The use of credit cards has now become an undeniable part of our lives because of the convenient pay later and ease of use option it provides. The discounts, offers, deals that a credit card can provide are unmatched by any other financial instruments and the magic it creates for a wise user. Even so, the use of credit cards can easily turn troublesome and put you in a debt trap if not used correctly, or by expending more than you can repay later the moment the bill reaches youbank of indiabc agent.
If you’re new to this world, then go through these few advantages mentioned in details below; it will help get a better understanding of what you should doing with your credit card:
- Easy access to credit- the most prominent advantage of a credit card is easy to access to credit. Its unique function allows you to make a purchase prior to and pay later for the purchase. The money used in transactions made through a credit card does not go out of your account, thus not causing any dent in your bank balance every time you make a swipe.
- Building a credit line- Credit cards allow you a chance to make a line of credit. The significance it has is great, allowing the banks to view an active credit history based on the usage of your card and repayments.Banks and other financial institutions always try to check the credit card usage to estimate a potential loan applicant’s creditworthiness making your credit card important for your future if you’re planning for any loans.
- EMI facility- when you’ve plans to make a big purchase but also don’t want to use money from your savings, there’s an alternative for you to do the transaction through your credit card. On top of this, you can also opt to pay off the purchase by making payments partly in equal monthly installment,this helps in relieving the stress of having to make a lump sum payment and have a dent in your bank balance. Paying through EMI is better and cheaper than going for another loan to make a former payment.
- Incentives and offers- A lot of credit cards come with lucrative offers and incentives for users. Which ranges from earning cashback and accumulating reward points every time the card gets swiped for making a purchase, and this latter can be used to clear off any outstanding card dues. The lenders also provide good discounts when credit cards are used to make payments.
- Flexible credit- Credit cards give you an interest-free time frame, in which the credit card does not charge you with interest on an outstanding amount. The time frame usually can range from 45-60 days. You can also avail of short-term credit if you pay up the outstanding due in full before the bill’s due datebank of indiacsp.
- Record of expenses- the monthly credit card statement holds all the recorded purchases made through a credit card. This becomes helpful in tracking down purchases and payments to keep tabs on your spending. Which later can help you in various ways, one being informing out a budget for yourself. When you swipe a credit card to make a purchase, you are provided with an alert regarding your available credit balance and outstanding balance.
- Purchase protection- Additionally, cards also provide the users with insurance on purchases made by the card if it gets lost or stolen. The statement of the credit card can be used as proof to make an insurance claim.Now you can see how lucrative the use of credit cards can become and how useful it is and how easily it can turn dangerous if used recklessly and without proper knowledge.
10 big advantages of credit card; Many extra benefits are available with discounts
credit card benefits: Financial transactions through credit cards are common in today’s time. Credit cards are being used indiscriminately for all kinds of purchases. This is such a facility, which if used wisely, can be very beneficial. From movie tickets to car purchases, you can easily do it with a credit card. Let’s know about 10 benefits of credit card.
ease of payment
Through credit card, your payment is done on just one swipe. You do not need to count cash or cut cheques. If you have a credit card in your pocket, then you do not need to carry much cash. If you want, you can link the credit card with the digital wallet. Through this, now without a card, you can scan the wallet and pay.
Ease of recurring payments
Apart from one time payment at merchant shop or online, you can also make recurring payments through credit card. For this, you can set your credit card automatically for payment. With this, every month your phone, electricity or gas bill will automatically be paid on time. Its advantage is that there will be no default in payment, so that you will not have to pay any kind of penalty.
Ease of recharge and ticket booking
You get the most ease with the credit card in the payment of online services. For example, you have to book flight tickets or recharge your mobile, even if you do not have sufficient balance in your account, you can pay for them.
Benefits of interest free credit
There is a grace period between purchase and payment by credit card. This can be up to 50 days. During this, the bank does not charge any interest from you. Its advantage is that if you want to make a big purchase, you can do it easily. This is the perfect example of Buy Now and Pay Later.5/10
Will get the benefit of rewards
Pay with credit card, usually get rewards. You can redeem the rewards for gifts or vouchers like free shopping trips or free flight tickets. In this way your saving is done.
Cashback & Discounts
Discounts and cashback are available on various types of payments such as credit cards. For example, fuel surcharge is not required to be paid on payment of fuel through credit card of many banks.
Can keep track of expenses
Using a credit card is also a benefit that you can keep track of your expenses every month. Through the credit card statement, you will be able to know where and how much you are spending.
keeping credit card more safe
If you are traveling anywhere, it is safer to carry a credit card instead of carrying heavy cash. If somewhere you forget or steal your credit card, you can complain to the bank and block it and get another issue done.
