With the rise of online shopping the place digital payments have turn out to be the norm, the usage of credit cards has also turn out to be extremely popular. A credit card is a plastic card issued by banks or credit card companies. It allows us to make purchases without paying any cash or check.
It is very convenient for us to own a card, especially for purchases. Once we wish to buy things or obtain services that value a big sum of money, we needn’t carry a lot of cash or purposely issue a check to make payment.
In our everyday life, we could face the chance of being robbed, if we hold a sum of cash, we’d then lose all our money. Nonetheless, if we lose the credit card, we are able to instantly report the loss and get our card changed. We cannot undergo a big loss.
Some of the benefits of the credit card
The biggest benefit of credit cards is the convenience. It’s very small in size and takes less space than the cash. We don’t need to keep lots of cash or checkbook with us. Not only this, but your plastic money is also handy at department stores, hotels, hospitals, restaurants, airlines, petrol pumps, etc. This is especially helpful for travelers because they directly spend with their credit cards in any currency.
Free credit period:
One of the main benefits of the credit card is that the amount you spent today with the credit card has a great payback and also an interest-free period. Generally, the payback period varies from 42-52 days depending upon the credit card type. But in case you miss the last date to pay the bill, there’s a huge interest you have to pay or you have the option to convert the pending dues in emails.
So, don’t ever miss credit card payments because it majorly affects your credit card score. As your credit score going down, your eligibility criteria for taking loans in the near future is also reduced. It also affects the rate of interest of your loans.
Cash advancement facility:
Yes, you can withdraw money from the ATM with a specific cash limit depending upon the credit card type as well. But we suggest you use this feature of credit cards less as possible because you have to pay huge interest on this and this is the main earning source of credit card companies.
Extended credit facility:
Sometimes a person fails to pay the dues on time. Then a term that occurs as a facility of extended credit.
While doing credit card payments, there is an option either to pay the full amount or the partial amount. Partial amount means generally 5% paying before the due date and amount left i.e 95%, you can pay this amount later plus interest.
When it comes to debit cards, they don’t accept all around the world. Some of the purchases are difficult to make with a debit card. The credit card is the most commonly accepted mode of payment, worldwide, allows cardholders to take benefits of this anywhere.
Cashback and rewards
If you are using a credit card for regular spending, then you could take advantage of one with cashback and rewards. Generally, you can save 1-3% on all you spend. This can be either in the form of cashback or adjust that amount in your next statement.
For example, if you spend Rs. 50000 with a credit card, you will get a cashback of Rs. 500-1500.
The cashback you earned depends upon the type of payment.
Some credit cards give cashback and some give reward points. Reward point value depends upon the credit card type. Mostly 1 reward point is equal to Rs. 1, Rs. 0.50, Rs. 0.25. Etc.
With all the benefits offered by the credit card, we can say that credit card is must in 2021