Do you own a credit card? If not, it’s time to hold one. The are umpteen direct and indirect benefits of transacting with Credit Cards in India.
Since, I was a kid I was always taught Credit borrowing is bad while Credit lending as good, since it generates money. But there is another face to taking a credit and benefiting from it. It’s called Credit Card Hacking, as Brian Jung describes it. Given a chance, always go for a Credit Card. Pay in Full on the payment date. Obtain multiple types of cards to benefit multiple ways from multiple businesses.
Direct Benefits of using Credit Cards
- Rewards Points which can be redeemed into cashback or Discounts on Online or Offline Shopping, Movie Bookings, Dine out Restaurants, etc
- Extra miles for frequent Airline travellers and free Lounge access
- Withdrawing cash from ATMs (which of course comes at an extra cost)
- EMI facilities (even Zero Cost EMI) on certain bulk purchases like a Gaming Laptop
- International Purchases. I first realized the benefit of Credit Card when I was buying my first domain name, when the domain registrar is not accepting none of my debit cards.
Indirect Benefits of using Credit Cards
- Can be used as an Expense Tracker. Use one particular card for each kind of Purchase. Credit Cards if combined with 3rd party apps like Cred, can increase the benefits by many folds.
- Purchase protection. The Credit Card companies protect the purchaser from frauds, be it online or offline. It reverses the transaction if the fraud deemed to be true.
- Insures the card holder or his assets. Most travel credit cards include travel insurance as a bonus.
- Helps to maintain credit history and build a credit score, which helps in obtaining a big ticket unsecured loan when required
- No need to carry lots of cash. At-least up to your monthly credit limit.
Although there are many benefits of using Credit Cards, these credit card companies don’t put cap on your spending. If you cross the limit of what you can repay, you will be in debt and the high interest rates of Credit Cards make sure you won’t come out it. So I’d say better never juggle with credit cards.