Because of its simplicity of use and practical payback possibilities, credit cards have become an essential part of our lives. For the savvy consumer, a credit card represents a financial windfall because of the unrivaled savings, promotions, and deals it offers. But, if you use credit cards improperly or spend more than you can afford to pay back when the bill arrives, they can turn into debt traps.
Some of the benefits associated with using a credit card are as follows:
Simple credit availability
The ability to obtain credit easily is a credit card's greatest benefit. You can use your credit card now and pay for your purchases later thanks to the postponed payment feature of credit cards. Every time you swipe, the money is not deducted from your account, keeping your bank balance intact.
Establishing a credit line
You have the opportunity to establish a credit line with credit cards. This is crucial since it gives banks access to your current credit history based on how you use and repay your cards. Since credit card usage is a common metric used by banks and other financial organizations to determine a prospective loan applicant's creditworthiness, your credit card usage is a key factor.
EMI structure
You can choose to charge a major purchase you want to make on your credit card to postpone payment if you don't want to use all of your funds on it. Furthermore, you have the option to settle your purchase in equivalent monthly installments, which will prevent you from paying the entire amount at once and negatively impacting your bank account. When making a large purchase, like an expensive refrigerator or television, paying using EMIs is less expensive than getting a personal loan.
Rewards and Deals
The majority of credit cards are loaded with benefits and inducements to use the card. These can include cash back or the accumulation of reward points with each card swipe. These points can then be redeemed for air miles or applied to the balance of your outstanding credit card debt. To help you save money, lenders also provide discounts on credit card transactions.
June 29, 2024
