In this article we are going to talk about the benefits of having a credit card. In today’s fast paced life people are looking for faster and efficient means in all aspects and spheres of life. This applies for financial affairs too. There is a need for more security, assurance, effectiveness and convenience when it comes to money matters and hence banking as a sector has been largely digitalised over the past few years. People as consumers are more concerned with transactions involving goods and therefore payment services play a very important and crucial role in their life.
This is where credit cards come into play. Credit cards are basically cards issued to users that allow them to pay for goods and services as credit. The card holders have to pay back along with other agreed charges. This basically allows users or consumers to borrow money without having to repay the whole amount by the end of the month but rather it allows users to build a continuing balance of debt. This is a major advantage of credit cards.
Unlike debit cards where money is withdrawn directly from users account and charge cards that requires the balance to be paid in full amount each month credit cards allows users to borrow from card issuers without having to repay whole amount each month.
Top 10 Benefits Of Having a Credit Card
Here are the benefits of having a credit card discussed below in detail:
The first and foremost feature is the convenience in using credit cards. Its always convenient to carry a card to make payments rather than carrying a bundle of money with you. Also it allows to make quick short term loans. In case of making online payments too using of credit cards is highly convenient and extra benefits are also received. Also one need not check the balance remaining before every transaction but should just take care that the maximum limit is not exceeded.
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2. Online Payment
By linking your credit card to digital wallet it is possible to make online payments as well as scan and pay instead of carrying the card around. It also helps with recurring payments such as water bills and electricity bills. Online payments are easier and safer using credit cards. Shopping has become so much easier using credit cards as people can sit at home and do payments and transactions at their will.
3. Special Rewards
Special rewards are awarded like gift vouchers, free shopping vouchers etc. this can depend on the card issuer. The competition in the sector for more users gives the users such added benefits. They offer a loyalty program where reward points are awarded for each purchase and they can be redeemed for products.
They also offer special sign up bonuses for signing up with the particular card issuer (usually bank). These include bonus points , reduced interest rates etc.
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4. Keep A Track Of Your Expenses
The use of credit cards need a disciplined spending habit. The monthly credit card statements can help keep a track of your expenses and also helps you spent wisely. It can be used for monitoring personal as well as work related expenses for taxation and reimbursement purposes.
Keeping a track of your expenditures and purchases and paying back at regular intervals is very important for maintaining a good credit score.
The use of credit card is without doubt safer than carrying around money with you. In case if the credit card is lost it can be blocked or hotlisted almost immediately. Also safe online transactions can be done using a credit card since there are it provides a high level of securities.
The security depends on the card and the credit card numbers. As long as the card is intact and the number is known only to the card owner any potential fraudulent activities can be avoided.
For online and telephone purchasing where the card itself is not required controlled payment numbers are used. This is a one-time use numbers and function as a payment card. This has increased security since it does not reveal account details and cannot be used for other transactions.
There are also security features present on the credit card. Most cards have a watermark and also a hologram. This can prevent counterfeiting since the watermark fluoresce under ultraviolet light and is invisible in normal light.
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6. Additional Insurances
Credit card users are provided with additional benefits such as travel insurance, purchase protection insurance, price protection insurance etc. Price protection insurance essentially means that in case of drop in prices of goods you bought the difference will be credited to your account, if you can show proof for the same. Purchase protection insurance insures your newly bought products against theft and damage for up to five or six months.
Travel insurance is an added advantage for people having jobs involving a lot of travel since it can save money as well as time.
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7. Cash-backs And Discounts
Exciting offers and cashbacks are awarded to credit card users for online purchases. Also credit cards have a cashback rate that can vary from 1% to 5%. The money saved depends on monthly expenses and also on where you shop.
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8. Can Work Almost Anywhere
Credit cards can be used in most countries since credit cards are almost universally accepted. It can be used to make purchases in foreign lands at lower currency conversion fee. Some travel credit cards don’t charge currency conversion fee in certain countries.
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In case of situations like medical emergencies credit cards can be used to pay medical bills. Instead of borrowing from relatives or friends or going through the hectic processes of availing for loans etc. one can simply use their credit card.
It also allows users to withdraw cash from ATMs when in need. Some card issuers award reward points for withdrawal.
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10. Credit Score
The credit score is a three digit score calculated based on your credits and how well you pay them back. Eligibility for loans is decided based on your credit score. Credit scores can be improved by paying back at regular intervals. It also determines at what rate of interest and credit limits the loan is given to a person.
The major benefits of using credit cards have been discussed above and although being a credit card holder is a great advantage it should be used judiciously and wisely. One should have a limit over their expenditures and always keep track of your purchases and transactions as the misuse of credit card can result in liabilities and debts.
Read Also: Advantages and Disadvantages of Credit Card
While the many advantages and perks that come with credit cards should be exploited ensure that money is spent wisely. Before getting a credit card it is always important to do some research as to which banks gives the best options. Look for credit card features that suit your personal life as well as work so that you can yield maximum gain.