Chapter 14, Problem 9AA

To determine

To evaluate that can be used in alternative to money.

Explanation of Solution

Alternative payment methods for a payment can be other than cash. Alternative payment options (AMOP) include purchases made with a credit or debit card, points for loyalty schemes, etc.

A credit card is supplied by a financial institution which gives its owner the option of borrowing money for purchases from the issuer. Their costs are going to add up quickly. Not only is it more durable, it also provides more security than cash alternatives, such as card payments and checks, as money is not automatically taken out of the account. Although many people use their credit cards to buy products and services, the credit card itself is not money. In the other hand, the debit card immediately withdraws money from the checkable account. It is used to purchase something it transfers money directly from the bank account to the account of the grocery store, retail store, gas station etc. it is similar to money. It had become increasingly popular in the United States. The advantage is that it avoids overdraft fees because people cannot withdraw more than they have I their checking accounts.

Economics Concept Introduction

Introduction: A credit card is issued by a financial institution which gives its owner the option of borrowing money for purchases from the issuer. Their expenses will easily add up. It is not only more robust, but also has more protection than cash substitutes, such as debit and credit cards and checks, since the money is not immediately taken out of the account.