Credit score gets stronger
Better use of credit card also strengthens your credit score. Most people are not aware of this, but a credit card can increase your credit score. Institutions like CIBIL give credit scores to people. It depends on your payment history how active you are regarding the payment. If you pay the credit card bill on time, then it increases your credit score. A good credit score will help you to avail loans easily when you need them.
extra benefit
You also get many other benefits on the credit card. For example, in today’s time, term insurance or accidental death cover is available on almost every bank’s credit card according to its category. There is no need to pay any premium separately for this.
Everything you need to know about credit cards
Credit card is a very useful thing for the common man and most of us also use it. Some people use it with open eyes and some use it without thinking. If it is used properly then it is a boon and if you do not know how to run it properly then there is no bigger curse than this.
What is a credit card: A credit card is a card provided by the bank, with the help of which you can buy goods on credit or pay bills online up to a certain limit from the market. Its bill is generated on a certain date and within 20 days you have to pay the bill.
How to use it: PIN number is necessary for cash or payment through credit card. One time password is required for online payment by credit card. On the lines of debit cards, credit cards also have special details for safety.
There is a 3 digit CVV number on the back of the credit card and the CVV number is essential for online shopping. Credit cards have an expiry date and transactions cannot take place without the credit card pin number.
That’s why you must have a credit card: This card is of great use to the working class. With this, you can handle all the important tasks from filling petrol. People use credit cards for many important tasks ranging from shopping. While paying with a debit card, the payment amount is directly deducted from your deposit account, but this is not the case with a credit card.
What are its benefits: If you use the internet and do online shopping and transactions, then this card is very useful for you. You can buy any item by paying online. You also get a discount on this and also time to pay the money.
Apart from this, you can also pay your telephone, mobile, electricity bill, insurance policy premium etc. through credit card. If you do not have enough money to make the payment, then the next month’s bill can also be paid by paying the minimum balance.
For this, you will definitely have to pay a financial charge, but your budget will not be disturbed.If you suddenly need some money and you come to know that you do not have that much money in your bank account. Don’t worry You can avail a loan up to a specified amount through an ATM machine or online credit card. Not only this, you can also repay the loan through EMIs by choosing the tenure as per your convenience.
What are the disadvantages: Credit cards have as many disadvantages as they have. It is often seen that we like something which is out of our budget to buy immediately. In such times, people often resort to credit cards.You do not get any message to deposit the credit bill, because the company does not want you to make the entire payment in the first month itself, rather the companies want you to delay more and pay the late fee later. Terms and conditions apply on zero percent interest, EMI as well.
Credit card charges annual fee: Credit cards also charge you an annual fee. Silver, Gold, Platinum etc. each credit card has a different annual fee. If you upgrade the card to increase the limit, your annual fee also increases.
Pay on time: Credit card users must pay their bills on time. Many times a person manages to pay the minimum amount, but in return he has to pay heavy financial charges. Charges form a major part of the minimum balance and due to lack of information, the person remains cheated.
Documents required for Credit Card-
The credit card applicant should thoroughly verify his/her documents before applying. Following is the list of documents required by a credit card applicant.
Identity proof – PAN card, Aadhaar card, passport, voter ID card or license should be in the form of identity proof.
Proof of Address – At least 2 months telephone bill, electricity bill, bank statement, ration card, passport, driving license, voter ID card, or rent agreement etc. should be one as proof of address.
Income Certificate – In the form of income certificate, the salaried person should have 3 months salary slip and 6 months statement for salary account. If the applicant is self-employed or businessman, then he should have proof of continuity of his business along with proof of his income.
Age certificate – For age certificate, the applicant should have birth certificate, Aadhaar card, voter ID card, passport or high school certificate of any secondary school.
What is the benefit of Credit Card?
The biggest advantage of a credit card is that the bank can borrow some amount of money from the credit card holder and with the help of that amount, he can easily pay any kind of bill.
In how many days the credit card bill is paid?
You have to pay your credit card bill every month. Otherwise you will have to pay additional charges.
How can I get a Credit Card made?
If you want to make a Credit Card, then you will have to go and apply for a Credit Card.
How much interest is charged on Credit Card?
Credit card holders have to pay the bill along with interest at an average rate of 3% per month.
Will closing credit card affect your CIBIL score?
If a cardholder has more than one credit card and wants to close one of them, the available credit limit will come down. Due to this, his credit utilization ratio will increase which will definitely have a negative impact on the CIBIL score of the cardholder. If a cardholder has only one credit card and he cancels or closes it after paying all the dues, it will not affect his credit score.
