Buy Now, Pay Later Is the Success of the Credit Card Essay...

The Credit Card? The credit card has been around since the 18th century in Europe, but only to be introduced to the United Stated in 1920’s by individual firms such as hotels and department stores. The simple idea behind the introduction of credit cards is to allow people who could not afford to buy expensive items but have the ability to repay them in installment till the full cost of the items is reimbursed (Marples, 2008). The reason credit card is a success is because customer love the concept of ‘buy now, pay later’. It is very convenience because they do not have to carry a large sums of cash and there are firms offering 0% interest if they settle before a specific period. According to Central Bank of Malaysia (2014), there are 22†¦show more content†¦However those who are inconsistent in payment will be charged at maximum interest rate of 18%. Late repayment penalty is RM5 or 1.00% whichever higher on total outstanding up to a maximum of RM75. Maybank also gain when customer purchases goods or services using credit cards. When customer spend RM10 for a service or goods using credit card, card reader will recognized the customer and contact the issuer of the cards; assume Maybank. Upon confirmation, Maybank will sent RM9.80 to the merchant’s bank account. A fee of 2% is charged from the transaction and splits between Maybank and the credit card company; Visa or Mastercard. As profitable as it can be, issuing credit cards to customers also have some downsides. In the earlier stage, Maybank already have to bear costs of issuing credit cards. A group of workers is needed to constantly monitor and maintain the bank credit card portfolio. Another expenses will be the making of the card, mailing statements to customers and also setting up a system to record customer’s informations from frauds. The system is especially important to protect customer. A stolen credit cards will be risky for customers as some party might use it to conduct illegal activities besides stealing their private information (Smith, 1998). The expenses does not stop here. After the issuance, Maybank need to constantly offer rewards and special promotions in order to compete with their competitors. They launched promotions from time to time toShow MoreRelatedWho Is The Best Financial Expert?988 Words   |  4 Pageslot of stress and money problems later in life. Because of Dave Ramsey, a successful financial expert, they were able to get they money situation figured out in less than ten years. Their salary was better than most but people do not have to be rich when it boils down to finances and the cost of living as demonstrated by them. Credit cards take most of the blame when it comes to debt; they are the most common type of â€Å"loan†. Almost every American has a credit card and can easily receive one. 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