Why Everyone Should Have At Least One Credit Card

Discover how having at least one credit card can improve your financial flexibility, build your credit history, and unlock rewards while protecting your purchases. 

In today’s increasingly digital world, you may wonder if it is good to have a credit card. The simple answer is yes, having a credit card can be a valuable part of your financial toolkit when used responsibly. This article explains why everyone should consider owning at least one credit card.

Owning a credit card opens the door to a range of valuable financial benefits, from rewards and purchase protection to building your credit and handling unexpected expenses with ease. These are all good reasons to have a credit card in today’s financial terrain:

• Easy and Convenient Payments

A credit card lets you pay for purchases online or in‑store without carrying cash or worrying about having enough money in your bank account today.

• Rewards and Cashback

Most credit cards offer reward points or cashback on eligible spends. These benefits can be redeemed for statement credits, vouchers, travel or gift cards, helping you save on everyday expenses.

• Builds Credit History

Responsible use of a credit card (paying bills on time and keeping utilisation low) helps build a positive credit record. This can make future credit approvals like loans easier and potentially cheaper.

• Purchase Protection and Insurance

Many cards include protection on purchases against theft or damage and additional insurance benefits such as travel delay or lost baggage coverage.

• Emergency Financial Support

A credit card provides instant access to funds during unforeseen situations, offering a financial safety net until your next salary arrives.

• Detailed Spending Insights

Monthly credit card statements itemise all transactions, helping you track where your money goes and supporting smarter budgeting and financial planning.

• Exclusive Discounts and Offers

Cardholders often get special deals for shopping, dining, travel and entertainment that are not available to cash or debit users, adding extra value to your spending.

Credit cards aren’t just spending tools, they play a key role in establishing and improving your credit profile in India. A strong credit score makes you more eligible for loans and financial products, and credit cards help you demonstrate credit discipline to lenders.

Here’s how owning and using a credit card responsibly can help build your credit score:

• Payment History Matters: Your record of paying credit card bills on time is a major factor in your credit score. On‑time payments show lenders you repay borrowed money promptly, which strengthens your credit profile.
  
• Credit Utilisation Ratio: This measures how much of your available credit you use. Keeping your utilisation low, ideally below 30%, shows you manage credit wisely and can boost your score.
  
• Regular Use Builds History: Using your credit card regularly for small expenses and paying off the balance each month creates a positive credit history. This ongoing activity signals financial responsibility.
  
• Length of Credit History: The longer you have an active, well‑managed credit card account, the stronger your credit history appears to lenders. Older accounts can help improve your score over time.
  
• Credit Mix – A credit card adds to your mix of credit types. Having different forms of credit, such as credit cards alongside other loans, can positively influence your overall credit score.
  
• Lower Risk to Lenders: Responsible credit card use and timely repayments reduce perceived risk for lenders, making it easier for you to get loans, credit limit increases, and better interest rates

A key advantage of owning a credit card is the financial buffer it provides when you face unforeseen expenses. In urgent situations like medical bills, emergency travel or sudden home repairs, a credit card gives you immediate access to funds when other resources may not be readily available.

You can choose to pay the minimum due or full balance depending on your monthly cash flow, offering breathing space until your next paycheck. Many cards also allow you to convert large emergency expenses into EMIs, helping you spread the cost over several months without straining your budget. Keeping a dedicated credit card for emergencies ensures you don’t deplete your savings or long‑term investments abruptly. When used wisely, this financial flexibility enhances your stability and lets you handle urgent costs with more confidence and less stress.

Credit cards go well beyond just being a payment tool. They come with reward programmes and value‑added benefits that help you save money and enjoy lifestyle perks every time you use them. Here’s how these programmes benefit you in practical terms:

• Earn Reward Points on Everyday Spending: Most credit cards let you accumulate points every time you pay using your card. You earn more points on categories like travel, dining or groceries, helping you get added value from routine expenses.
  
• Cashback on Transactions: Some cards offer cashback directly credited to your statement or account. This can be a flat percentage on all spends or enhanced rates on specific categories like online shopping and utilities.
  
• Redeem Points for Travel and Shopping: Accumulated points can often be redeemed for flight tickets, hotel bookings, merchandise, vouchers or statement credits, extending your spending power further.
  
• Welcome and Milestone Bonuses – Many credit cards reward you with bonus points or cashback when you first activate the card or after you reach certain spending thresholds, giving you extra value early on.
  
• Airport Lounge Access and Travel Perks: Premium and travel‑focused credit cards offer free and discounted airport lounge visits, travel discounts, priority services and even lower foreign‑exchange markup fees when using the card abroad.
  
• Partner Offers and Merchant Discounts: Cardholders often get exclusive deals on e‑commerce sites, dining platforms and lifestyle brands, including limited‑time sales and partner‑funded discounts.
  
• Discounts on Fees and Services: Some cards offer waivers on fuel surcharge, telecommunication bill payments, cinema tickets, or annual fee rebates based on yearly spending, adding indirect savings.

Credit cards can provide more than just a way to pay, such as built‑in protection and insurance benefits that help safeguard your finances and offer peace of mind when you spend. These features vary by card and issuer, but when active, they can help protect against losses due to theft, damage, travel issues and more.

Here’s how credit cards can provide valuable protection and insurance:

• Purchase Protection for Recent Buys: Many cards automatically protect eligible purchases made with the card against theft, accidental damage or loss within a set period after purchase. This means you could be reimbursed or compensated for covered items.
  
• Coverage for Fire or Burglary: Some credit card protection plans include coverage against fire, burglary or allied perils for goods bought with your card, reducing your out‑of‑pocket costs when unexpected loss occurs at home.
  
• Travel Insurance Benefits: Certain credit cards offer travel‑related insurance when you book flights or trips using the card. This can include trip cancellation or interruption coverage, lost or delayed baggage protection, medical emergency assistance abroad and more.
  
• Lost Card Liability Protection: If your credit card is lost or stolen, liability protection can shield you from unauthorised transactions made before you report the loss to your bank or card issuer.
  
• Personal Accident or Air Accident Cover: Higher‑tier and premium cards may include accident insurance, which can provide financial support in the event of serious injury or death during travel or other covered incidents.
  
• Fraud and Online Transaction Safeguards: Credit card issuers often monitor for suspicious activity and offer fraud protection and dispute resolution services if unauthorised charges appear on your account.

Owning a credit card helps you track and plan your spending better. Each transaction is itemised in monthly statements, making it easier to analyse where your money goes. You can use this information to set monthly budgets or identify patterns of unnecessary spending. Some cards also offer tools and alerts that help you monitor your expenses in real time.

Credit cardholders often enjoy deals that are unavailable to cash or debit users. These include partner discounts at e‑commerce sites, dining offers, fuel surcharge waivers, festive deals and bank‑specific promotions. These exclusive offers can make a noticeable difference in your overall spending, especially during sales or holiday seasons. 

While a credit card is mostly good to have, it all boils down to how you use it, responsible habits make all the difference. Always pay your credit card bill by the due date to avoid interest and late fees. Keep your credit utilisation low, ideally below 30% of your limit, to maintain a healthy credit score. 

Monitor your transactions regularly and avoid withdrawing cash from your card, as it attracts higher interest and fees. Setting up auto‑pay and reminders can prevent missed payments. Owning a credit card can be a powerful financial tool when used wisely. It offers convenience, rewards, flexibility and builds your creditworthiness.