Why Should You Opt For A Credit Card?

types of credit cards

Published on February 20th, 2023

Due to the simplicity of use and practical pay-back choices, credit cards prove to be an effective option for paying off multiple expenses. When you use a debit card, money is instantly taken out of your bank account, but a credit card provides a line of credit that is to be paid off monthly.

Here are 6 reasons why you should opt for a credit card:

A Credit Card Can Help Boost The Cardholder’s CIBIL Score

The most prevalent misconception about acquiring a credit card is that it will lower your credit score. The only time that your credit score would get negatively affected is when you do not pay off your bills on time. Clearing off your bill payments on time can be an effective way of boosting your credit score, which can be useful while applying for a loan in the future.

Credit Cardholders Can Earn Reward Points

Credit card providers give you specific cashback and reward points on practically every transaction you make based on your card advantages. Credit cards offer various leisure and lifestyle discounts, often available all year long, in addition to store-specific discounts and incentives. Every rupee you spend at physical stores or online retailers earns you reward points.

Several virtual credit cards also provide extended warranties on electronics and other products that are anticipated to be used for a long period. Banks like IDFC FIRST Bank give you the benefit of up to 10x reward points by spending Rs 25,000 or more per month. These points can be accumulated, exchanged for money or miles, or used as a cash reduction on your subsequent billing cycle.

Universal Acceptance

Your credit card can be used anywhere in the world. When traveling abroad, you do not have to waste money changing your currency from INR to USD or another currency. Foreign exchange markups are typically 3.5% + Service Tax and are significantly lower on some premium credit cards, as low as 2%.

These networks enable transactions between banks and merchants, regardless of who issued the cards or where they were used.

These Cards Offer A Grace Period

It is common for credit cards to include a grace period of 30 days or less during which no interest is charged for purchases made with the card. So if you pay your outstanding debt within the grace period or zero-interest period, you can take full advantage of your credit card without extra charges.

Card Bills Can Be Repaid In Monthly Instalments

To prevent your expenses from spiralling out of hand, credit cards also assist you in financing large purchases through EMIs. Additionally, most banks collaborate with different merchants to give the option of no-cost EMI. This exempts customers from paying additional interest.

Credit Cards Offer Travel Perks

Travel benefits include free access to airport lounges, increased baggage limit, priority check-in, and more when using different types of credit cards. Along with the advantages at airports, you may also be qualified for savings at particular retailers on meals, lodging, and auto rentals.

Given all the benefits of using a credit card, you should consider getting one. However, be sure to clear your credit bill payments on time to avoid debt and penalties.

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