Ch. 14- Taking advantage or being taken advantage of credits cards?

Summary:

The article I read talks about the use of credit cards and the rewards from using credit cards. The use of credit cards are now very common with over 50 million Visa and Mastercards in peoples pockets its no wonder banks are so keen on giving out rewards for using their cards. With each transaction a patron makes with the credit card, the bank takes transaction fees and then their are annual fees for each card a cardholder has. So the banks are now trying to "sell" their credits card by giving rewards like air miles, and lower interest rates so people will choose to use their credit cards and make money off the transaction fees.



Connections:

This article relates to the chapter as it shows the progression of credit cards and the many uses it has accumulated over the years. It shows that the base for choosing which bank account and credit card to use has changed and it also shows what people are prioritizing and what they deem as unimportant. Also as you know that humans are very greedy people, they will try to get the best deal out of anything, and that is no difference in choosing what credit cards to use. With so many different banks and cards out there to choose from, its hard to make a decision so the banks will not only have to provide services but advertise their credit cards and make sure that they are appealing to the public. Also with the weakening economy, encouraging people to spend and travel is a very good idea to help improve the global economies so that we can get out of this recession sooner.



Reflection:

With the rewards and benefits, I think that people may be tempted to use credit cards to pay for everything they may buy. But that might not be the best thing, as the most important and liquid assets is cash, I think people should use and keep cash more as well. We can't just make every transaction on account because that means that money hasn't really been exchanged yet, so if a large amount of money owed on account the banks may not be able to cover everything. So it may go bankrupt if it can not pay off the debts of its customer, if they haven't paid the bank yet. So it can be quite dangerous, using credit cards all the time so i think people should try to use cash as often as they can.