Know The Top Benefits Of Using a Credit Card?

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Credit Card (Image: Pixabay)
Credit Card (Image: Pixabay)

New Delhi : A credit card is the best way to manage your finances during a financially difficult time. It allows you to borrow money from a pre-approved credit limit to cover the cost of purchases. Your credit limit is decided by your credit card issuer, which is determined based on your income and credit score. 

So, if you are searching for ‘credit card free’, you are looking for maximum benefits, such as reward points, no annual fee, 0% APR, etc. To get such a credit card, you will need to convince your card issuer that you can make on-time repayments and have maintained a healthy credit score. 

Depending on your needs, a credit card free comes with a host of features and benefits that you can avail of. Here are the top benefits of using a credit card: 

Easy access to credit  

Much of a credit card’s popularity stems from the fact that it provides easy access to credit. The basic function of a credit card is that you can use your card to purchase now and pay the bill late. The best part is that it is not linked to your bank account, due to which you will not dent your bank balance every time you swipe it. A credit card is ideal when you need cash urgently and plan to repay shortly. 

Offer programs

Most credit cards in India come with a host of incentives and offers that you can avail of while purchasing goods and services. You can earn cashback and reward points every time you swipe your credit card at a PoS terminal. You can later redeem your reward points as air miles or use them to pay the outstanding card dues. Further, some lenders offer discounts on purchases made through their credit cards. For instance, you can avail of discounts on international flight tickets, vacation packages, large purchases, etc. 

Build your credit

The benefit of using a credit card is that it helps you build a line of credit. Based on your credit usage and repayments, you will have an active credit history that will reflect on your credit score. Lenders usually consider your credit card usage to determine your creditworthiness. So, using your credit card can help you build your credit card score, ensuring loans in the future. 

Equated monthly instalment option 

Credit cards are best suited for small purchases. But, if you plan to make a large purchase and do not want to touch your savings or investment, it would be wise to use your credit card and pay off your debt in equated monthly instalments. This way, you do not have to pay a large sum of money at once and risk emptying your bank account balance. The best thing about credit card EMI is that it is cheaper than a personal loan to pay for a big-ticket purchase, such as an expensive laptop or television. 

Record keeping 

Every time you make a purchase, your credit card keeps a record of it. You will get a detailed record of your expenses with your credit card statement every month. It allows you to determine and track your spending and purchases each month, which is a great help while drafting your monthly budget or filing taxes. 

You receive an instant SMS alert each time you swipe your credit card, providing information such as the amount of credit and the current outstanding amount. Also, having a detailed list of expenses allows you to report any unauthorized transaction to your credit card issuer. 

Interest-free period

Another benefit of a credit card free is that it comes with an interest-free period. As the name suggests, it is a period during which you do not need to pay interest on your outstanding bill. The interest-free period generally ranges between 45 to 60 days. During this period, you can pay off your entire outstanding balance without paying any interest. So, you can get a credit card for yourself and make purchases without having to pay any charges while making repayments.

Purchase protection

The best thing about a credit card free is that you have insurance for card purchases that are lost, damaged, or stolen. For instance, if a purchase has been damaged or lost within 180 days from the date of purchase, your credit card issuer will pay for it. To claim your insurance, you can use your credit card statement to vouch for the loss.

Take a credit card from a trusted financial institution and enjoy the benefits freely.