I agree that overindulgence of the plastic money has been one of the major reasons why people tend to accumulate liability. Banks should resolve to sanction credit cards only after ascertaining an individual’s financial capability and his history of settling liabilities. My essay would discuss the reasons behind people’s overuse of credit cards and steps to be taken by the Banks to regulate the same.
Firstly, individuals tend to overspend via credit cards because it doesn’t impact their bank balance. Psychologically, one examines his bank balance for his liquidity, but fails to consider his mounting bills. Secondly, people assume that future profits would pay-off their current bills. Future promises of extra income make people go overboard while using plastic money. The credit period feature plays a major a role here. For example, I spend Rs. 10, 000/- today, assuming I get bonus before my due date of payment which is 45 days later.
Meanwhile, I believe certain checks by the banks before issuing cards would establish user’s capability. Firstly, they have to scrutinize his financial history. If he has a record of being a defaulter, it would be an indication of his tendency to dodge dues and his pecuniary instability. Secondly, the Banks should investigate the source of income. In the absence of steady flow, it would establish his inability to settle bills. For example, if the bank learns that the only source of income is from winning lottery, his future ability to repay dues becomes debatable.
In conclusion, certain precautionary measures undertaken by banks would surely control the dangerous tendency using credit cards indiscriminately. Also, individuals should be educated about the drawbacks of plastic money before procuring it.
I
agree
that overindulgence of the plastic money has been one of the major reasons why
people
tend to accumulate liability.
Banks
should resolve to sanction
credit
cards
only
after ascertaining an individual’s financial capability and his history of settling liabilities. My essay would discuss the reasons behind
people’s
overuse of
credit
cards
and steps to
be taken
by the
Banks
to regulate the same.
Firstly
, individuals tend to overspend via
credit
cards
because
it doesn’t impact their
bank
balance.
Psychologically
, one examines his
bank
balance for his liquidity,
but
fails to consider his mounting bills.
Secondly
,
people
assume that future profits would pay-off their
current
bills. Future promises of extra income
make
people
go overboard while using plastic money. The
credit
period feature plays a major a role here.
For example
, I spend Rs. 10, 000/-
today
, assuming I
get
bonus
before
my due date of payment which is 45 days later.
Meanwhile, I believe certain
checks
by the
banks
before
issuing
cards
would establish user’s capability.
Firstly
, they
have to
scrutinize his financial history. If he has a record of being a defaulter, it would be an indication of his tendency to dodge dues and his pecuniary instability.
Secondly
, the
Banks
should investigate the source of income. In the absence of steady flow, it would establish his inability to settle bills.
For example
, if the
bank
learns that the
only
source of income is from winning lottery, his future ability to repay dues becomes debatable.
In conclusion
, certain precautionary measures undertaken by
banks
would
surely
control the
dangerous
tendency using
credit
cards
indiscriminately
.
Also
, individuals should
be educated
about the drawbacks of plastic money
before
procuring it.