Benefits of Credit Cards
In today’s world, it would not be an exaggeration to say that credit cards are more useful than the cash itself. Credit Cards or Debit Cards this plastic money is amazingly useful.
With the boom in e commerce business which has enabled the online shopping is possible through the credit cards (in case we were to not to consider the cash on delivery option). Buying airline tickets, railway tickets, paying utility bills for mobiles, electricity, water is all possible by swiping your credit card online.
Not only that, Indians are increasingly taking to paying their taxes online by swiping their credit cards.
Other advantageous uses of Credit Cards – you may not know
You are only limited by your imagination in counting the advantages of using the credit cards. While it is much safer and easier than carrying wads of cash notes, credit cards are easier to use for purchase transactions – almost anywhere and everywhere.
So much for the benefits of using the credit cards but it is also double edged weapon. In case one is not careful in its use then one can land in serious debt trap which can erode the credit rating of the individual. Many financial advisors recommend the use of the cash or check instead of the credit card.
While there is definitely a reason for such an advice but a bit of care and some planning can let you enjoy many advantages of using the credit cards to your advantage.
Here are a few suggestions
How to Use Credit Cards to Your Advantage
1. Use for online transaction
Online shopping has certainly become a big craze. Not only it is popular with the youth but people of all ages and profiles are shopping online like never before. From dresses to shoes to computer peripherals to mobiles, everything is being bought online 24 x 7. Of course, cash on delivery seems to be the best preferred mode of payment but when you are to choose between using credit card or your debit card then you should opt for the latter.
As this will not only let you enjoy a few days of time gap before you make the payment to the credit card company. Of course, it depends on your monthly payment cycle. Secondly, in case of any technical error while completing the transaction, your account will not be debited with the full transaction amount instantly.
2. Rewards and Discounts
When you are using credit cards properly and smartly you get incentives like Cash back, Reward Points and Loyalty Points. You earn these points every time you swipe your credit card for purchasing goods or services
This essentially means that the credit card company loves you for using their card, they appreciate your timely payment. Therefore, to retain you as their important customer they offer various schemes. To use more of your credit card there are always additional reward point available – which means that you are moved to next level.
These are not gimmicks but real rewards, which if converted into monetary terms will prove the point.
These reward points are dependent on the amount of money spent. Over a period of time, after collecting specific number of reward points, the user is able to redeem them for attractive things given in the catalog.
Quite a few premium credit cards come with built in perks such as free use of airport lounge as a privileged customer of the credit card company, free welcome drink and special room tariff at the designated hotels.
4. Better Money Management
If you plan your purchases beforehand then the credit card lets you be a careful spender. Not only can you avail of the discount offer which the credit card companies or the seller keep offering from time to time but you enjoy the interest free credit period also.
Most of the good credit card companies let you track your history of spending online. That way you can analyse that over a specific period (say a quarter or an year) what kind of purchases have you been doing and if there is any lesson to be drawn. For example, I found that over a period of 12 months 40% of my spending was on electronic items, 20% on clothing and accessories and 25% on utilities. This clearly showed my extra ordinary interest in the gadgets – although the overall amount was not very big. This data can be very handy for budgeting personal purchases if husband and wife are using separate cards.
Also in case of corporate cards, the finance department can easily do the expenses analysis of the individual executive and also of the department and study the trends.
5. Quick Money
Need money? It is a bank holiday or bank is far off. Just go to the nearest ATM and you can draw cash.
Nowadays, you can even transfer money using your credit card to your near and dear ones. Is it not a simple and easy way to get money instantly?
So when are you going to apply for a credit card?
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