A credit card is a form of a loan which helps you to borrow a certain amount of money from the bank. Once you pay that on your scheduled date you are not charged any interest on that borrowing. There are a plethora of advantages of credit cards. Through this post, we want to share the importance of having a credit card so, stay tuned.
A credit card is generally used to make purchases, balance transfer, and pay cash in advance. While using a credit card, you have two options. Either you want to pay the whole borrowed amount or a minimum balance before your due date. If you use this card responsibly, it can help you to get loans at favorable interest rates and earn rewards on several online purchases.
These are the 9 Advantages of Credit Cards
1. Signup Bonuses
One of the biggest advantages of credit cards is a signup bonus i.e. joining bonus. Many of the cards have annual fees system but luckily plenty of cards do not have annual fees but still offers rewards and signup bonuses. Signup bonuses are the quick way to earn bonuses worth $50 to $200 or sometimes even more. If you are not using the rewards that the credit cards provide you, then I must say you are missing out on something. As you can earn rewards and bonuses on purchase.
2. Rewards and Points
Uhmm! Everybody gets excited after hearing this word, isn’t it? Many credit card rewards work on point to point system where you earn 5 points per dollar spent. Often companies also provide special offers for 3 months or on festivities season where you get the number of points on spending in a certain category like food or traveling.
But, your credit card rewards are endless. You just need to choose the card which best fits on your monthly spending. Get anything whether it is a co-branded card issued by a gas station, a non-profitable organisation, your reward will increase even faster. The credit card offers you the discount, rewards, cash back, and many more things.
Also, Read | 10 Tips To Secure Credit-Debit Cards Transaction
3. Cash Backs
Other advantages of credit cards include the cashback feature. If you own a credit card, you can get about 1% cashback of your total expenditure regardless of where and what you bought. The idea of providing cashback was first introduced in the USA. Nowadays companies are offering 2%, 3% cashback or even more.
In this world, everybody wants to ensure safety related to these electronic cards. As cyber threats have become so common, credit cards security is the utmost priority. Paying with a credit card makes it easier to avoid losses from fraud and cybercriminals.
When you lose your debit cards and by mistake, it goes to the wrong person, the money can be misplaced from your account instantly. It can take a while to reverse your fraudulent transaction and money to restore. But, in contrast, when your credit card is used by the fraud person, you just need to inform your credit card company. You no need to pay for the transactions which you haven’t done until the credit card company resolves the matter. So, you are always at ease and not bothered about hacking or loss.
5. Trackability of Credit Cards
This credit card features can help you identify frauds by tracing them. The electronic record-keeping is the technology in credit cards which make it easy to track them. However, do not be in a misconception, the tracking feature doesn’t mean that you can track it physically.
One of the best advantages of credit cards comes into picture when you come to know that your cards are insured just like a car, and health insurance. I am assuming that you guys already know what insurance is? But, this is for those who don’t know: An insurance is an arrangement by which a company provides a guarantee of compensation on specified loss and damage of a particular product.
7. Universal Acceptance
Do you know that credit cards are universally accepted? You can use credit cards to pay almost anywhere and at any time. Certain purchases are difficult from debit cards but it is not difficult from credit cards. When you want to rent a car or want to travel to another country, you will have an easier time if you pay using credit cards.
Even several companies prefer credit card payments because they can easily charge for any damage caused.
8. Options for Better Exchange Rates
Two years ago, I and one of my friends went to Thailand for an internship. I exchanged my money into Thailand currency from India using my father’s credit card. You won’t believe me but, I got much better exchange rates. On the other hand, my friend had planned to exchange the money from the airport, trust me his exchange rate was very high. Thus, use travel-friendly credit cards to avoid the extra cost.
9. Building Credits
Paying timely build your credit score which helps you alot when you apply for any loan. Generally, banks check your credit scores from credit bureaus. You just need to pay the bills on time each month and credit card company will report your payment to credit bureaus. If you are paying on time, then you don’t need to pay any interest. Your payment history will make up to 35% of your credit score.
There are times when money is a simple solution to an emergency. If you get hit with an unexpected expense, credit cards can be the quick and easy solution you need. Responsible use of a credit card will provide you many benefits. I hope now you are aware of the advantages of credit cards. Do have them and make your life a little technology-friendly.
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