Do you hate credit card calls as much as I do? But do you know there are a lot of benefits attached to using a credit card? Yes, it’s true that you get a lot of benefits as a credit card user. Here are 10 benefits of credit card use that you are not aware of.
Almost every day I get a call from soma bank regarding credit card and I just neglect their offer because I know it is not useful to me. I am sure that you must be doing the same thing but are you aware of the benefits of a credit card? Yes, there are benefits of the credit card use to customers like you and me. And, let me tell you that every coin has two sides so if there are benefits then cons too.
But everyone knows about cons and hesitates to get a credit card and let’s just discuss the benefits of credit card use. And, I have seen a lot of people taking advantage of credit cards in their personal and professional life.
What is a Credit Card?
In simple terms, the credit card is reverse of the Debit Card. The debit card uses balance available in your account while the credit card does not require any account balance. With the credit card, you can first make payments while shopping and spending then afterward you have to pay credit card bill within a stipulated period of time. Generally, this stipulated period of time is 50-60 days. If you don’t pay them within this time they charge a very high rate of interest which may go even up to 48% per annum.
So, now you know that credit card is a loan on you because you have to repay it after all. And, it’s a good thing too because first you are using their money and then you are just repaying it.
How to Get a Credit Card?
In order to get this Credit Card, you have to fulfill certain conditions like you need a minimum balance in your account and some security in case you don’t pay back your amount due. Most of the time Credit Card companies contact you themselves if you have good account standing. They will attract you with a lot of offers and schemes but they are just tactics to attract a customer.
But if you are interested in getting a Credit Card by yourself follow these steps:
- You can go to the Bank where you have a Bank account and ask them about Credit Card.
- Almost every bank provides Credit Card facility now.
- You can go to Bank Websites to apply for Credit cards Online
If you know hat credit card then let’s just jump to the part where we discuss benefits of credit card use.
Benefits of Credit Card
1. Don’t Miss Discounts
Yes, its hundred percent true that you are missing out a lot of discounts on the internet if you are not using a credit card. Almost every e-commerce store whether it is selling a product or service but they are running huge discounts. Some stores give you a specific percentage of discount and some do it in the form of cashback.
It does not matter what is the form of discount but the thing that matters is that you are missing huge discounts if you are not using a credit card. I was just visiting amazon and looking to buy a certain product. And, there I found out that almost every seller is giving a certain form of discount with one or the other credit card companies. Most of the discounts were with SBI and ICICI Credit cards.
So, you can tune in with a credit card and start enjoying discounts that are waiting for you. You can get a lot of discounts on entertainment websites and others.
2. Pay without Money
So, when you are using a credit card you are not actually spending your money because you don’t actually have money. It is after you use it then you pay it. So, at the time of using the money, it’s not yours.
It’s like you don’t have a single penny in your pocket but still, you get bills to pay. Why not use your credit card whose bill is to be paid later on? Great isn’t it? It looks very attractive and fantastic option for some people especially the salaried employees.
I have av friend who is always out of money when its 15th of the month only. And, using a credit card is definitely beneficial to pay off expenses. I know a guy in my circle of known people who pay all his expenses using a credit card and then pays of the bill when he gets his salary.
So, it’s like you don’t have to ask anyone for the cash and instead, you can use your credit card.
3. Universal Payments
Credit cards are universally accepted no matter what are you buying and where are you buying. Not only the online stores but I am also considering the acceptance of digital payments on department stores and small shops.
I still remember that time when I was looking to create an account on the Google play store to publish my Android app but I wasn’t able to do. Because Google was not accepting payment from my Debit Card and I had to ask a friend for his credit card. I had a Visa Debit Card but my bank was not paying to Google. But I successfully made it through a credit card.
Don’t you think a credit card is must now? I am not saying that you should get it right now but it is one of the benefits of credit card use so as to be able to pay anywhere. Any website that accepts online payments, it has credit card payments being accepted.
