Using Credit Cards, You Can Find These 5 Big Benefits
Credit Card: According to the central bank RBI data, credit card transactions are increasing at ATM and shopping centers. These figures show that credit card users have increased but still many people shy away from having a credit card due to excess spending and debt trap. However, if the Credit Card is used wisely it can prove to be very beneficial for you. The credit card does not only provide freedom from the problem of cash but also has some special advantages. Let’s know about some of these special benefits that you should end up hesitating in adopting a credit card.
Helping to Build a Strong Credit Score
The credit card transaction is in a way lending, so the credit card dues are equal to the repayment loan. Just like your credit score is prepared based on the loan payment, the credit score is also there. Although there is no interest to be paid in the credit card for a period of time, credit card is a cheap and convenient way to create a credit score.
You can complete the dues of your credit card in a timely manner and prepare a strong credit score by keeping credit utilization ratio between 30-40 per cent. When you have a high credit score, you are more likely to get loans at low interest rates.
Advantages of Reward Points and Cashback
You get the benefits of reward points, gift cards and vouchers on the use of a credit card. Due to all these offers, your total cost decreases after transacting through a credit card.
Reward Points, Discounts, Cashbacks, Vouchers and other similar benefits should also be taken care of when choosing a credit card instead of selecting credit card on the basis of Annual or Renewal Fee only.
Keep one thing in mind that you can also redeem Rewards Points from time to time because most credit cards also have an expiry date.
No interest on credit card transaction for some time
When you pay a bill with a credit card, you get an interest-free period for the repayment. You do not have to pay any interest during this period and during this period, you can repay your entire dues without any extra expense. This period is between 18 days and 55 days. It is prudent to spend big on the card’s billing cycle early in the day because you get more free interest-free period.
Convenience to convert large expenses into EMI
Due to the lack of cash, the purchase of expensive goods like laptops, televisions or smartphones can sometimes be pended for a long time. In such a way, the EMI facility of credit card is a big task for you.
In this, instead of spending a lump sum amount on your large expenditure, you get time till 3-48 months instead of paying a little by EMI. You have to pay interest at 1.5 per cent monthly rate on this.
However, sometimes you do not have to pay any extra interest on this. Banks also give you the option of EMI to repay the outstanding credit card balance. You can get up to 60 months of this time.
Approved pre-approved loan immediately for emergency
Credit card holders also get pre-approved loans even when they are incidental. However, for this you should have good records that you have been paying the old bills on time.
There is no documentation in pre-approved loan, due to which it is processed as soon as possible. Sometimes it is found instantly and sometimes only takes a few hours. However, on such loans, a personal loan may have to pay interest at a higher rate.