The basis for emergence of credit money is formed by payment function of money. It influenced development of financial and banking systems, and emergence of credit money became a result of such development. Let's note that history of credit money is difficult. The first credit money appeared along with gold, and in process of development forced out gold money from use.
Credit money is certain obligations which it is necessary to observe in previously established periods, usually they (obligations) are confirmed with securities. In fact, it is symbolical money, guarantees of the state which are regulated by the law are necessary for their productive functioning.
Types of credit money
From the moment of emergence of credit money, their evolution took place a way from the simple receipt to electronic money. At the moment there are following types of credit money:
- The bill – the written obligation according to which the debt is paid at the scheduled time.
- The banknote is money which has the right to release only the central bank of the state.
- The check is the document containing the order of the owner of the bank account for payment of the sum specified in it.
- Electronic money is a form of monetary circulation in information networks (Internet).
- Credit cards - they are an electronic monetary instrument.
Development of credit money and the system of electronic payments allowed present economy to become more elastic. Today modern credit money is a basic element of world economy, tells the specific weight of the sums of non-cash operations which are performed by means of credit cards about it. This indicator grows very quickly.
Role of credit money
One of the main laws of economy speaks that money has to make money, i.e. be in constant and continuous circulation. Timely creation of credit money by banks expanded possibilities of people to participate in money turnover, and thanks to different types of credit money there was an opportunity to carry out the bigger number of banking operations. From the moment of emergence of money per se they began to change at once, evolution of credit money which probably shortly will give new opportunities for non-cash payment also does not stand still.
Features of credit money
First of all, it is worth mentioning about difference of paper money from credit: credit money significantly reduces distribution costs, accelerates money turnover and gives the chance to carry out non-cash payments. Money on credit allows not to address every time to bank for commission of ordinary purchases or fee. However and paper money does not lose the positions. Because they are used by the population for shopping, and in the conditions of crisis most of businessmen seeks to have cash, but not credit money, besides in the market it is heavy to control cash and their turn that is often used for evasion from taxes. Credit and paper money is constantly interchanged the position therefore at the moment existence of one look without another is impossible.
Now we will allocate forms of credit money which depend on many factors. It both the economic system of the countries, and a banking computerization, and a credit system – in the different countries they can strongly differ. The most common forms: bills, checks, wire transfers, certificates, payment orders.
In modern economic conditions it is the most favorable to have and use all types of money that will provide comfort of everyday life.
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