When you learn to use credit cards wisely and responsibly, they become a great financial tool. It provides benefits, security, convenience, and aids in the development of a good credit score.
So, what are the advantages of using a credit card? Let’s start with some of the most significant benefits of using a credit card:
Credit grace period (Spend Now, Pay Later)
Perhaps the most appealing feature of a credit card is the interest-free grace period that users can take advantage of if the amount owed is paid in whole by the due date. Customers of IndusInd Bank can borrow money for up to 50 days without paying interest.
Credit score
Because credit card transactions are equivalent to borrowing money, they are reported to credit agencies, who use them to calculate and develop your credit profile.
If you want to get a loan for business expansion, vehicle purchases, personal requirements, or simply buying a new home, your credit score is vital. Borrowers with a good credit score can negotiate the best deal with the lending institution, allowing them to achieve their financial goals.
Discounts, cash backs, reward points, loyalty credits, complimentary club memberships, and free access to airport lounges are just a few of the incentives available. You must choose the card that provides the best benefits and corresponds to your lifestyle needs.
Cash flow planning
You may time your big-ticket purchases to provide yourself with a longer credit period if you plan properly. Making purchases with credit cards in the first few days of the payment cycle can help you get the most out of your grace period.
Some credit card firms offer a graphical representation of your spending habits, which is organized into period buckets based on expense categories. This can assist you in analyzing your costs and making any necessary changes to your cash flow plan.
EMIs on credit cards
Banks and financial institutions allow cardholders to pay for some purchases using Equated Monthly Instalments (EMI). Numerous card issuers go over and above to provide interest-free EMIs with terms ranging from 3 to 36 months.
This is a good alternative for people who don’t want to pay for big items all at once. Instead, they choose to spread the re-payments out across several months.
Instant pre-approval loan
Credit card companies provide pre-approval loans to cardholders who have a good payment history and credit profile. Some credit card companies provide loan amounts that are higher than the permitted credit limit (with terms ranging from 6 to 36 months). This is useful in the event of a financial emergency.
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