With upturn of commercial activities, one concept that has also taken an upturn is the concept of ‘plastic money’. Plastic money includes credit cards and debit cards, which give their holder some degree of purchasing power. While debit cards amount to purchasing power equal to your bank balance only, the credit cards leave you rather unbind. They give you the power to spend that does not really belong to you, that is, on credit. And it is precisely the trick behind cut-throat promotion of credit cards by various financial institutions.
Advantages of using business credit cards
Gradually, a typical credit card consumer has become wary of the disadvantages of credit cards, and prefers to use credit cards more judiciously. This tendency has enticed the credit card companies to further diversify their credit card users and got them busy in wooing students as their new customers. In fact, student credit cards are better profit centers to credit card companies more than the typical consumers.
As students are void of responsibilities and rather immature, they take credit cards simply as more purchasing power, without worrying about the payment part. Researches reveal that students generally make use of cash advances more than any other user group. They tend to use credit cards too often to spend on petty expenses like petrol, food, movie tickets or other items that inadvertently renders them running over the credit card limit. Students have also been observed to be more careless about the payment of credit card bills, which they tend to postpone due to shortage of funds or simply because they place it in low priority bracket. The higher priority for them may be buying a costly gift for a friend or throwing a get together party. Whatever it may be, the inevitable outcome is build up of a balance that cannot easily be paid off. And this is precisely what the credit card companies look forward to. The companies know that where the students will fall behind in payments, their parents will pitch in to clear the debts.
