Advantages and disadvantages

Originally, precious and semi-precious metals were made into coins and were used to negotiate and settle trades. Banknotes offer an alternative bearer form of money, but the advantages and disadvantages between the two forms of bearer money are complex and so in different circumstances the overall advantage can lie with either form.

The costs of using bearer money include:

1. Manufacturing or issue costs. Coins are produced by industrial manufacturing methods that process the precious or semi-precious metals, and require additions of alloy for hardness and wear resistance. By contrast bank notes are printed paper (or polymer), and typically have a higher cost of issue, especially in larger denominations, compared to coin of the same value.

1. Wear costs. Banknotes lose economic value by wear, since, even if they are in poor condition, they are still a legally valid claim on the issuing bank. However, banks of issue do have to pay the cost of replacing banknotes in poor condition and paper notes wear out much faster than coins.

1. Cost of transport. Coins can be expensive to transport for high value transactions, but banknotes can be issued in large denominations that are lighter than the equivalent value in coins.

1. Cost of acceptance. Coins can be checked for authenticity by weighing and other forms of examination and testing. These costs can be significant, but good quality coin design and manufacturing can help reduce these costs. Banknotes also have an acceptance cost, the costs of checking the banknote's security features and confirming acceptability of the issuing bank.

1. Security. Counterfeiting paper notes is easier than forging coins,^{[citation needed]} especially true given the proliferation of color photocopiers and computer image scanners. Numerous banks and nations have incorporated many types of countermeasures in order to keep the money secure.

1. Discounting. Before national currencies and efficient clearing houses, banknotes were only redeemable at face value at the issuing bank. Even a branch bank could discount notes of other branches of the same bank. The discounts usually increased with distance from the issuing bank. The discount also depended on the perceived safety of the bank. When banks failed the notes were worthless.^[4] The problem of discounting within a country does not exist with national currencies; however, under floating exchange rates currencies are valued relative to one another in the foreign exchange market.

The different disadvantages between coins and banknotes imply that there may be an ongoing role for both forms of bearer money, each being used where its advantages outweigh its disadvantages.

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Banknote

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Banknotes with a face value of 5000 of different currencies.

A banknote (often known as a bill, paper money or simply a note) is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money. With the exception of non-circulating high-value or precious metal commemorative issues, coins are used for lower valued monetary units, while banknotes are used for higher values.
The banknote was first developed in China during the Tang and Song dynasties, starting in the 7th century. Its roots were in merchant receipts of deposit during the Tang Dynasty (618–907), as merchants and wholesalers desired to avoid the heavy bulk of copper coinage in large commercial transactions.^[1][2][3] During the Yuan Dynasty, banknotes were adopted by the Mongol Empire. In Europe, the concept of banknotes was first introduced during the 14th century, with proper banknotes appearing in the 17th century.

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Rubber band wallet

The rubber band wallet

The rubber band wallet is exactly what the description says: a rubber band used to secure cards or cash. Several companies have commercialized the rubber band wallet by adding ornamentation or changing the dimension of a traditional rubber band to work more effectively with credit cards and currency. The rubber band wallet has limited durability and is prone to collect grime, which has given rise to alternatives.

Elastic wallet band

An elastic wallet band

The elastic wallet band is a variation of the rubber band wallet. An elastic wallet band utilizes fabric, rather than straight rubber, to secure the cards or currency. Several variations of this product exist; some integrate rubber on the inside to achieve the gripping properties of a traditional rubber band and others utilize multiple fabric bands to separate currency from cards.

Swallet

The swallet is a combination rubber band and neoprene pouch used to secure a few cards and currency.

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Credit card

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Personal Finance
Credit and debit Pawnbroker Student loan
Employment contract
Salary Wage Employee stock option Employee benefit Direct deposit
Retirement
Pension Defined benefit Defined contribution Social security Business plan Corporate action
Personal budget
Financial planner Financial adviser Financial independence Financial renovator Estate planning
See also
Banks and credit unions Cooperatives
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Banking in the United States

Monetary policy The Federal Reserve System

Regulation

Lending Credit card

Deposit accounts Savings account Checking account Money market account Certificate of deposit

Deposit account insurance FDIC and NCUA

Electronic funds transfer (EFT) ATM card Debit card ACH Bill payment EBT Wire transfer

Check Clearing System Checks Substitute checks • Check 21 Act

Types of bank charter Credit union Federal savings bank Federal savings association National bank

v t e

"Smart card" credit card with embedded microchip

An example of the front in a typical credit card:

1. Issuing bank logo
2. EMV chip on "smart cards"
3. Hologram
4. Credit card number
5. Card brand logo
6. Expiration Date
7. Card Holder Name
8. contactless chip

An example of the reverse side of a typical credit card:

1. Magnetic Stripe
2. Signature Strip
3. Card Security Code

A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services.^[1] The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.
A credit card is different from a charge card: a charge card requires the balance to be paid in full each month.^[2] In contrast, credit cards allow the consumers a continuing balance of debt, subject to interest being charged. A credit card also differs from a cash card, which can be used like currency by the owner of the card. Most credit cards are issued by banks or credit unions, and are the shape and size specified by the ISO/IEC 7810 standard as ID-1. This is defined as 85.60 × 53.98 mm (3³/₈ × 2¹/₈ in) in size.^[3]

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Contemporary examples

A wallet band of elastic fabric

Wallets are usually designed to hold banknotes and credit cards and fit into a pocket (or handbag). Small cases for securing banknotes which do not have space for credit cards or identification cards may be classified as money clips.

