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How Credit Cards Have Changed the Way We Spend
Sometimes, there are pressing financial demands or an emergency that you have to address right away. If you don't have substantial funds in your bank account at that moment, you can face a lot of difficulties. What can possibly pull you through this situation? A credit card!
How Does A Credit Card Work?
When you transact through a credit card, the institution that extended the facility to you bears the merchant fees on your behalf. You can make as many transactions as you want within the approved limit.
When used judiciously, a credit card, by giving you immediate liquidity, can service your urgent need for cash to carry out a range of functions. There has been a sea change in how we spend since credit cards became an important financial tool. Read on to know more:
1. Payments are faster and easier
A credit card has made possible faster payment. It is especially handy when you are not carrying sufficient cash with you. With a credit card in your payment arsenal, the problem of lumpsum payment for an expensive purchase isn't an impediment anymore. The only thing to remember here is to pay the outstanding amount within the stipulated time period.
2. Your money is more secure
Unlike a debit card or cash (where once expended, the money is usually gone for good), spending through a credit card acts as a buffer in case your purchase ends up being faulty or the company's financial fortunes turn turtle.
You can then claim your money from the issuer. Moreover, merchants also have the security wherewithal to help you in case you lose your card or suspect any fraudulent transaction made through it. If you find yourself in such a position, report the matter to the issuer immediately.
3. You can better your credit score
A timely payment history impacts your credit rating positively. So, if you can hold your account in good stead and be wise with clearing your bill on time, your credit profile gets the boost, that will, in turn, help you with easy approval for big-ticket loans in the future.
4. Earn and spend, at the same time
Making a purchase through credit cards helps you earn reward points. When redeemed, these translate to cashbacks, air miles or other loyalty points that you earn on every legitimate purchase through the card. You can redeem these points with lender specific reward arrangements at your own time.
New-age credit cards such as the Bajaj Finserv RBL Bank SuperCard allow you to earn a large amount of reward points and a range of other benefits.
5. Get interest holiday days
Your issuer has a provision of rewarding you with interest-free days if you prove to be consistent and regular with paying the monthly bills. You can get an interest relief on subsequent purchases, albeit for a specific period.
6. Credit cards are currency neutral
Although you will have to pay conversion charges if you want to switch to a foreign currency, you can make purchases abroad using your credit card. Certain issuers can waive off the extra fees usually levied for overseas purchases.
7. Credit cards can cover for unanticipated expenditure
One of the major benefits of a credit card, is that it gives you financial indemnity in case you don't have the funds to address an unforeseen expenditure that may arise.
Summing up, a credit card can be of great use if you don't violate the basic terms of usage. You can even optimize your benefits, just by being level-headed with it.
With pre-approved offers from Bajaj Finserv on credit cards, home loans, business loans and personal loans, availing finance is a hassle-free affair. All you need to do is share some basic information and check your pre-approved offer to get instant financing options.