Digital transactions have rapidly replaced cash in the modern age. In this digital age, credit cards dominate the arena, providing convenience to users. Credit cards are now more attractive to the general consumer, as they come with several benefits to cardholders.
Credit cards are easy to carry, make funds more accessible, and give rewards for transactions. In this article, we will explore credit card benefits and how they add value for customers.
The benefits of credit cards in India are innumerable. However, before we dive into those, we must first be familiar with all the types of credit cards that are accessible to Indians.
What are the benefits of a credit card, you ask? Credit cards offer reward points and cashback, provide discounts on international purchases, and protect against fraud. Credit cards in India also come with a myriad of promotional offers. Here are some benefits of credit cards in India:
The biggest benefit of having credit cards is that they offer convenience. You no longer have to carry cash around with you or compromise on your purchases due to a lack of money at the moment.
Since the country is highly digitalized, you can carry your credit card anywhere with you and make payments, big or small, with a simple swipe.
If you have a credit card, you no longer have to carry the right amount of change or bills. Simply present your credit card to the cashier and relax.
One of the best benefits of having a credit card is that you get access to instant credit whenever you want. If your funds dry up, there is always an option to pay on credit. Credit cards also give you an option to withdraw cash from ATMs, albeit at a higher interest rate.
Credit cards in India also serve as a backup reserve for times of financial instability. If you do not get paid for a month or are short on funds, at least your bill can still be paid.
Credit cards provide strong buyer protection. Every day, millions of new websites pop up, offering attractive deals and better products. However, most of them are illicit and designed to extort money from unsuspecting buyers. With a credit card, however, you can purchase without any fear, as the purchase is protected against fraud.
If you suspect fraud or if you do not receive the order from the seller after purchase, you can raise a dispute against the transaction with the credit card company. This service is called ‘chargeback’ and helps you against fraudulent sellers. It is especially useful for high-value purchases.
Did you know that you can use your credit card to build your credit score?
Most users are not aware of it, but credit cards can be used as tools to build a credit score. Your credit score determines your creditworthiness as a borrower. So, having and using credit cards regularly can help you improve your credit score easily.
All you have to do is be punctual on your credit repayments and stay within your credit limits to increase your credit score. The higher your credit score, the better the loan opportunities for you.
Using a credit card responsibly is crucial for establishing a strong credit history or improving a poor credit score.
Credit cards can be used for one-time purchases, but they are best for recurring payments. You can use your credit card to set up recurring payments for monthly bills such as electricity, phone, and gas. This way, you avoid the risk of neglecting to pay your bills on time, thereby preventing late fees and other penalties.
Setting up monthly recurring payments through credit cards can help you improve your credit score as well.
Most credit cards have a rewards program. This means that they offer rewards for every transaction you make with the card, such as points that can be redeemed for vouchers, trips, and other gifts.
In addition to rewards, users are also provided with additional credit card benefits such as cashback on all purchases, access to online shopping deals, and discounts when they use the card at certain retailers.
If you are a premium credit card holder, you can expect to receive many perks, such as priority check-in, free golf lessons and games, and you can access airport lounges for free. These benefits depend on the card.
There are some super-premium credit cards that allow users to play golf unlimited times a year, free of cost. While others offer a concierge service to the user. Several websites, usually Visa, offer compelling deals from time to time to these credit-card holders.
Online shopping is undeniably more cost-effective and convenient. From buying apparel from local stores to booking international flights, there is an online payment option for everything.
While shopping websites offer a range of payment services, using a credit card would be a wise choice. Making a purchase online using credit cards can help you earn rewards, cashback, and several other valuable benefits.
Moreover, if you are making a purchase on an international website, it is unlikely that you will be provided with a debit card or COD option. If you are making such a purchase, a credit card will make it easier for you to accomplish the task.
Credit cards offer a ton of benefits. Besides the above-mentioned perks, users can also avail of accidental death cover, fire insurance, and more, depending on the type of credit card they are using.
There are hundreds of credit cards available in the Indian market. The right credit card for you is one that fits into your budget and gives you discounts and rewards for the purchases you make.
Keep these things in mind when selecting a credit card for yourself:
Fees and Charges
Most cards come with a joining fee and an annual fee. However, there are many life-time free credit cards that do not require these fees.
Also, check for other fees like late payment fee, foreign transaction fees, balance transfer fee, etc. Make sure the fees charged by the credit card fit in your budget.
APR
Annual percentage rate or APR is the yearly interest rate you will have to pay if you carry a balance. The higher the APR, the more you will have to pay in interest.
Keep in mind that credit cards provide an interest-free period of 18 days to 48 days. This means you will not be charged any interest within this period.
Rewards and Promotions
Banks and credit card issuers provide reward programs and other promotional offers to their customers. Make sure the rewards the credit card provides are for spending on things you frequently purchase.
Acceptance
Make sure the credit card is accepted where you shop. Some credit cards are not accepted internationally. For example, RuPay is very common at Indian ATMs and shops, but some foreign online merchants might not support it.
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Credit Cards are a valuable financial tool. A vast majority of people avoid using credit cards because they fear they will become debt-ridden. Despite common misconceptions, credit cards are not to be feared. Apart from being safe, secure, and convenient, credit cards offer several benefits to users when utilized responsibly.
Now that you know the compelling advantages of a credit card and all the ways it can work for your benefit, it's time for you to get one and start enjoying the perks and rewards it offers.
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There is no maximum number of credit cards that you can have. As long as you qualify and fulfill the required criteria, you can carry as many credit cards as you want. If you do not maintain the appropriate credit utilization rate, your credit score may suffer.
While a credit card is a savior, there are times when it should not be used, such as
Rent
Large purchases that exceed your credit limit
Paying taxes as this will incur a fee
A series of impulse purchases
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Disclaimer
The starting interest rate depends on factors such as credit history, financial obligations, specific lender's criteria and Terms and conditions. Moneyview is a digital lending platform; all loans are evaluated and disbursed by our lending partners, who are registered as Non-Banking Financial Companies or Banks with the Reserve Bank of India.
This article is for informational purposes only and does not constitute financial or legal advice. Always consult with your financial advisor for specific guidance.
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