credit card

Benefits of Getting a Credit Card: Know the Best Reasons Why you Should get a Credit Card Now

Nowadays, almost everyone carries around a small piece of rectangular plastic in their wallet or bag. Yes, it’s none other than the most used plastic money, i.e., the Credit Card and Debit Card. Earlier, only a very few people used to keep a credit card. But, nowadays, using acredit card to pay for purchases has become a very common affair. People prefer credit cards more than debit cards as the advantages of using a credit card are just too considerable. 

Additionally, more banks are now offering them, making the procedure simpler and providing a wide range of options to fit every spending style and lifestyle. So, what are the advantages of owning a credit card, then? Well, in this article, we will walk you through some very significant importance and benefits of using a credit card. So, let’s begin our discussion and have a look at the great advantages of credit cards.

What exactly is a credit card?

Credit cards can be used as an easy-to-use financial tool for regular transactions like gas, groceries, and other goods and services. In times of financial emergency, credit cards can provide you with fast access to credit. Additionally, a credit card’s features, such as its rewards programme and promotional offers, might help you better manage your spending.

What is the difference between a credit and debit card?

Debit cards differ from credit cards as they are linked directly to our bank accounts, and money deductions occur from the balance of the same account. Unlike with a credit card, while using a debit card, there is no money owed following the transaction and no monthly payment or interest to pay. Additionally, unlike debit cards, credit cards give you the chance to develop credit.

The maximum amount of credit that can be used to make purchases on credit cards is known as the credit line. A person’s credit history, income, and how much of their existing available credit they are utilizing are just a few of the variables that affect the credit line. The available balance represents the amount that can be spent at any given time as purchases are made. 

What are the benefits of using a credit card?

There are a plethora of reasons to support the benefits of using a credit card. Credit cards are handy in several ways, from managing an unpredicted financial crunch to getting rewards and discounts. Therefore, we’ll make you know some of the benefits of using a credit card in the below points: 

The ability to easily access credit is a credit card’s primary benefit. You can use a credit card now and pay for your purchases later since credit cards operate on a deferred payment basis. Every time you swipe, no money is taken out of your account. Thus, your bank balance is not affected by any payment. 

You have the option to increase your credit line with credit cards. This is crucial because it enables banks to see your active credit history depending on how you use and repay your cards. Your credit card is crucial for any future loan application since banks and other financial institutions frequently use credit card usage to assess a potential loan applicant’s creditworthiness.

If you want to make a major payment and don’t want to use it from your bank account, you can always use a credit card to defer the payment. Additionally, you can pay for your money spent in equalized monthly instalments or EMI to avoid paying it off all at once and disturbing your bank account. Indeed using an EMI payment plan is more affordable than getting a personal loan to buy an expensive refrigerator or television.

The majority of credit cards are loaded with promotions and rewards. When you swipe your card, you can earn rewards points that can be redeemed for cash back, air miles, or credit toward your outstanding card balance. In order to help you save money, lenders also provide discounts on purchases made with a credit card, such as on plane tickets, vacations, or significant purchases.

It is simpler to prevent losses from fraudulent transactions when using a credit card. If your credit card is used fraudulently, you won’t lose any money; all you have to do is inform the credit card provider of the fraud and refrain from paying for erroneous purchases. To promote the use of their cards over cash or checks, credit card networks like Visa and Mastercard offer 0% liability coverage for fraudulent purchases.

The majority of credit cards come with a number of consumer protections that most consumers are unaware of, including automatic trip insurance, rental car insurance, and product warranties that may be longer than the manufacturer’s warranty.

An interest-free period, which is a time frame during which you won’t be charged interest on any outstanding credit, is a fantastic feature of credit cards. If you settle the entire sum due by the credit card bill payment date, you can obtain free, short-term credit for 45 to 60 days. Thus, you can benefit from a credit advance without paying the charges associated with an outstanding balance on your credit card.

We all know debit cards can’t be used when traveling abroad. This is where a credit card can be your ideal pick. Most of the credit cards are accepted universally and can be swiped anywhere in a foreign country without any extra charges. So, always remember to carry a credit card when traveling to a foreign country. 

How to use a credit card responsibly?

The benefits of credit cards, like those of most financial products, are best appreciated when they are used wisely. Anyone who wishes to acquire a line of credit must think carefully about how they will pay it back and how they will responsibly use their increased spending power.

Using a credit card for purchases where a timely payment of the balance is possible can be advantageous. However, suppose there is no plan to pay off the balance. In that case, it will probably keep accruing interest, lowering your purchasing power, and possibly limiting the advantages of owning a credit card. When using credit cards responsibly, it’s a good idea to avoid making impulsive purchases or buying expensive products if you know you won’t be able to pay them off in a fair amount of time.

The bottom line

Credit cards are best enjoyed by the disciplined, who can remain cognizant of their ability to pay the monthly bill (preferably in full) on or before the due date. If you already know how to use a credit card appropriately, make as many of your purchases to your credit card and just use your debit card to access ATMs. If you do, you will have an advantage over customers who pay with a debit card, cheque, cash, or cash because of the benefits, buyer protection, and value of cash in hand.

FAQs

Check your credit limit frequently to see whether you’ve used more than 40% of your available credit.

Credit cards provide additional security in the form of insurance for lost, damaged, or stolen card purchases.

Using an EMI payment plan is more affordable than getting a personal loan to pay for an expensive refrigerator or television.

Many credit card users mistakenly think the minimum payment is the total amount they must make. In reality, it is the least payment the company requires in order for you to keep using their credit facilities.

An interest-free period, is a time frame during which you won’t be charged interest on any outstanding credit, is a feature of credit cards. If you settle the entire sum due by the credit card bill payment date, you can obtain free, short-term credit for 45 to 60 days.

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