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A credit card is one of the most useful financial instruments that you can ever have. Here’s an overview of some of the most important and exciting benefits of using a credit card.
When you use a debit card, the amount gets deducted from your bank account. However, that’s not the case with a credit card. When you use a credit card to make a payment, you essentially borrow money from the card issuer. During times of emergencies when you don’t have adequate funds, you can pay for goods or services using a credit card and then repay at a later point in time.
One of the biggest benefits of a credit card is that you can purchase all your favourite products right away and pay for them later. Depending on the type of credit card you own and the date of the transaction, you can pay for your purchases anywhere from 20 to 50 days later.
With every successful and on-time repayment of your bill, you build credit history, which is a major factor that influences your credit score. The credit score is a three-digit number that represents your creditworthiness. The higher this score, the higher the likelihood of getting loans and other credit facilities at attractive rates.
With a credit card, you can purchase products and services on EMI. By converting large purchases into more affordable monthly instalments, you can reduce the impact they have on your finances. This particular feature of credit cards enhances your purchasing power by allowing you to afford products and services which would have otherwise been out of your reach.
Almost all credit cards offer rewards for using them to make payments. The rewards can be in the form of cashback or points that can be redeemed for discounts or gift vouchers. The type of rewards applicable can vary depending on the kind of credit card you own.
Every transaction that you make on your credit card is recorded and sent to you as a statement at the end of the billing cycle. This monthly statement can be used to keep an eye on your spending pattern. Additionally, you also get alerts via an SMS and an email for every individual transaction. Having such a detailed record of expenses can be helpful when it comes to managing your finances.
Some credit cards come with a card protection plan, which indemnifies you from any unauthorised or fraudulent transactions resulting from the loss of your card. However, this is only applicable if you report the loss of your card to the card issuer within a certain period.
Some of the key credit card features that are common to most cards are listed below:
Purchasing expensive gadgets or paying costly medical bills can burn a hole in your pocket. However, you can manage them easily using a credit card. With flexible EMI payment schemes, you can plan your monthly finances stress-free.
Do note that the repayment period and applicable charges vary as per the issuing bank’s policies.
Thanks to digitisation, you can apply for a credit card online and enjoy speedy approval. Opting for other credit facilities during emergencies can be time-consuming. That’s not the case with a credit card.
Simply meet the required credit card eligibility criteria and submit the relevant documents to get credit card approval.
The credit card limit varies across issuers and card types. A specific credit limit is set for you based on your credit score and debt-to-income ratio. In time and with good repayment behaviour, you can also ask for a higher credit limit.
When you need immediate funds, you can take a personal loan against your credit card. Do check the interest rate on such loans before you proceed.
While there are umpteen credit card benefits you can enjoy, a striking advantage is the freedom to withdraw cash from ATMs when required. However, credit card issuers levy additional charges for the same. Check them beforehand, so you can plan your finances accordingly.
This is yet another essential credit card feature. While you can manage all your essential transactions with a credit card, you can also save as you swipe. Apart from cashback and welcome gifts, you can get special offers from select brands and partners.
What’s more, you can use your credit card reward points to purchase specific products and services. Simply redeem these points whenever you prefer and enjoy this chief benefit of credit card usage with ease.
Most credit cards have advanced authentication and security features to ensure safe transactions. Some also allow you to enjoy contactless payments while others offer Chip and PIN security. You can also get fraud protection cover from select cards.
There are umpteen credit card benefits such as reduced cash transactions, interest-free credit period, EMI conversion facility, reward points, cashback and more.
Yes. Using a credit card affects your credit score as it helps build your credit history. Hence, it is important that you clear your credit card dues on time to protect your credit score.
Yes, one of the benefits of credit cards in India is the ability to withdraw cash from an ATM. However, certain credit card cash withdrawal charges may apply.
Just like all credit card features, welcome benefits offered by different cards tend to be different. In other words, welcome benefits depend on the lender and the card type. Cashback offers on first transactions at partner stores, e-gift vouchers, partner discounts, and complimentary flight miles are some of the most common welcome benefits. Some cards also offer free subscriptions to streaming platforms like Amazon Prime, Disney+ Hotstar, etc.