Credit Cards have long been perceived as a convenient way of paying for the things that you want. Besides being a great convenience, Credit Cards facilitate quick access to funds whenever you need them. However, you need to be a bit disciplined while using them, or you could find yourself in a lot of credit pain.
By exercising a little bit of caution, and by using Credit Cards responsibly, you can benefit from this plastic money in more ways than one. By leveraging your Credit Card’s features and perks, you not only have the chance to improve your credit rating but also earn some lucrative cash-back, valuable reward points, travel incentives, etc. in the bargain.
Listed below are six solid reasons why you should be using your Credit Card for your expenses.
Gives you better protection
As compared to Debit Cards, Credit Cards offer more robust purchase protection and safeguard you against potential card theft scenarios. If you happen to break or misplace your Debit Cards, you ought to get worried as it is directly linked to your bank account. A suspicious activity on Debit Card possesses a lot of risk.
Credit Cards, on the other hand, handle any disputes on your behalf. In fact, if you report any suspicious activity immediately, the company will block the card and even reimburse you for any purchases that went through the stolen card. Further, if the credit company sees some unusual or questionable activity in your account, they will immediately contact you to check if the activity has been authorized by you which serves as an added safety measure.
Automated billing benefits
An often overlooked convenience that Credit Cards provide is that you can set up automatic bill payments for your utility bills. Be it an electricity bill or mobile bill, you can pay all your recurring bills without having to remember the due dates every month. Further, by setting up automatic payments, you can mitigate the risk of missing a due date. A late payment entails late fee which should be avoided in all cases.
You can avoid carrying a lot of cash. Carrying a lot of cash is as good as inviting trouble. Be it travelling on a train or going out on a holiday, criminals are always on the prowl waiting for the opportune moment to make away with your valuables. The truth is that the more money you carry in your wallet, the more you stand to lose.
If you’re travelling abroad, it takes the pain of looking for an ATM to make a withdrawal and paying ridiculous withdrawal fees to access your own money. Needless to say, Credit Cards provide a far convenient alternative to making purchases. They are accepted at thousands of merchants worldwide thus helping eliminate the risk of travelling with cash in person.
Helps in building your credit history
Just about everyone today needs a good credit score. If you’re looking out to buy a house, apply for a Car Loan, or for more Credit Cards with better benefits, your credit score will be thoroughly analysed and based on your rating, your loan will be granted or declined. If you’re looking to build your Credit Score, one way of doing so is by using your Credit Card responsibly. Making all payments on time and staying under your credit limit can help you gradually build a good credit score. On the other hand, using a Debit Card has no impact on your credit history at all. Even if you have had a bad credit history, you can start working towards rebuilding your credit score by being rational and spending responsibly.
Helps in earning rewards
Using your Credit Card gives you access to all sorts of rewards and perks. There are several types of Credit Cards which give you a bunch of incentives to swipe by way of reward programs. Depending on the card, you can earn cashback, frequent flyer miles, complimentary lounge access at Airports, food and movie vouchers, free stays in hotels, discounts on dining in restaurants, and even free golf lessons. Simply put, the more purchases you make through your card, the quicker the rewards points add up. Some Credit Cards even give you handsome joining bonuses in the form of extra reward points. Bajaj Finserv Credit Cards, for instance, give you sign-up bonuses in the form of 20,000 reward points. As long as you make it a point to make a full payment every month, those extra rewards you earn can prove to be a boon.
Helps in tracking your spending
Credit cards facilitate an easier way to track your spending while also helping you establish good payment habits. Using Credit Cards judiciously can indeed help you track your spending while ensuring you keep your budget on track. Since every purchase you make is recorded in your Credit Card’s statement – which can be easily accessed online – you can easily track where your money is going. In a way, you can possibly control certain expenses. Credit Cards leave a paper trail which enables you to run all your expenses through your Credit Card account and ensure you’re not straying off track. Paying by cash, on the other hand, can often lead to frivolous spending, which can make it difficult to trackback.
The Bottom Line
While using Credit Cards can have a lot of benefits, it’s imperative that you fully understand the pros and cons before using them. When used responsibly, Credit Cards can help you stay in control of your entire financial life. All you need to make sure is, you don’t end up overspending and landing up in debt.