Wondering If You Really Need a Credit Card? Know These X Benefits

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Credit cards bring with them mixed opinions. Some say it is a handy financial tool, while others say the opposite. Whether using a credit card is helpful or not entirely depends on the knowledge of the person who is using it. Ask around if you will and see how people cover so many of their expenses with a credit card, while there are also people who prefer using just debit cards. 

The onset of the digital age has pushed the use of credit cards higher than ever. In India, credit card circulation has reached 48.9 million in May, says this source. While purchasing something over the phone, internet or in-person, a credit card provides you with more options.

How Credit Cards Function?

A credit card works like a short-term loan. To get a credit card, one needs an approved credit limit. A credit line is an amount you can spend before you ‘max-out’ your card and not use it for further purchases. The basis of a credit line is your income and history of credit; the better those are, the more banking and financial institutions trust your credibility and provides a higher credit card limit.

Every month, you receive a bill for the amount spent. The requirement is to pay the minimum balance and not the whole balance, and you pay interest on the remaining amount. If you choose to pay the balance amount in full, no interest gets levied.

Here’s why we think using credit is a good option; find out the advantages below: 

  • Builds A Healthy Credit Score

Credit cards offer you instant money in case of an emergency. Most of us carry only the needed amount we would spend in a day and not enough for unplanned situations. Credit cards are an instant solution to pay for any unexpected expense. You do not have to worry about transferring money from your bank account when you have a credit card.

A credit card helps you establish and better your credit history which increases your credit score. The better your credit score, the lesser you pay. A high credit score denotes your credibility as a user, which results in you paying lesser rates of interest on your loans and credits.  

Improving your credit score by responsibly using your credit card will ensure considerable savings in your lifetime in comparison to those who have a lower credit score. 

  • Zero Liability Protection

Let’s say there is a purchase on your credit that you did not make, or that you have ordered for something and it does not get shipped. You don’t have to worry cause your credit card provider will be the one who is responsible. You just need to call the credit card company and raise a dispute against the charge. 

Visa, MasterCard, RuPay all offer zero liability for any unauthorized charge on your card. Purchase anything in a store, on the phone, or over the web, zero liability extends to it all. So, why use cash? 

  • Purchases Over the Internet

You must have seen many attractive deals and offers on the internet. In many cases, a credit card is the only option of paying for your online purchases. If you have a credit card, you save more on the items you buy. Without a credit card, you may pay more for the same thing. 

  • Convenient While Travelling

Traveling in India or abroad costs a lot of money. One convenient way to pay for it is through a credit card. You don’t have to carry hefty amounts of cash with you on your travels and worry about its safety. Credit cards also provide access to secure foreign exchange abroad at better rates. (Take into notice the foreign exchange fees on your credit card)

  • Get Rewarded for Use

Many credit cards provide rewards for your usage. It can be anything from cashback offers to travel miles for air tickets. Use credit cards that have reward programs and save lots of money. Look at the most common rewards that you can get:

  • Points/Miles: Every purchase you make earns you points or miles. You can redeem them for flights, hotels, bookings, and at many partner stores.
  • Cashback: Each purchase ensures you get a percentage of it as a cashback. It’s like you get a small discount every time you shop. 
  • Instant Discounts: Multiple partner sites and stores give extra discounts on your purchase, instantly deducting the discount amount.

Know Your Credit Card Before You Choose

From the multitude of credit card offers available online, make sure you know about the features, terms and conditions of your credit card thoroughly. Get a clear idea about the interest rates, the fees charged, and or if you have any introductory deals and when it ends. Ignoring these can accidentally put you at risk of paying interest or fees. 

Find yourself a credit card that either increases your rewards or offers low-interest rates on your usage. Get your credit card from reputable institutions like Axis Bank, which provides attractive deals and offers. Learn about various add-on credit card services like credit limit enhancement, instant loan services, e-shop cards and much more. 

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