The credit cards, once seen as an instrument to meet financial emergencies, have become a part of the daily lives for many people. The ease of use and the hassle free payment options make the credit cards convenient for many financial transactions like routine purchases at grocery stores and more. The additional offers and discounts also make credit cards more lucrative for many users.
The credit cards come with a predetermined limit and the amount used should be paid back with the due date. Generally most of the credit cards come with a free repayment period of 30 days within which you can make the payment without any additional charge.
Here are five benefits of using a credit card–
1. EMI Facility
A credit card comes in handy when you do not want a large sum of money to be debited instantly from your account. This helps you defer your payment. In addition, you can choose to pay off your purchase in equated monthly instalments (EMI) to avoid paying a large sum at one go. In case you are buying an expensive gadget or appliance, the EMI option will be helpful and it’s more convenient compared to availing a personal loan.
2. Discounts and deals
Most credit cards come with a slew of offers to encourage users to increase their transaction. These can range from cashback to rewards points accumulated each time you swipe your card. These are redeemable and can be used for further purchases. Several online retail websites also provide extra discounts if the customer is paying with a credit card. Many banks also offer free airport lounge access on a quarterly basis.
3. Building a credit score
Credit cards allow banks to record data about your spending and view your active credit history based on card repayments. This information will be crucial for banks and other financial institutions to assess a potential loan applicant’s eligibility for loans and other financial instruments. Hence, using a credit card will be advantageous if, in the future, you need to borrow a lump sum. A track record of regular credit card payments could help you build a good credit score.
4. Travel rewards
Many banks also issue travel credit cards. These offer lucrative discounts on flight tickets or hotel accommodations. These also help if you are traveling abroad, as they come with zero foreign transaction fees. In most cases, they also have insurance coverage for accidents while traveling as well as for lost luggage.
5. Controls expenditure
In some ways, the monthly credit card statements give us the details of our expenditures and prevent us from spending more than what we can repay. Additionally, you do not have to carry a lot of cash at any given point in time, and it is also a widely accepted mode of payment globally.
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