Here’s Why It’s Always Good to Have a Credit Card by Your Side

So many people don’t like having credit cards for all the right reasons. There is a perception that credit cards encourage people to spend unnecessarily, and they end up in expensive debt. You might have seen your friends or relatives struggling with a credit card and perhaps conclude never to have a credit card. 

However, there are various benefits that borrowers get by using their credit cards responsibly. Using credit cards to gain or fall in the debt trap is in the hands of users. If you are one of those looking to avail a credit card, then here are some of the reasons why it’s a good idea to have one, considering you use it judiciously:

1) The easiest way to build a good credit score

With the responsible use of credit cards, users see an improvement in their respective credit scores. Here, responsible use of credit cards refers to keeping the credit utilisation on the lower side and settling the credit card bill within the due date. This practice is considered positive by credit bureaus, and hence credit score shoots up.

2) Easier to apply for loans in the future

With the right use of credit cards, your credit score improves, which will help you finance your big-ticket expenses such as the purchasing of a house through a home loan or car through a vehicle loan. This is possible as you have a proven track record of handling credit responsibly, which is a green signal for lenders. 

3) Ease of availability of credit

Availing credit is just a swipe away. Credit cards can be considered high-class debt as not all can afford it. Availing credit cards is easy provided you furnish the requisite documents correctly. If you are short on cash and need some, then all you need to do is use your credit card. It’s as simple as that!

4) Exclusive deals and discounts

Numerous online and offline vendors are offering exclusive deals and discounts for credit card users. The offers can be in the form of additional discounts, vouchers, cashback, gift coupons, and so on. The payment can also be made in a debit card or cash but when you are getting special offers on using a credit card, then why not use the same?

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5) The benefit of the grace period

A grace period is a set number of days within which the credit card bill payment can be made without any interest charges. Hence, using a credit card when you don’t have enough money in hand is beneficial over availing personal loans as there is a scope for zero interest.

6) Tracking expenses

Using credit cards over cash gives you the benefit of tracking your expenses. Accessing your credit card account statement is just a few clicks away, and this helps users keep a track on their costs comfortably. Moreover, users are sent an alter through SMS or email, which states the amount they spent whenever their credit card is used. 

7) Safety

Most credit card transactions can be made only by entering the personal identification pin (PIN), or a one-time password (OTP) sent on the registered mobile phone number, and this ensures that there are no transactions made by the unauthorised. Insurance policies can be availed on credit cards which is very beneficial for the users. 

After knowing the benefits of having a credit card, it makes senses to avail one. However, users must responsibly utilise their credit cards to make the most out of it and to avoid falling in the debt trap, which is very hard to come out of. 

For any clarifications/feedback on the topic, please contact the writer at vineeth.nc@cleartax.in

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