Credit card : Asset or Liability
Credit card actually replaces the hard money in market. Before the coming of plastic money, every one relies on their present income. If possible in present salary then only purchases go on, otherwise get shifted to next month. This problem now has been solved with the plastic money. Make payments in the next month but u can purchase now. Any one can judge this plastic money is an asset or liability for a person. Let assume its an asset. How? Right now it makes payment on your behalf , because of this u can make purchases on the same day either u have money or not and for making purchases u don’t have u look at ur pocket. It means u can buy things on credit with the help of the credit cards. As more and more people buy the product more is the income of producer , better product he will serve u in the future, better will be the economy. Now the other side of the coin, is it liability for the holder. Of course! A middle class person because of having credit card in their hands, find himself king thinks that he is able to able to buy anything. He buy AC, TV, Handy cam, Digital camera, Mobile phones, Jewellery, many other products. Before Credit cards a n individual first make planning for buying these things according to priority , join money for various months and then buy one by one items. But now he buy all things together by showing credit cards and after that make installments of the payment. For this a interest has been charged by the credit card companies. And that individual is ready to pay principal and interest thereon. If u club this payment u find urself in loss. This is one thing other is, when he has to make payment in the next month, his whole month budget get upset, again his he has curb his wishes by avoiding extra expenditure on enjoyment and mostly dad says No to their child bring somewhere because last month credit card purchases make his situation bad. It means this month no buying, so producer get...
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