Top 10 Benefits Of Using A Credit Card In India

Credit cards dominate the digital transactions arena. Apart from convenience, credit cards offer various other value-added benefits like loyalty rewards, cashbacks, merchant discounts, airport lounge access and many more. Continue reading to explore the incredible benefits of credit cards.  

Credit Cards Snapshot

 

For decades, India was a predominantly cash-oriented society. Of late, there has been a surge in digital transactions. Today, a vast majority of people own a debit or credit card. Most of us hold more than one plastic card and reach out for it, to pay for our daily transactions.

Yet, even today, not many people are aware of the multitude of benefits offered by credit cards. Besides the convenience, credit cards offer various other benefits to the cardholder. In this article, we list the top benefits of owning a credit card.

Table of Contents

• Key Benefits of a Credit Card 
  • Convenience
  • Buy Now, Pay Later
  • Build your Credit Score & History
  • Safe Contactless Payment Method
  • Pay Utility Bills and Other Recurring Payments on Time
  • Online Shopping on Domestic and International Websites
  • Safe and Secure
  • Rewards, Cashback and Loyalty Points
  • Other Miscellaneous Benefits
• FAQs

 

Key Benefits of a Credit Card 

Let’s examine the reasons why owning and using your credit card provides various benefits: 

1. Convenience 

The biggest advantage of using a credit card is the convenience it offers. You don't have to carry around wads of cash to pay for your daily transactions. Instead, you can complete your payments – big and small – with a simple swipe of the card. With a credit card, you don't have to worry about finding the right bills, counting change. All you have to do is present the plastic card to the cashier, and you're billed the exact amount.

2. Buy Now, Pay Later 

This is another huge advantage of owning a credit card. Using a credit card, you can purchase big-ticket items that you cannot afford to pay out of pocket. Let's say that a new mobile is launching today, but you receive your salary only after ten days. You can use your credit card to complete the purchase today, and pay for it later, once you receive your salary.  

Additional Reading: What Is A “Pay Later” Service & Can A Pay Later Purchase Impact My Credit Score?

All credit cards offer a grace period between purchase and payment when you do not incur interest. The grace period is generally 30 days, but it can also extend to 50 days, depending on the card issuer. When you settle the credit card bill within the grace period, you will not be charged any interest in the purchase.

3. Build your Credit Score and History 

Not many people are aware of this benefit. Having and regularly using a credit card responsibly is a great way to build and improve your credit score. The credit score is a numerical factor that indicates the creditworthiness of an individual. Depending on how prompt you are on your credit payments, your credit score increases or decreases. The higher the credit score, the better are the credit opportunities available to you. 

When you use your credit card responsibly (i.e., stay within your credit limits and pay credit card bills on time), your credit score improves significantly. This is one of the exclusive benefits of using a credit card that is not available on a debit card or when you pay cash.

If you’re looking to build your credit history from scratch or repair a poor credit score, then you need to start using a credit card responsibly. 

4. Contactless Payment Method 

Today, most credit cards come with the option of contactless payments. This means you can pay by just tapping your card on a contactless payment machine. You don't have to enter a PIN or provide your signature.

During Covid-19, everyone is worried about contracting the virus by handling cash or touching hotspots like Point of Sale machines. With a contactless card, you can complete your purchase without touching potential virus hotspots. 

5. Pay Utility Bills and other Recurring Payments on Time 

Besides the convenience offered by credit cards for one-time transactions, they are highly suitable for recurring payments. You can set up a standing instruction to pay for recurring bills like – electricity bills, telephone bills, gas bills, home rent, etc. – using your credit card. This way, you don’t run the risk of forgetting to pay your bills on time, thereby eliminating late fee charges. 

Additional Reading : Should You Pay Utility Bills Using Your Credit Card 

6. Online Shopping on Domestic & International Websites 

Today, it's common to use online shopping portals for various purposes. From purchasing apparel to groceries to booking a flight ticket to buying home furniture, online shopping is highly convenient and cost-effective.

Though most online shopping websites offer a range of payment options like cash on delivery (COD), debit card, digital wallets, for big-ticket purchases, you have limited payment options. A credit card can be used to pay for the purchase when other payment options like COD aren't available. 

If you're shopping on an international website, then your debit card is not likely to be accepted. In such cases, having a credit card will help you complete the purchase effortlessly.

7. Safe and Secure 

With a credit card, you don’t have to carry large amounts of cash in your wallet. You don’t have to worry about safeguarding the money or keeping your pocket from being picked. 

In the unfortunate case that you lose or misplace your card, you can easily connect with your bank via a 24x7 helpline number. Notify your bank of the lost card, and they will immediately cancel the card, preventing any unauthorised use.

8. Rewards, Cashback, and other Special Offers

All credit cards are part of a rewards program. This means, for every transaction you make using the card, you earn rewards. You can then redeem the accumulated reward points for vouchers, trips, and other exciting gifts.

Besides reward points, credit cards also offer other benefits like cashback, access to online shopping deals, discounts when you use the card at selected online, and offline retailers.

9. Travel Perks 

Owning a signature (elite) credit card offers various travel perks like access to airport lounges for free of cost, extra luggage allowance, priority check-in, and more. Besides the benefits at airports, you are also eligible for discounts on hotel stays, car rentals, and dining – at select merchants. Check with your card issuer for the list of travel perks that come with your card.

10. Other Miscellaneous Benefits 

Besides the benefits mentioned here, credit cards offer various other perks like – accidental death cover, fire insurance, and more, depending on the type of card. To be eligible for insurance coverage provided on your credit card, all you have to do is meet the minimum spending requirements annually. You don't have to pay any extra premium.

Credit Cards are a Powerful Financial Tool

Contrary to common beliefs, credit cards are not to be feared. Most people stay away from using credit cards as they fear it leads them into a debt trap. When you use a credit card responsibly, it not only increases your convenience but also offers an array of other benefits. 

Now that you're aware of the impressive benefits of a credit card, apply for one and get started enjoying the various perks and rewards that come with it.

FAQs: 

1. How much credit limit can I get on my credit card?

Your credit limit is based on your net monthly income. Companies generally give twice your net monthly income as your credit limit. 

2. Is it wise to use my credit card for utility bills?

Very much so. Paying your utility bills using a credit card can get you higher reward points and cashback. But ensure that you repay the amount in full in the next billing cycle so that you don’t incur interest charges. 

3. Should I opt for a rewards card or a cashback card?

Rewards cards are beneficial when the bulk of your monthly expenses are done at stores and retailers. If you are an avid online shopper, go for a cashback card so that you can get better discounts and more cashback. 

4. Are brand credit cards a good option?

Yes, they are. Brand credit cards like Amazon credit cards or Flipkart credit cards will give you additional benefits and discounts when you shop on their platform.