4. Cashless Transactions
when you are using a credit card you are not only getting benefits of a credit card but also promoting a cashless economy. You are using a form of money called plastic money and also promoting the motto of the nation.
In 2016 Modiji announced the Demonitisation of Indian currency and that was the most needed time for a credit card. I still remember the time when I was allowed to withdraw only an amount of Rs 2000 and the whole economy was running out of cash. But credit card was quite useful at that time.
So, by using a credit card you are just promoting the whole idea of cashless transactions and building the nation.
5. Reward Points
So, when you are using a credit card you are enjoying a whole level of discount. And, then you are also earning reward points t5hat you can use to make further payments.
This benefit is also given to debit card users to promote the use of cards and that good for every party involved. And, same is the for credit card users. I have a friend who always pays his expenses by his credit card. And, those expenses are of his office which he gets reimbursed. This way he gets the benefit of reward points with his credit card.
It’s great to get something for using something that you are obviously going to do. So why not enjoy one of the many benefits of credit card usage?
6. Track your Expenses
Some people fail to keep track of their expenses and always think of making a budget but fail to do so. This is because you are making payments using cash which cannot be tracked.
But, if you do the same with a credit card you will have a whole list of expenditures and payments that you have made. This will help you know where are you spending your money and keep control of your expenses.
It will also help you to make a budget and plan your expenses for next month. If you are not realizing the importance of making budgets then you must start doing budgets. And making budgets is a great way to keep track of your expenses and money and also controlling them.
7. Secure Purchases
Let’s suppose you purchased a phone from Amazon using your credit card. After a few days of using it, you encountered a problem and now you want to return the phone. And, you even returned it on Amazon. Now, Amazon would return your money in its stipulated p[eriod of time. But, guess what it’s not your problem now as its between Amazon nad credit card company now.
So, when you are purchasing anything using a credit card, your purchases are secure mostly. This is one of the benefits of credit card and making your purchases secure.
8. Credit Score
A credit score is something that is looked for when you ask for a loan. And, you can build a good credit score while using a credit card. It’sd possible that you may not know that you need to pay credit card bills within a stipulated period of time. It varies from 40-60 days and even maybe longer too.
But the good thing is that if you pay your bills on time you can maintain a good credit score. And, this score will help you get a loan in the future. And, that’s all you don’t need to ask anyone for a favor or guarantee.
These are a few of the benefits of credit card use but there are a lot of risks too and some of which are listed as follows:
Risks of Using a Credit Card
- Fees – Even if you always pay your credit card bills on time you will have to pay their annual fees. Yes, its hundred percent true and even if you don’t use it you will have to pay it as long as you keep it activated.
- Heavy Interest – You may not know this but a credit card is the most expensive form of lending. This is because the interest charged may go up to 48 percent per annum. Because you get an interest free credit card but if the bills are not paid on time the interest is very high.
- Temptation – It always happens that you found a product that you like and if you have the money you are going to spend on it even if you don’t need it. And, if there is a credit card on your hand with a huge limit that is absolutely going to fetch out a lot of money from your pocket.
- Theft – I am not saying that you will be robbed but imagine somehow you lost your credit card. And, that’s it, now anyone can use it to make payments because there is no OTP involved.
Concluding the Benefits of Credit Card Use
No matter how much emphasis I pay on the benefits side but I am not going to use a credit card at least for now and no one knows what life has in the future for you. So, the thing is like this that the credit card is good for you and even bad for you because every coin has two sides. And, only you know what is best for you. So, before taking any decision just think about what you are going to do.
Take a strong decision and think about how much liability you are going to incur just by making one decision. Every decision has a big impact especially when it involves money.
So, a credit card gives you a lot of offers and benefits but you must know that by using the credit card you are inviting debt to your life. And, we all know what happens when you are into a debt trap. The debt trap is a vicious circle and it keeps you attracting unless you are fully into the loan.
My honest suggestion to you is not to get a credit card until and unless you genuinely need it. And, if you need it then you should be careful with it.
Let me know your thoughts on the “benefits of credit card use” to a common human being?