What Is Credit Card And Importance Of Credit Card?

In every economy there are needs, but not the resources (capital, silver) to meet them. That is why credit arises, a mechanism to provide those resources. While consumers are provided with many things, the most important side of credit is the producing part of the satisfying factors.

Thanks to credit, people, businesses, and states can have access to resources that would otherwise be difficult to obtain. The credits can incentivize the consumption of people and, in this way, activate the country’s productive system. Companies, thanks to loans like payday loans and many other types of loans, can carry out projects and investments that allow them to improve their production and income, which, ultimately, is also income for the country. To the State, the credits allow him to carry out investment social, infrastructure and other purposes to maintain the economic activity of the country at acceptable and favorable levels. However, the level of indebtedness (credits) must be maintained at acceptable levels, so that the economic stability of individuals, organizations and the country, in general, is not affected.

A credit card is a financial support that if not used correctly, can generate debts that will prevent us from paying some expenses and saving.

What Is Credit Card?

Materially, the credit card consists of a piece of plastic, whose dimensions and general characteristics have acquired absolute uniformity, due to the virtual use of technical necessity. The size of most credit cards is 85.60 x 53.98mm (33/8 x 21/8 inches).

Each instrument contains the identifications of the issuing entity and the affiliate authorized to undertake it; as well as the time period during which this instrument will remain valid. It also usually contains the signature of the legitimate bearer and a sector with electronic seats that can be perceived through appropriate instruments. These seats identify that particular card and enable the bearer to dispose of the credit that comes with presenting it, without stamping their signature.

With respect to origin, we can say that it appeared in the early twentieth century in the United States, specifically; the idea arose within the offices of the Chase Manhattan Bank, at the hands of its director, under the modality of professional card, it was hinted with its majority from around the decade of the 1940s and took dissemination from the middle of the century.

The international diffusion was the product of the employment of other nations of the cards issued in that country, and of the local establishment of branches of the issuers during the fifth and sixth decades.

It is a means of payment without effective use, with automatic financing at thirty days, without cost

Importance of the Credit Card:

Fundamentally for the progress of the economy, in every economy there are needs, but not the resources (capital, silver) to meet them. That is why credit arises, a mechanism to provide those resources. While consumers are provided with many things, the most important side of credit is in the producing part of the satisfactory factors.

The importance of credit for an economy is very large. Thanks to credit, people, businesses, and states can have access to resources that would otherwise be difficult to obtain. The credits can incentivize the consumption of people and, in this way, activate the country’s productive system. Companies, thanks to loans, can carry out projects and investments that allow them to improve their production and its income, which, ultimately, is also income for the country. To the State, the credits allow it to carry out social investment, in infrastructure and in other purposes to maintain the economic activity of the country at acceptable or favorable levels. However, the level of indebtedness (credits) must be maintained at acceptable levels, in such a way that the economic stability of individuals, companies, organizations and the country, in general, is not affected.

At present, credit is of vital importance for the economy of countries and all companies, since its use also produces, among other benefits, the following:

  • Increase in sales volumes

  • Increase in the production of goods and services, and, as a consequence, a decrease in unit costs.

  • Elevation of consumption, by allowing certain socioeconomic sectors to acquire goods and services that would not be within their reach if they were to pay them in cash.

  • Creation of more sources of work, through new companies and expansion of existing ones.

Marketing managers must carefully weigh the importance of credit in relation to the needs of the target market. For example, the purpose of credit granted to intermediary buyers may be totally different from that granted to final consumers.

Currently, credit cards have played a crucial role in contributing to the development of the economies of the most developed countries; to the extent that consumers have greater facilities for the acquisition of goods and services, demand is also growing in the different market sectors.

Other aspects that mark the importance of credit cards are the fact that they serve to acquire all kinds of mass consumer goods, becoming a significant part of the domestic budget of many households. Hence, of symbols of high economic and social category, the famous credit cards have become a more common pledge.

About RJ Frometa

Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.

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