Tiểu luận: ADVANTAGES AND DISADVANTAGES OF CREDITS CARDS TO THE CUSTOMER ppt

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
1
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?
2
CONTENT
I/Credit Cards: Advantages And Disadvantages
1.Advantages
One 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.
3
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.Disadvantages
Havoc 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.
4
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:
o If you lose your card or wallet, report it to your credit card
company immediately.
5

o Don't loan your credit card to anyone and only give out your
credit card information to trusted companies or Web sites.
o Check your statement closely at the end of each month to make
sure all charges are yours.
o 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.
6
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.
7
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
8