What Benefits Do You Get When You Own A Credit Card?

A credit card can be a double-edged sword; it has positives and negatives. For example, people in India generally fear credit cards because of the high rates of interest that the bank could charge. Still, they often fall into the trap because they don’t think before spending the money that won’t have to be repaid later when the credit card bill arrives. But if people start using a credit card wisely, there can be many benefits which they can get from it.

1. Easy cash flow

You can maintain an easy cash flow by using a credit card on your daily usage. For example, if you have an expense of Rs.40000 per month and your monthly income is Rs. 1 lakh, you can use your credit card for that expense of Rs.40000, which will be the bank’s money, and still have the 1 lakh for that month and invest it somewhere for a short period and earn profits on it. Then, when the bill arrives next month, you can pay the bill in total and still make a profit.

2. Improves credit score

The more you shop from your credit card, the more you can earn a credit score from the bank because banks always try to reward their customers if they use the credit card properly and pay bills on time. So, the credit score is the primary reward you get, and you can use those points to redeem different products and offers. Their websites generally list all these offers and bonuses. So you can plan how much you want to improve your credit score and then redeem your offer.

3. Instant Loan

Every credit card user has a credit limit to spend for a month. Banks assign credit limits to users per their accounts’ cash flow. For example, if your credit limit is Rs. 2 lakh for a month, you can get the entire amount from your credit card without affecting your bank account. It’s instant loans that you can get for a month without any interest, but if you fail to repay the entire amount the next month, you can get charged with high-interest rates.

4. EMI’s and discounts

Shoppers who prefer online shopping can find many offers from Amazon, Myntra, Flipkart, etc. They usually have 5-10 % on specific credit cards all over their website. Also, many no-cost EMI options are available for different products like Television, Fridge, oven, etc. Moreover, there are festival sales on these websites where you can get a no-cost EMI even up to 6 months! Therefore, it can help you buy products without spending considerable money on the spot.

A credit card user should keep one thing in mind to use a credit card correctly and avoid going into a high-interest rate debt. That is to spend the money they already have because you can’t depend on the future. If you cannot arrange the amount you have paid through your credit card, it could be a problem.