In simple words, we may say that a credit card is a loan that you take from a bank to purchase something. The item may be things of everyday use like gas, groceries, electricity bill, etc. It can also be some big-ticket item like an iPad, jewelry, or a travel package, the funds for whom may not be readily available.
The credit card agreement will specify the rate that you will pay if interest charges accrue. This rate (also known as the annual percentage rate or APR) will vary from person to person. Factors such as your credit history, credit score, and the type of card involved will have a role to play here.
Now, despite all the commotion, using it has a lot of advantages. Here, we shall throw light on some of the key benefits of using it.
Several credit cards offer a safety net in case of theft or damage to the card. The bank sends the customer an alert in case of any potentially fraudulent activity. The alert may be sent via a phone call, text message, email, or a combination of all of these.
In the case of fraudulent activity, the bank can stop the transaction right. Moreover, your card is not linked to any savings account. So, not even a thief can get hold of your card as they can’t access the money from it.
Beneficial when traveling
Irrespective of whether you are making a national trip or an international one, credit cards will come in handy when traveling. Firstly, shops and malls do not prefer accepting debit cards from other countries.
In some cases, you may even be denied service. With credit cards, chances of running into such scenarios are lesser. Moreover, rental services (including bikes, clothes and hiking equipment rentals) or hotels prefer accepting credit cards. Also, if you run out of cash in your savings account while traveling, the easiest way to get money would be to withdraw money from your credit card account.
Credit cards offer good rewards to its users. The reward may be in the form of discounts on certain platforms, travel miles, or cash back. People who use credit cards regularly find themselves accumulating more points. These points can be used to purchase things that you would otherwise already buy. That way, you will be able to cut down on your overall expenses.
In some cases, the rewards are in the form of cashback wherein a percentage of the money is credited back to you. The type of rewards may vary depending on your banking part and the type of card that you are using.
However, in almost all cases, there will be some form of reward for using the credit card. However, in almost all cases, there will be some form of reward for using the credit card.
Although a credit card is a great financial instrument, you must use it with a grain of caution. Also, you must never bite off more than you can chew, because credit card debts and high interest rates can accrue over time and might as well outlive you. Ever wondered what happens to your unpaid debt after you are gone? ”
There are millions of other reasons why using the card will be advantageous to you. But, at the core of card usage lies the principles of self-discipline and financial maturity. If a card is not used wisely, you will end up incurring more financial losses than gains. Thus, it is a personal decision on how you can make the most of your credit card and utilize it in your favor.