Commercial Bank

Commercial Banks are the most common types of banks. These are the chiefly engaged in receiving deposits, advancing loans and discounting bills. They lend money for short period against easily marketable securities. They finance internal trade, deal with credit instrument and render other numbers of services to their customers and play a vital role in the commercial development of the country.

Businessman and salaried persons are provided the facility of operating bank accounts. They settle their accounts by issuing cheques. Those commercial banks who become the member of the central bank are known as scheduled banks.

What is Charge Card?

Charge card are almost similar to credit cards but they don't have a monthly spending limit like $500, $5,000 etc. Its holder can make an unlimited number of purchases with his card, but he needs to pay back the entire balance in full each month or year as per policy.

Charge cards generally impose a fee and tack on penalties to discourage its holder from not paying back the balance. The cost of having a charge card is often significantly lower than the cost of having a credit card. For many consumers this is due to the interest related debt that can be racked up with the credit card.

What is Credit card?

It is a phenomenon that the credit card has become one of the essential needs of everyday life. People use it as they paper money. This is why it is called Plastic money as well.

Such a type of card can be defined as
"It is a particular style of card issued by an institution to its client on the basis of a special contract between the institution and the client. This card gives a tendency to its holder to purchase commodities or services on credit on behalf of the institution, from a particular space mentioned by the institution."

True credit cards have a set spending limit for example $1000, $5,000, $50,000, etc. based on the cardholder's credit rating and current income. If cardholder spends more money, his credit limit increases. If he chronically makes late payments on his monthly bills or skips payments either his limit will be reduced or his credit will be cut off, and the interest rate charged on the balance may be increased.

History of Credit Cards

The use of credit cards originated in the united states during the 1920s, when individual companies began issuing them to customers. This use increased significantly after World War 2, when veterans returned and looked forward to travel for business and pleasure. The first general purpose of credit card that could be used at a variety of stores and businesses was introduced by Diners Club, Inc., in 1950. In this system, the credit company charged cardholders an annual fee and billed them for their expenditures on a monthly or yearly basis. Another major card was established in 1958 by the American Express Company.

Later, the bank credit card system was introduced. The first national bank card plan was Bank Amricard, which was implemented in 1959 by the bank of America in California. The system was licensed in other sates starting in 1966 and was renamed Visa in 1976.

Now a day, it is generally used for purchasing items to pay for services, bills, fees, taxes etc. No doubt, the benefits of credit cards are so many that their importance and progressive role in this age of mischief cannot be denied.

Origin of Banking

Modern banking system, in practice, is spread over the whole civilized world from England. The banking system originated from the following three sources:

The Goldsmiths:
In ancient time, it was very difficult for an individual person to protect his wealth. So, some persons having the qualities of solvency, safety and safety, were trusted to keep money of the people as deposits. The depositors would be given slips as the proof of their deposits. With the reputation of gold smiths these slips were accepted by the people instead of money in transacting business. These slips were the origin of modern bank notes.

Money-Lenders:
Money lenders were those people who lend their own money to the people and earned profit in the form of interest. They were considered original bankers.

Merchants:
The merchants were considered respectable people due to good repute of dealings and strong financial background. These merchants mainly financed foreign trade by issuing slips through their agents. These slips were the origin of modern bills of exchange, bank's draft, letters of credit etc.