When did plastic money take over?

Plastic money refers to the use of credit anddebit cards, which have become the norm forfinancial transactionsin the modern world. The rise ofplastic moneyhas revolutionized the way we make payments, and it is hard to imagine a world without it. But when did plastic money take over? In this article, we will explore the history of plastic money and how it has become an integral part of our daily lives.

The Emergence of Credit Cards

Credit cards were first introduced in the United States in the 1920s, primarily as a convenience for customers of large department stores. However, it was not until the 1950s thatcredit cardsgained widespread popularity. The first credit card that could be used at multiple locations was the Diners Club card, which was introduced in 1950. It was followed by the American Express card in 1958, which was the first card to offer revolving credit.

The Rise of Debit Cards

Debit cards, on the other hand, were first introduced in the 1970s, but they did not gain widespread acceptance until the 1990s. Debit cards are linked to a bank account, and the transaction amount is deducted from the account immediately. This feature made debit cards more attractive than credit cards for many people, especially those who did not want to accumulate debt.

The Advantages of Plastic Money

The popularity of plastic money can be attributed to its many advantages. Credit cards offer convenience, security, and rewards such as cashback and airline miles. Debit cards, on the other hand, offer the convenience of not having to carry cash, and they can be used for online transactions.

Tips for Using Credit Cards

While credit cards offer many benefits, it is important to use them responsibly. Here are some tips for using credit cards:

1. Pay your balance in full every month to avoid interest charges.

2. Choose a card with a low-interest rate and no annual fee.

3. Keep track of your spending to avoid overspending.

4. Use your card for purchases that you can afford to pay off.

5. Do not use your credit card to withdraw cash from an ATM as this incurs high-interest charges.

Conclusion

In conclusion, plastic money has become an integral part of our daily lives, and it is hard to imagine a world without it. The convenience, security, and rewards offered by credit and debit cards have made them the preferred method of payment for many people. However, it is important to use these cards responsibly to avoid accumulating debt and falling into financial trouble.