A credit card is plastic money issued by financial institutions like banks, which allow you to buy Now and pay Later. Even though the uncontrolled use of a credit card can land you in a loan trap, using it wisely has lot of benefits.
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These are some of the benefits of using credit cards.
One of the biggest advantages of using the credit card, is it helps you convert big-ticket purchases like laptops into affordable EMIs. Credit Card issuers charge for conversion to EMIs. Tenure of such EMIs are in the range of 3 months, 6 months, 9 months and 12 months. Usually, credit card companies have tie-ups with merchants, to offer the EMI facility on purchases made through credit cards.
Credit card companies and banks allow you to purchase a variety of items with your credit card via EMIs. But, most of the issuers do not give you this facility to make EMI payments for gold purchases.
Credit card companies offer you attractive reward points and cash backs, if you make purchases with your credit card. This is done to promote regular use of the credit card. For instance, HDFC Bank gives 3 reward points for every Rs 150 spent using your credit card. Reward points which you get can be redeemed to purchase goods from partnered stores.
Credit card companies also provide you cash backs, if you use your credit card to pay monthly bills or to purchase certain items.
Credit cards help you improve your credit score. Every bill payment made by you on your credit card, will be reported to credit information companies like CIBIL.
Paying using credit cards are just like loans. Repayment of credit card dues have the same effect as repayment of loans. If you pay your credit card bills on time, your credit score will improve gradually. This can help you avail loans easily in the future.
On other hand, if you do not pay your credit card bills on time, your credit score will do down. Never default on credit cards.
Credit cards offer you interest-free periods. If you make the repayment within the billing cycle + grace period, you enjoy interest-free periods. With credit cards, if you make a transaction today, you get 50 days which includes the grace period to pay the bill, assuming today is the start of your billing cycle. This is very useful if you are making big purchases.
Loan against credit cards are just like personal loans, but don’t require any documentation. This loan is offered to those with decent bill payment history and a good credit score. Even though the personal loan is the quickest option for availing loans, it requires time to process. Loan against credit card will be disbursed instantly. If you are looking for quick money, you can go for a loan against credit cards. Avail loan against credit cards, with interest on par or slightly higher than personal loans. Be Wise, Get Rich.
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