Why Should You Use A Credit Card

A credit card is a financial instrument issued to you by a bank or financial institution that lets you make large purchases on borrowed funds in a cashless manner. The card comes with a predefined credit limit. As a credit card user you are expected to carry out hygienic repayments within a duration that you and the credit card provider have mutually agreed upon (generally 45 days).

There are various types of credit cards available in India. These are student credit cards, corporate credit cards, gold credit cards, silver credit cards, etc. that cater to people who fit into various credit card eligibility criteria. These credit cards can help you maintain your credit score, win rewards and enjoy a plethora of other benefits.

7 Reasons Why You Should Use a Credit Card

Since it is crucial to have a good credit score to make the rest of your financial life a breeze, a good repayment history created by your credit card company can help you enhance your credit health. Responsibly using a credit card could set you up for life. Let’s take a quick look at why opting for or using a credit could be a good decision for you.

• Stepping Stone

Let a credit card be the foundation stone of your financial journey. As you’ve already seen, a credit card is your best bet at building good credit health. This can open an ocean of opportunities for you to fulfil your dreams. A credit card could seem trivial, but it can give you access to borrowing power, financial discipline and so much more at the very beginning of your career. There’s no better and easier way to brighten your financial future than using a credit card.

• Rewards and Cashbacks

A credit card is not a vicious cycle of debt and repayment like most would like to believe and could offer you amazing rewards and cashbacks. You can accumulate reward points and cashbacks by shopping and making payments at various merchant stores/sites. Cashback can directly affect your bill by decreasing the total amount payable by you at the end of a billing cycle. Whereas rewards can be redeemed as vouchers, air miles, gift-cards, etc.

• Joining Bonus

Your brand new credit card could give you a great joining bonus(es) in exchange for spending a particular amount or if you possess an already excellent credit score. You have the freedom to redeem these bonus points for any purchase you make. Like reward points, the redemption of such bonus points can also provide you vouchers, gift-cards, discounts, and more!

• Insurance

Many credit cards offer inbuilt insurances such as accident insurance, travel insurance, purchase protection, life insurance, etc. Not only does a credit card increase your ability to make bigger purchases, it also increases your ability to protect yourself from financial losses.

• Security and Safety

There’s one thing you as a credit card holder must keep in mind. Every detail regarding every transaction you make is recorded and monitored at all times. This not only motivates your repayment hygiene, but also makes sure that other stakeholders of that transaction are under scrutiny as well. There’s no room to be deceived by anyone.

Additionally, if your credit card is stolen, a quick ticket-raise with the credit card provider should help you block any potential transaction occurring from that point onwards. Safety and security are prioritised when it comes to the usage of credit cards.

• User Privileges

A credit card can help you upgrade your lifestyle by providing you with various privileges that you as a debit card user cannot usually access. Certain credit cards can allow you exclusive access to airport lounges, while some help you subscribe to OTT entertainment platforms for free. You can also get the chance to buy flight tickets or holiday packages for domestic and international trips at discounted rates because of the credit card you use. The opportunities are endless.

• Credit Growth

Credit bureaus, like the very widely known TransUnion Credit Information Bureau (India) Ltd. (CIBIL), are sent reports by credit card companies that chalk out your payment behaviours. These financial habits are used to build a report to define your credit score or CIBIL score. Debit cards seldom contribute to the dynamics of credit reporting or CIBIL scores and here’s where the credit card can be your best friend.

The efficiency of a credit card runs a lot deeper than just this. It helps you kickstart your financial life by helping you build your first set of credits. It gives you access to larger spending limits, assisting you with handling any unforeseen crisis. It is a safe and secure way to carry out transactions of all magnitudes. Not only is a credit card your ticket to larger spending power, but it also promises you rewards, bonuses, insurance, special privileges, and so much more no matter the credit card eligibility criteria you fit under. A credit card can be the jetpack that speeds you towards financial safety and growth.