Credit cards have become an important part of our daily lives. But some people are still afraid to do it apply for a credit card. There are many myths about using credit such as it allows you to have cash on hand at any time so you can develop a habit of overspending, which can leave you with a large credit card debt.
It’s true that not using a credit card responsibly can be dangerous, but it’s not a common consequence of owning a credit card. On the other hand, there are many advantages to using a credit card. Credit cards allow cardholders to make all kinds of purchases and even allow them to withdraw cash for a fee.
All credit cards impose conditions in such a way that cardholders must pay back the money they borrow along with interest. The cardholder must repay the loan and interest within 25-30 days. Otherwise, users will have to pay extra interest.
The reason behind the popularity of using credit cards is that they give you the opportunity to pay for your needs when you are short on money or cash. Using a credit card can be your only option when you’re short on cash.
Apart from using it as an emergency amount, credit cards also come with other perks like interest free periods, reward points, offers or discounts and better credit score etc. Credit cards, unlike other tools that allow you to make better purchases, can be used in many ways.
So, let’s find out below all the benefits you get when applying for a credit card:
Here are five important reasons why you should apply for a credit card
Build a good credit history
When taking out credit or borrowing money from banks and NBFCs, having a good credit history can go a long way. Generally, all banks prefer a minimum credit score of 750 to provide credit to customers. As we know that credit card companies report your payment activity if you use a credit card, to the credit bureau.
So, if you pay your credit card bills on time, this can also help you improve your credit score. If you don’t have a credit score, you can even use a credit card responsibly to build up your credit score.
Easy reception everywhere
It can be difficult to make certain purchases with a debit card such as when renting a car or booking a hotel room. In those days, credit cards made work easier. Some car rental companies or hotels prefer customers to pay by credit card because it makes it easier for them to charge the customer if they cause damage to the room or car.
So if you’re willing to pay for those items with a debit card, then the company can hold the amount you paid out of your account. Also, temporarily traveling in a foreign countryit is possible that merchants may not always accept your debit card, even from a major bank.
Ensure security
The advantage of a credit card is that it can help you avoid losses due to fraud. Because if your credit card is lost or stolen and used by thieves, the money will disappear directly from your account. In addition, it takes time for fraudulent transactions to be completed by the bank.
On the other hand, if your credit card is used fraudulently, you won’t spend any money. In this case, you just need to notify the credit card company and you don’t pay for the transaction made until the credit card is cleared. Due to insufficient funds, legitimate charges are delayed and displease creditors. Even these late payments can lower your credit score.
Cash back and reward points
By using your credit card to pay, you can earn reward points for every purchase. Different companies offer different amounts of reward points. You can redeem the reward points you have earned from your purchases to get gift vouchers or even get products from the gift catalog or you can exchange them for products that you specifically want.
In addition, the concept of cashback has also become more widespread lately. Some cards even now offer 6% back on certain purchases.
Convert credit card purchases in EMI
It is now possible to easily convert your credit card purchases into EMI on any website or e-commerce outlet by submitting an EMI request when you shop. Even some banks send SMS right after your purchase with your credit card to convert the transaction into easy EMI and just by replying to it you can convert your purchase into EMI.
In essence, credit cards are very helpful products if you use them correctly. Well-monitored credit card spending can give you several advantages. If you already know the trick to using your credit card responsibly then you can shift as much of your purchases as possible to your credit card.
