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The Credit Card Economy

By: pangsiyan

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If you have a credit card, you can buy a car, eat a dinner, take a trip, and even get a haircut by charging the cost to your account. In this way you can pay for purchases a month or two later, without any extra charge. Or you may choose to spread out your payments over several months and pay only part of the total amount each month. If you do this, the credit card company or the bank who sponsors the credit card will add a small service charge to your total bill. This is very convenient for the customer. With the credit card in your wallet or purse, you don't have to carry much cash. This saves your trips to the bank to cash checks or withdraw cash. Also, if you carry credit cards instead of a lot of cash, you don't have to be concerned about losing your money through carelessness or theft. The card user only has to worry about paying the final bill. This of course can be a problem if you charge more than you can pay for.

Credit cards are a big business, Americans spend $ 16 billion a year on cards and there are already 590 million of them in circulation. Many banks sponsor their own credit companies and issue cards free to their customers. Other credit companies charge their members annual dues. The stores that accept credit cards must pay a small fee to the credit card company—a percentage of purchase price of the merchandise or service. In return, the credit card company promptly pays the store for the merchandise or service. Credit card companies make a profit from the fees they charge the store and also from the fees collected from customers who pay for their charges in monthly installments. However, credit card companies sometimes have problems collecting overdue payments from unreliable customers. Also, the USL of Molen. lost, or counterfeit' credit cards by cnmmals has become a big headache for the credit card company that is responsible for the goods and services illegally charged to customers' account'.

Yet. in many ways, the big loser in the credii eard system is not the credit card company, the store, or the card user, but rather the general customer. The store makes up for the fees it pays to the credit card company by increasing prices for goods and services. Stores may have more sales if they accept cards, hut the added cost to the store with credit cards are accepted instead of cash, is actually passed on to all customer1- m higher price's. In this way the cash customer suffer.-, for the convenience the credit card customer enjoys.

Many feel that it will only be a mailer of time before credit cards completely replace cash and checks for both individuals and businesses. In such a credit card economy there would be only one "super credit-card bank-company" and each individual would be given his or her card. Each person's Social Security number would be used as the card number. Firms would use their Federal identification number. Thus, every individual would be able to pay for everything by credit card newspapers- cab fares, donations, tools, theater admissions, tuition, children's allowances, everything. All salary payments would lie credited lo each individual's account with the "super-credit card-hank company" which would pay one s bills, deduct state and federal taxes, and deposit what's left if anything -into a savings account. ' Just think of the convenience of getting rid of cash and checks and even eliminating loose change.

Article Source: http://depositarticles.com/

Drive from: many mobile phones. If you have a credit card, you can buy a car, eat a dinner, take a trip, and even get a haircut by charging the cost to your account. Want to know more click free articles.

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