Tiểu luận ADVANTAGES AND DISADVANTAGES OF CREDITS CARDS TO THE CUSTOMER

BANKING UNIVERSITY OF HO CHO MINH CITY GRADUATE DEPARTMENT ********************** ADVANTAGES AND DISADVANTAGES OF CREDITS CARDS TO THE CUSTOMER Subject : Finance anh Banking Lecture : VŨ THỊ TUYẾT NGA Class : 11B1.1 Student : TRẦN HUỆ CHI Saturday ,May 01, 2010 PREFACE Credit cards are a risky part of banking. Banks have set this up very well in a way to profit both them and the customer. There is not a perfect thing in this world and that includes credit card handling. Most people are often terrified of using credit cards, but there is nothing in this world that does not require risk taking. The credit card has only been a terror to those who have not handled it very well and carefully enough. Just as other things, it has both advantages and disadvantages. The credit card is just another one of those services, and if it has worked for some, why not work for others? CONTENT I/Credit Cards: Advantages And Disadvantages 1.AdvantagesOne advantage of the credit card is that it is very portable and can be moved easily from place to place. This card can be placed in a handbag or a wallet without having to worry about it getting lost. The credit card is therefore a risky liquid good, like cash, that one has to be very careful of using because if you don’t write down, and keep track of everything that you spend using your card, you may eventually go into debt. An advantage of a credit card is that it allows the person to use it in different places. It may be restricted to some places, but to places where it can be used, it is very useful as it can apply to various institutions that have well established credit card to cash money systems. At times, you can even go to different countries without having to go and convert the currency. Credit cards can be used all over the world. If the bank with which the credit card is registered is well known worldwide, it can serve usefully to the user wherever they go. This shows that the credit card can serve purposely where there is an irregularity with currency exchange. Since the money is registered to a certain bank, transfers can be made carefully to suit the exchange rates from one currency to another. Though, as a user, this may not always be the case. They are also useful in carrying out business transactions for electronic funds transfer. They come in handy in ideas of doubt of what currency to be used and how, since this is a problem that can be sorted out by the company or organization, and the bank involved in issuing the credit card. 2.DisadvantagesHavoc can also be caused by these credit cards, since most of them are made using magnetic technology. These cards should be kept away from water or even other magnets since it can easily be destroyed by these things. The card should avoid being scratched at the black strip, since it is the part of the card that is most important. Credit cards do not only require physical care, but economic care is also needed. It is required that a person checks their account to be able to note for how long their credit is valid, so as to not be caught unaware of the credit running out. This economic watch-out can serve as a master skill in conserving the strength of the credit card over the period of time it is being accessed. When one goes past the limit, the charges are sometimes on top of the roof. Another problem comes as a result of the unlimited use of the credit card. The credit card can be used anywhere for all of a person’s expenses over and over. It does not give the owner details of what the remainder is in their account as they go about spending. The person can be tempted to over-use what they have without their knowledge, only to be shocked when their accounts run out of credit. These credit cards do not let the person see the utilization of the credit in their account. The money involved is only handled by the bank and the bank can take this opportunity to take advantage of the naive customer and take a little more than they should during these transactions. This puts the customer entirely at risk, since they do not know what their money is doing solidly within that account. Credit cards can also be dangerous, since they are portable, they can easily be lost. When the credit card gets lost, it is difficult to renew it. The process often requires a little patience from the customer, which is often frustrating. The credit card renewal is a difficult to prove process, if a person has truly lost their original credit card and they have to discuss the reasons as to why the renewal has to be done. To be able to transact the credit card, payments are supposed to be made to the bank directly on fixed dates and when one delays it, it  incurs heavy expenses. The charges are what usually constitute the main cost. This is argued to be where the bank profits come from mainly. It is only wiser that this is only left for those who understand its use fully! II/So what is the correct way of approaching and dealing with credit cards? 1.There are several things you can do to prevent credit card fraud: If you lose your card or wallet, report it to your credit card company immediately. Don't loan your credit card to anyone and only give out your credit card information to trusted companies or Web sites. Check your statement closely at the end of each month to make sure all charges are yours. You can find out more about protecting your personal information by visiting our Personal Safety course. 2.Credit cards can make life easier and be a great tool, but if they aren't used wisely they can become a huge financial burden. If you do decide to use credit cards, remember these simple rules: Keep track of all your purchases. Don't spend outside your budget. Pay off your balance on all of your credit cards at the end of each month. Don't loan your credit or give out your credit card information to anyone but reliable companies. skip CONCLUSION A credit card can be an asset to your lifestyle, but if not handled carefully it can become a liability, especially if you find it so convenient and easy to use that you lose control of your spending. The main advantage of having a credit card is convenience but if you're not good at budgeting and managing your finances, the over-use of credit cards can leave you with a debt that's very difficult to pay back. However before you decide to use your credit card, carefully consider all of the factors and weigh them against your personal needs and values. TABLE OF CONTENTS PREFACE…………………………………………………………………...1 CONTENT………………………………………………………………. …2 I/Credit Cards: Advantages And Disadvantages…………………………….2 II/So what is the correct way of approaching and dealing with credit cards? …………………………………………………………………………….. ..4 CONCLUSION……………………………………………………………...6