• Breast wallet (also called a "secretary wallet"): a wallet in which the banknotes are not folded. They are intended for men's breast pocket in a jacket, or for a handbag. Breast wallets will often hold cheques and other monetary documents as they are too large for storage in a pants pocket.
• Bi-fold wallet: a type of wallet in which the banknotes are folded over once. This has become the "standard" wallet^{[citation needed]}. Credit cards and identification cards may be stored horizontally or vertically.
• Tri-fold wallet: a wallet with two folds, in which credit cards are generally stored vertically.
• Front pocket wallet (or money clip): a case with no currency compartment and very few pockets for cards. Usually banknotes are folded and held to the wallet with a metal clip.
• Long wallet: a larger wallet usually worn with jeans, fastened by a chain, strap, or leather rein. Bills are held flat, and long wallets typically have a coin purse. Popularized by bikers to secure their wallets while riding a motorcycle, smaller chained wallets became popular in 1970s-80s Punk fashion and in the early 1990s with the grunge fashion movement as well as Heavy metal fashion. Long wallets are popular with men in cash-based countries like Japan and often reflect Native American aesthetic influence.
• Wallet band a type of wallet that uses a continuous elastic band, made of fabric or rubber, to secure cards and/or cash. Wallet bands have become increasingly more popular as a way to reduce the bulk of a traditional wallet.
• Wrist wallet: a type of wallet that can be secured to the wrist, to keep one's hands free.
• Travel wallet: used by travellers to hold essential documentation together, such as passports, tickets, boarding passes, foreign currency, travellers cheques, itinerary, travel insurance, hotel booking information, and other similar items.
• ID holder: Thin nylon or leather cases with plastic see-through compartments designed to hold an ID card. Usually worn around the neck, many have extra pockets for holding small items, hence they also function as wallets.
• Jimi: minimalist wallet constructed of hard plastic.
• Shoewallet: a small pouch attached to a shoe to be used as a wallet designed primarily for people exercising
• Digital wallet: A computer file for maintaining digital currency.
• "Side by side wallet" Divides the contents into two stacks instead of one, so it's half as thick. May be made of very thin fabric. Patented.

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History

The word "wallet" has been in use since the late fourteenth century to refer to a bag or a knapsack for carrying articles. The word may derive from Proto-Germanic.^[1] The ancient Greek word kibisis, said to describe the sack carried by the god Hermes and the sack in which the mythical hero Perseus carried the decapitated head of the monster Medusa, has been typically translated as "wallet".^[2][3] Usage of the term "wallet" in its modern meaning of "flat case for carrying paper currency" in American English dates to 1834 but this meaning was one of many in the 19th century and early 20th century.^[1]

Aleutian Wallet for carrying tackle.

Ancient Greece

The classicist A. Y. Campbell set out to answer the question, "What,is in ancient literature, are the uses of a wallet?" He deduced, as a Theocritean scholar, that "the wallet was the poor man's portable larder; or, poverty apart, it was a thing that you stocked with provisions."^[4] He found that sometimes a man may be eating out of it directly but the most characteristic references allude to its being "replenished as a store", not in the manner of a lunch basket but more as a survival pack.

The Renaissance

As metals became increasingly used as currencies, wallets began taking shape to include coins, and in some cases, statements of accounts.
In recounting the life of the Elizabethan merchant, John Frampton, Lawrence C. Wroth describes the merchant as, "a young English-man of twenty-five years, decently dressed, ..., wearing a sword, and carrying fixed to his belt something he called a 'bowgett' (or budget), that is, a leathern pouch or wallet in which he carried his cash, his book of accounts, and small articles of daily necessity".^[5]

19th century

In addition to money or currency, a wallet would also be used for carrying dried meat, victuals, "treasures", and "things not to be exposed". It was considered "semi-civilized" in 19th century America to carry one's wallet on one's belt. Ironically, at this time, carrying goods or a wallet in one's pocket was considered uncivilized and uncommon.^[6]
In Spain, a wallet was a case for smoking paraphernalia: "Every man would carry a small sheaf of white paper in addition to a small leather wallet which would contain a flint and steel along with a small quantity of so-called yesca, being a dried vegetable fibre which a spark would instantly ignite."^[7]

Present day

The modern bi-fold wallet with multiple "card slots" became standardized in the early 1950s with the introduction of the first credit cards. Some innovations include the introduction of the velcro-closure wallet in the 1970s. Pocket-sized wallets remain extremely popular to this day.

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Loyalty program

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Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior — behavior which is potentially beneficial to the firm.^[1]

Various loyalty cards

In marketing generally and in retailing more specifically, a loyalty card, rewards card, points card, advantage card, or club card is a plastic or paper card, visually similar to a credit card or debit card, that identifies the card holder as a member in a loyalty program.^[2] Loyalty cards are a system of the loyalty business model. In the United Kingdom it is typically called a loyalty card, in Canada a rewards card or a points card, and in the United States either a discount card, a club card or a rewards card. Cards typically have a barcode or magstripe that can be easily scanned, and some are even chip cards. Small keyring cards (also known as keytags) which serve as key fobs are often used for convenience in carrying and ease of access.
By presenting the card, the purchaser is typically entitled to either a discount on the current purchase, or an allotment of points that can be used for future purchases. Hence, the card is the visible means of implementing a type of what economists call a two-part tariff.
Application forms usually entail agreements by the store concerning customer privacy, typically non-disclosure (by the store) of non-aggregate data about customers. The store — one might expect — uses aggregate data internally (and sometimes externally) as part of its marketing research. These cards can be used to determine, for example, a given customer's favorite brand of beer, or whether he or she is a vegetarian.
Where a customer has provided sufficient identifying information, the loyalty card may also be used to access such information to expedite verification during receipt of cheques or dispensing of medical prescription preparations, or for other membership privileges (e.g., access to a club lounge in airports, using a frequent flyer card).

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