts to know the basic requirements of the segment but during my study I
found several things which are unanswered yet and I too think that to tap the untapped
market or segment we people will have to give the answers to that questions like

1 The customers having very less idea about the plastic money, what it is, how it works,
how it is beneficial to them so finally we can say the less awareness of this product in
between the customers.
2 Even who are using this facility most of them are afraid about the services that are
being provided by the facilitators.
3 Several has been found in recent past about the mishappening and forgery of the
cards.
4 The changing services and the interest rates are also the cause, which are
participating in customer dissatisfaction.

CONCLUSION
With respect to the secondary data collected I have reached to the following
conclusions in my project. My secondary data that

helps me to practically

analysis the data which I collected through internet and magazines especially the
reviews and critics comments about the use of plastic money specially( credit
cards and debit cards ) :

Looking at the current scenario we can well identify that the plastic money is
taking a upper trend in India due to which more and more customers getting
attracted towards it.
The study of credit card does not lead to any concrete conclusion because
people

that credit cards increase their purchasing power while the other half

were of the view that it doesnt because people have understood and realized the
fact that although they have to pay later but they have to pay from their pocket.
Thus as per the study made through the analysis it was found out that credit
cards do increase the purchasing power of the consumers but to a certain extent
because it gives them the liberty to pay later but the consumers are becoming
smarter and have understood the scenario quite well so we cannot say that it
altogether affects the buying habits because they have realized that will have to
face the financial burden later on .Since many customers are increasing and so
the number of defaulters also. Due to the increase in tendency of non
repayments the bad debts of bank keep on increasing.
To add the popularity of the card and to increase the numbers of users the banks
are more liberalized in attracting new consumers.
The media plays a very important role in attracting the customers to choose a
particular bank and its services and it can also help to retain the acquired
customers also.
Debit cards may be more readily accepted than checks, especially in other
states or countries as one need not verify the authenticity of the payment and the
merchant is assured of immediate payment.

Finely I can say that plastic money has an importance in present scenario and
most of the people want to keep money in plastic form.

**BIBLIOGRAPHY**
Websites :
Google. com
Indiainfoline.com
Timesofmoney.com
Creditreporting.com

Magazines:
Business world
India Today