Finance

6 Benefits Of Using Credit Card

When it comes to balancing your last-minute expenses, credit cards are a secure bet. They are a financial product that lets you to borrow funds from both banks and non-banking entities up to a pre-approved amount to help you manage your money. Many people regard it as a liability or a means of amassing debt. However, when used with prudence, the benefits will outweigh the disadvantages.

Credit cards also aid in the improvement of your credit score (CIBIL score). When we don’t have the funds available right away, it can also be a valuable tool for purchasing large-ticket items like televisions, vacation packages, and jewelry.

You can use your online credit card for transactions thanks to the proliferation of mobile apps. You’re an easy target for burglars if you stroll out the front door with wads of cash. In an age of digital wallets, carrying cash isn’t ideal. A credit or debit card would be a better option. Aside from the convenience of transactions, there are several advantages of possessing one:

  • Helps build your credit score
  • Earn reward points on transactions with a credit card
  • Increases your purchasing power
  • Avail an emergency personal loan
  • Convenient repayment window
  • Hassle-free EMI conversions

Helps build your credit score

You’ll need a credit score if you wish to borrow money because it’s based on your financial activity history. These ratings are influenced by your credit card history. Using your credit card responsibly is good to your financial health on multiple levels. To begin, practise responsible credit usage, which is not exceeding 40% of your credit limit and paying your payments on time and in full.

Earn reward points on transactions with a credit card

Many financial organizations reward their customers with Rewards Points when they use their credit cards. To get the most out of these benefits, customers should choose cards with point or reward structures that fit their lifestyle and spending habits. On the lender’s online credit card app, you can see the full list of benefits. On the mobile app, you can also check when the awards will expire. These reward points can be used to earn discounts on your purchases, allowing you to save money.

Increases your purchasing power

The card issuer gives the customer with a pre-approved spending cap when they use the credit card and pay later. The purchasing power of individuals is increased as a result of their use of credit cards. Large purchases, such as home furnishings, are easier to make with a card with a bigger credit limit. It’s also useful in case of an emergency. A card with a high limit comes in handy in situations where major payments must be made upfront, such as an unexpected hospitalization.

Avail an emergency personal loan

Companies like Bajaj Finserv offer a pre-approved credit limit and a fast emergency advance using your credit card. With your Bajaj Finserv co-brand credit card, you can receive a Personal Loan up to your cash limit at a minimal interest rate of 1.16 percent and no processing fee. On the company’s online credit card, you can look for further deals.

Convenient repayment window

Most online credit card firms provide a 30-day no-interest loan. They do not immediately take the sum from your savings account, unlike debit cards. It comes with a one-month grace period for simple payback. When coping with financial deficiencies and emergencies, this can be really effective.

Hassle-free EMI conversions

You may quickly turn large purchases into manageable EMIs that can be paid over a flexible period of time. In addition, most financial institutions offer no-cost EMI, so you don’t have to pay any further fees or surcharges on your purchases. This is done to help you pay off your large-ticket items.

Aside from the advantages described above, a card has universal acceptance, which can be useful while traveling internationally. With your card, you can quickly book your hotel and auto rental. With a debit card, however, this is not the case. Many online credit card firms also provide consumer protection on their cards to guard against theft and unintentional damage.

Many businesses provide sign-on bonuses in exchange for completing an online application, which may then be redeemed for future purchases. It can help you pay for monthly expenses, groceries, bills, and other things.

sanchitabhardwaj

Hi My name is Sanchita bhardwaj. I'm from delhi and i'm MBA graduate. I worked as a professional blogger and content writer.

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