A credit card is a product by which you can get a credit of maximum 50 days from the bank without any interest. You can use a card for your daily expenses from groceries to paying traveling expenses. Here are 5 reasons why credit cards are good.
A credit card can be used as contingency amount. If you have any medical emergency you need the money to pay hospital bill and pay for other expenses. A credit card can be a real savior of you in that situation. Though it is good to have a medical insurance in place a credit card can also give you some time to arrange the money.
Interest free period
A credit card gives you 50 days credit period. You spend the money with the credit card throughout the entire month. After that bill is generated and you get another 20 days to repay the credit card bill to the bank.
With this credit period, you are also saving some amount on your purchases. If you are purchasing a big ticket item such as an air conditioner, a television etc. you can save by paying through credit card.
When you pay though credit card you earn reward points on your spending. Some of the credit cards give 4 reward points for every Rs 100 you spend. You can redeem the reward points to earn gift vouchers or products from reward catalogue.
You accumulate the reward points and redeem on the products which you want.
Offers & Discounts
Most banks have a tie-up with stores and e commerce companies to promote their product. You can avail the cashbacks and discounts on purchase of various products. The online travel companies are also giving discounts when you book the ticket though credit card.
Some companies are giving EMI facility to credit card holders. A big amount can be converted into EMIs of your choice. Suppose you have bought a big ticket item and cannot arrange the money to pay the bill. You just convert the large amount to an EMI which you can afford.
A good credit history is important for an individual to take credit from banks and NBFCs. Banks prefer a credit score of at least 750 to extend the credit to a customer. When you pay your credit card bills in time, it certainly increases your credit score.
Also, you can check your credit score free once in a year.
So a credit card is a good product when you use it properly. A controlled expenditure on credit card gives you handful of benefits. So start using credit card and ensure to pay the bills in time.