The number of credit cards being used is increasing rapidly day by day. Today, many people are opting for credit cards over debit cards for the fair amount of benefits they get. The purpose of this article is to list down the top benefits of credit cards and the various features involved.
Credit Card Benefits.
The six top benefits of credit cards are as follows.
1. Convenient Payment Method
Carrying loads of cash while traveling can be a hassle. Now that cards are accepted everywhere, it has become a simple and secure option to use money. The credit card can also be linked to the e-wallet on your mobile phone, so you don’t have to carry it in your pocket.
2. Purchasing Power
With a credit card, you can usually buy more than you can afford. It has a fixed credit limit on which you can spend money. This gives you the ability to make big purchases like electronics, two wheelers, health insurance, holiday bookings, etc. and never worry about falling short on cash.
3. Credit Score
A credit card helps you build a good credit score. Credit bureaus like CIBIL Score, CRIF High Mark, Experian and Equifax provide credit scores based on how well you have dealt with payments. When you use the card for a transaction, you pay the amount to the company. It helps you to increase your score.
A good credit score means that you will be able to get easy loan and credit card approval in future. You will not get this benefit if you use Debit Card, Cash or Cheque.
Credit card companies offer various reward points on transactions made through the respective credit card. These reward points can be used to get gifts, vouchers, flight bookings, etc. Different banks have different reward plans like- HDFC Reward Points for food and dining, SBI Reward Points for Travel & Leisure, ICICI Reward Points for Hi-Tech Gadgets, etc.
5. Interest Free Loan
Credit cards offer an interest free period on your purchases. This means that if you pay the amount before the due date, you will not have to pay any interest on your expenses. In case, if you fail to repay the amount before the due date, then an interest rate of 10-15% is charged.
6. Tracking Purchases
Any transaction you do using a credit card gets recorded in your monthly credit card statement. It can be used to track your expenses and create a budget for yourself to spend.