Unit 4 Discussion: Are Credit Cards Money – Coursework Example

Are Credit Cards Money? al Affiliation) Money is a good that acts as a circulating medium of exchange, and accepted intransactions involving the transfer of goods and services. It acts as a unit of account, a measure of value, or a means of payment. A credit card on the other hand is a plastic card that is a substitute for money. It authorizes purchase of either goods or services on credit. It has a magnetic strip issued by the bank or the business authorizing the owner to purchase goods or services on credit (Byers, 2010).
In order to maximize the benefits of Credit cards, one needs the ability to keep track of all expenses. People should sign up for transaction alerts that send text messages on the expenditure. For instance, whenever the credit card balance gets to a certain level, one should get a warning that their expenditure is rising to critical levels. In addition, when one wants to know the balance available in their account they should be able to get this information through the text messages. The text alerts are able to notify the credit card owner in case of a fraud or any unauthorized purchases. Credit card holders should use text-banking services where they get updates of their accounts on demand such as account information like total balance. In addition, they can monitor their credit cards online to track spending and cash balances. Lastly, they should break down their expenditure by category to monitor their money. This helps cut back on unnecessary costs like entertainment and have a planned budget on essential commodities only.
Developing a budget plan helps manage credit cards (Byers, 2010). An individual needs to take control of all the finances by listing all sources of income, and then list all the expenses including the fixed expenses like mortgage, rent, or car loan. Then list the expenses that vary like groceries and entertainment. This helps track on the spending pattern. Paying off debts that have high rates first is important; this is because they charge high interest. People need to have credit monitoring services to keep them informed in case of any suspicious activity in their account.
In my opinion, it is the responsibility of the credit card holder to be in charge of their finances. Individuals need to spend on what they can afford to pay. They should keep off debts whenever necessary.
It is risky to allow employees to use credit cards because they might use more than they can pay. I would not allow employees to use credit cards and would advise them to engage in cash transactions according to their budget.
Byers, A. (2010). First credit cards and credit smarts. New York, NY: Rosen Pub