It can hardly be denied that credit card is a convenient financial product that can be used for everyday purposes – be it gas, groceries, or any other goods/services. In fact, it has proven to be an excellent resource for purchasing big-ticket items such as TVs, travel packages, and jewellery since we do not always have funds for these items at our disposal.
Besides the convenience factor, other benefits of credit cards include, providing the opportunity to build credit, earn rewards and cash back, and protect against credit card fraud. If you are soon to apply for a credit card, you will surely be delighted to find out its advantages in detail, as mentioned below:
●Speed: Credit cards are saviors on occasions when you need to buy something expensive but cannot afford to pay for it all at once. However, make sure that you use it sensibly. A 0% purchase credit card allows the cardholder to pay for the item in its entirety and then distribute the costs over a period of a few months, by making a series of payments to clear the balance. As long as this total is paid off before the interest-free period ends, then nothing is charged for using the credit card. However, by missing the deadline, cardholders can attract a penalty in the form of interest added to the balance every month.
● Protection: under Section 75 of the Consumer Credit Act, you get more protection by paying with a credit card rather than a debit card, cash or cheque. You will also be protected against fraudulent use of your card as in such cases, your card provider has to refund the money. This, however, won’t work if your card provider finds that you were negligent. Hence, it is crucial to never write your PIN number anywhere.
● Borrow for free: some credit cards offer 0% periods which means that one can effectively benefit from an interest-free loan. However, the minimum monthly payments need to be made, and the balance should be cleared before the end of the 0% offer, failing which interest would be charged. The average interest which is 18%, is quite hefty, which is why it is always advisable to pay the debts off before interest gets involved in the picture.
● Earn while you spend: some of the best credit cards in India even offer incentives to spend, including cashback, loyalty points or air miles, which basically implies that one can make money through the use of credit card. However, it should be noted that these are only worthwhile if you pay your bill in full, otherwise, the interest you will be charged will turn out to be more than the value of the rewards. Bajaj Finserv RBL Bank SuperCard comes with a number of innovative and industry-first features that will delight you immensely.
● Switch your balance: in case you owe money on credit store cards, a new card can actually prove to be an advantageous option. You will probably be paying interest rates of at least 18%, but that can be cut to zero by transferring your debt onto a 0% balance transfer card. There will be a transfer fee of approximately 3%, but it is usually worth it as it will still be less than the interest you will be charged if you stick with your existing card.