Credit Card: Expensive Mode of Exchange

Economic advancement goes hand and hand with technological advancement. Human civilizations have invented several ways of facilitating the different economic activities. Before money was invented, people simply exchanged goods through barter system. A camel maybe traded with four sheep. Two horses maybe traded with two cows. Silk maybe traded with pearls. Fruits maybe traded with vegetables. The items that are traded do not have fixed values. The trade value of an item will depend on the agreement of the trading parties. Indeed, barter method is very inefficient. People then realized that a medium of exchange is necessary to have a standard agreement. This medium of exchange should be easily divided into subunits to facilitate value precision.

Money was invented. Some civilizations like the Roman Republic used salt as mode of exchange. Hence, the word salary was derived from the Latin salarium. Only later on that coin minting was developed. Coins made of gold or silver were minted by imperial or monarchial governments as mode of exchange. It was the Chinese civilization that first used paper money. The sophistication of modern civilization has demanded more convenient mode of exchange. Credit card is one mode of exchange that does not involve real cash. Credit card has the advantage of being convenient. On the other hand, credit card is still a liability because of the interest you need to pay. Wise financial planning involve eliminating debt. Credit card is a form of debt.