Top Benefits of Using a Credit Card
by John Judge WriterIf you are starting your journey to
improve your personal finance, you may have considered owning a credit card.
You must have at least got a communication from a customer service person
trying to sell you a credit card. So, the questions you might be having is what
is a credit card, what are its benefits and what should you know before owning
one.
What is a credit card?
A credit card is simply a financial
tool that lets you purchase products and services on credit. When you use a
credit card to make a purchase, you in fact borrow money from the financial
institution that issued the card to you. You are required to repay the borrowed
funds within a specified time frame. If not, you would have to pay a certain
percentage of interest to your card company.
With a credit card, you can purchase
products and services and pay for them later. This can be highly useful for
times when you absolutely need to make a purchase but are short on cash. And
that interest may be a bit high.
Financial institutions providing credit
cards let you borrow money under a limit called your credit limit. It
is decided based on your income, age, etc. You can make as many purchases as
you want using your credit card under your credit limit. Once you’ve reached
the limit, you can use the card again only after you repay your dues. You
can apply for credit cards online or at
your preferred bank.
Now that you know how a credit card
works, let’s jump on to what it offers you.
Benefits of using a credit card
Below are the benefits of using a
credit card:
1. You can buy stuff and pay for services on credit
for a specific interest-free period
The main benefit of having a credit
card is that you can make purchases even while not having the required funds.
Also, you are not charged any interest on your outstanding credit for the
interest-free period. It may range from 45 to 60 days.
2. You don’t have to carry cash around to pay for
products or services worldwide
Even when you have to make a large
payment, you can do so easily with a credit card. You get easy access to funds,
and you can also pay for your purchases later with credit cards.
You can use your credit card to pay for
products or services worldwide. Credit cards are one of the most accepted modes
of payment across the world.
3. You get amazing rewards, discounts, and cashbacks
with credit cards
When you use a credit card to make
purchases, you get the best rewards out there in the form of discounts and
cashbacks. The credit cards with rewards can severely reduce the cost of your
future purchases such as on flight tickets, petrol purchases or shopping.
4. You can track your expenses daily
Every time you make a purchase using
your credit card, you get an alert. You also get a monthly statement containing
the details of all your spends, which makes tracking your expenses very easy.
If you make a habit of making all your
purchases using your credit card, you can track your expenditures and improve
your spending.
5. You can make big purchases with your credit
card’s EMI Facility
If you want to make a big purchase
without affecting your bank balance, credit card EMI is the convenient option
for you. You’d need to pay interest on the money borrowed only if you are not
able to repay it in the interest-free period.
6. You can really improve your credit score
One of the best benefits of using a
credit card is that you can use it improve your credit score. With a good CIBIL
score, when you apply for a loan in the future, there would be high chances of
it getting passed. Just don’t forget to pay your credit card bills on time!
Final Word
A credit card is one of the best
payment methods you can use. On top of being able to make spends on credit, you
can even enjoy amazing rewards and discounts for using your card while building
your credit score.
Altura Plus Card from AU Bank offers many amazing benefits. Altura Plus Card offers great rewards and cashbacks on your purchases using the card. Make the most of credit cards by using them smartly, avoiding overspending and making bill payments on time.
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Created on Jan 12th 2023 07:14. Viewed 211 times.