Question

Identify and explain two features of a plastic money having an overdraft facility which is issued by the commercial bank to its customers.

Answer 1

1. A credit card facility is issued by the bank to its customers.
2. A credit card comes with a bank-approved credit limit. This limit defines the amount that the credit holder can spend using that card.
3. The credit amount must be paid back by the holder to the bank on the due date, which is mostly after 30 days of making the purchase.
4. The limit on the credit card is decided by the bank, depending on the customer’s credit score and credit history.
5. In its appearance, a credit card is a thin, rectangular, plastic, or metal card that can be swiped to make payments.
6. Each credit card has a grace period, during which the customer must should repay the amount borrowed from the credit card limit to the bank.