Being able to manage our finances well is a very important aspect of our day-to-day lives. You must be aware of the many different financial tools that are available to everyone around you. From debit and credit cards to savings accounts and several schemes, it has become much easier for people to gain financial security.
We belong to the digital age, which means that we can shop in physical stores as well as online. A credit card will come in handy for you if you are a frequent shopper.
There is a strong misconception about the use of credit cards in India. This is due to the strong rates of interest, and hearing about the cons from people. You might feel discouraged about applying for one. However, a credit card is not only convenient for you; it also provides numerous credit card benefits. You can get discounts, cashback, loyalty rewards, and much more.
This article will address all your concerns, and list the numerous credit card benefits that you can avail!
Advantages of having a credit card
Improve your CIBIL score
- CIBIL stands for Credit Information Bureau India Limited. It is a credit information company that calculates your credit. Every time you pay your credit card bill, the information is reported to credit card information companies. They then maintain and update the scores. Your CIBIL score can go up if you make each bill payment on time. This leads to a great credit score and credit card benefits. A good credit score is important because it is required to get approval for a loan. It is also required to get an unsecured credit card in the future. Not paying credit card bills on time will negatively impact your credit score. It will make you miss out on the credit card benefits.
Set up recurring payment plans
- A recurring payment occurs at a set interval, which can be weekly, monthly, or annually. You can set this up with a company that offers this service. For this, you have to submit the details of your card. The company will then deduct the money that they are owed on their own. You could use recurring payments to pay all your bills automatically. Electricity, water, gas, and all other bill payments can be set up as recurring payments. This will help you if you are forgetful and get late on payments. This way you can avoid late fees and penalties, which is another credit card benefit.
Buy immediately, pay later
- One of the best credit card benefits is purchasing items now and paying for them later. Suppose you see something you like in a store. But you do not have enough money in your bank account to purchase it. A credit card becomes your best friend in such a situation. You can buy the item and then, when you get your salary, pay back the bill. There is a period when you are not charged any interest on your credit card. This differs for each credit card provider. Usually, the period is 30 days, but certain card providers can extend it to fifty days.
Cashbacks, frequent flyers, and reward points
- When people see a deal that is too good to be true, they reject it outright. If you understand the tips and tricks, a credit card can help you save a lot of money in the long run. Most credit card providers have certain reward points, cashback, and air mile schemes. These are great credit card benefits to have. These benefits are based on each purchase you make with the credit card. For every one hundred rupees you spend, you might end up saving between 0.25 percent and 3.3 percent of it.
- Another great reason to apply for a credit card is the option of getting an EMI. EMI is known as “Equated Monthly Installment.” These installments need to be paid regularly within a certain time frame. If you are thinking of making an expensive purchase but do not want to use your savings for it, an EMI is the way to go. You pay monthly installments over a longer period rather than paying the full amount at once. An EMI makes it easier for you to purchase items you might need. EMIs also reduce your need to take out a personal loan to pay for necessary but expensive purchases.
- It is inherently safer to carry around a credit card than a lot of cash. You do not need to worry about losing money with your credit card. Even if you do misplace it, there is an easy way to ensure that your credit remains safe. You can call your bank and connect with their 24/7 helpline. The bank will help you block your card, and any transactions made will be canceled. Notifying your bank is of utmost importance. It should be done the second you realize that your credit card is not with you. The bank will then cancel your card and issue you a new one.
While there are some concerns regarding a credit card, the benefits surely outweigh the risks. A credit card is a financial tool that can work wonders if used correctly. It is not only convenient, but also offers several benefits. Visit Piramal Finance to learn about how you can be more financially literate.