Which of the following payment instruments introduced by the banks is known as Plastic money?

The correct answer is Credit cards

Key Points

 Plastic money refers to those plastic cards which enable electronic transactions.

• Debit cards and credit cards are two major examples of plastic money.
• Credit card is issued on the basis of the cibil score/ credit score to a customer.
  • A certain amount of money is added by the issuer bank to the customer which is called the limit of that credit card.
  • This amount/limit can be used by the customer at the time of purchase.
  • On a predecided date, the customer has to pay return the used amount/limit.
  • After paying the limit is restored to the customer's credit card and it can be used again now.
• Generally, a Debit card is issued by the Bank to an account holder.
  • The account holders can withdraw the amount from the ATM machine.
  • Customers withdraw money that is deposited in their accounts.
  • There is daily and monthly limits are decided to withdraw the amount by Debit card.
  • Hence customers can not withdraw amount more than deposited in their account.

Additional Information

• A bearer cheque is a cheque by which the payment is made to the person bearing or carrying the cheque.
• Demand draft is also called DD, it is a negotiable document used to pay bank ot bank transfers.
• Gift cheque is issued by the bank for those customers who want to gift them on any occasion.