One of the most important and popular forms of plastic money today is a credit card. It allows you to swipe or make purchases without having to settle the bills immediately. These bills are settled on or before a due date which is generally between 20 to 40 days from the end of the month in which the purchases are made. This credit limit is the biggest reason for the popularity of credit cards.
When you consider applying for such cards, you need to know the benefits from owning one. When you examine a credit card for its features, you can decide which one you want to give priority to and accordingly apply credit card that matches your needs. For example, if you travel a lot, you can consider a card that gives you airline miles or discounts on hotels or train travel.
Following are the benefits:
- Credit limit:
It comes with a credit limit. This means a limit up to which you can make purchases or spends on the card. If you’re a regular customer of the credit card company and you pay your bills on time, then the card issuer can revise the credit limit on your card periodically. It is also possible to pay some dues and avail a credit limit once again in case you exhaust the credit limit.
- EMI purchases:
Holding credit cards means you can opt for an instalment-based purchase system for large equipment like consumer durables which can get quite costly. Many credit card companies tie up with merchants to offer no cost or zero cost EMI which make it very attractive to make purchases through the credit card.
- Credit card points:
This is the biggest benefit from using credit cards. Each rupee you spend on a credit card earns you points. Each credit card has its own system on how it calculates points. These points can be redeemed for vouchers. It can also be converted into airline miles which can be used to purchase airline tickets.
- Balance transfer:
Many credit card companies offer the facility of balance transfers. This is for people who already have some credit card debt on an existing card. Credit card debt accrues an interest at the rate of two per cent per month which can quickly add up and get expensive. To reduce these costs, card companies allow people to apply credit card and transfer existing balance without any interest costs. This debt can be paid without any interest over a period. This can lead to substantial savings.
- Discounts and offers:
Using credit cards means you will get the benefit of discounts and offers. Credit card companies tie up with merchants, restaurants and other companies to provide discounts and offers to their customers especially during sales and other festival periods.
- Expense sheet:
The credit card is an expense record. The credit card bill clearly displays the amount and the merchant or website where the amount was spent.
- Purchase protection:
Credit cards provide protection to the holder in case the card is stolen or lost. There is some form of insurance that covers the cardholder in such scenarios. In case the card gets swiped twice or the transaction fails, the credit card company provides customer support to ensure the charges get reversed.