what is Credi Card-Advantage, Disadvantage, Benfits of Credit Card in Digitalgkaa- These days online shopping sites are announcing more offers credit
what is Credit Card
These days online shopping sites are announcing more offers on credit cards than debit cards. Therefore, the number of credit card users is increasing exponentially. However, some people still do not have a proper understanding of credit cards. The reason for this is that many people say that having a credit card will incur unnecessary expenses, so do not use a credit card. While that is true to some extent, there are many benefits to using a credit card if you are fully aware of the credit card and know how to use it.
A credit card is similar to the ATM or debit card we normally use. Banks or financial services companies lend us some money to use. The loan can be used for a few days (usually 21 to 30 days, depending on the bank) without any interest. If the loan is not repaid by that deadline then interest will have to be paid. There is no interest charge if the same is paid within that period. Or we have to pay the money used in the form of EMIs at a certain rate every month. Therefore some interest has to be paid. Also, each credit card has a limit of up to a certain amount. We can use that card up to that limit.
So a debit card is a card that helps us to use our money already in our bank. But a credit card is a card that uses the money that the bank lends us. This credit card should be used as needed, but should not be used unless absolutely necessary. But there are many rewards to using a credit card carefully.
Advantages of Credit Cards
1. Our Credit Score or Cibil Score will increase if we use a credit card and pay regularly on time. Banks lend quickly to those who have a high credit score when they need a loan in the future.
2. Cash can be used for free up to a given time period without any interest in the money.
3. Reward Points and Cashback can be obtained when making a payment using a credit card.
4. Having a credit card can help us a lot when there is no money in an emergency.
5. There is a facility to pay monthly in the EMI method when you cannot pay more money at once.
6. E-commerce sites are also announcing lots of offers on credit cards. Sometimes there are more offers on a credit card than a debit card.
7. Sometimes there are “No Cost EMI” offers without even having to pay interest. Can use them. That means it can be tied up in the form of monthly installments without any interest.
But there are several benefits to using a credit card. There are also some risks if not used properly without financial discipline.
Disadvantages of using a Credit Card
1. If the loan taken by credit card is not repaid within the given time so much higher interest will have to be paid. This will also reduce the credit score.
2. Credit card usage includes Late payment fees, Joining fees, Renewal fees, and Processing fees. However, some banks offer credit cards with no such fees.
There are many benefits to using a credit card
Many people say that taking credit cards is our best friend. Many people fear that they will end up in a debt trap if they make an Edapada purchase with a credit card. But with good credit, you might find exactly what you need.
Your registered phone number will receive the details as soon as the credit card transaction is made. Moreover, if a credit card is used for large purchases, credit card companies will call and ask for confirmation of the transaction. If you say yes, the transaction will be completed.
If someone steals your credit card and makes a large number of transactions, it is possible to stop it. This is not possible if the same transaction is made by debit card. If your credit card is blocked, it may take a long time. Thus there are many advantages with credit cards compared to debit cards.
Better than a debit card
A debit card is sufficient for those who live in the same area. It is a good idea to have a credit card only for those who travel to other areas for the same office work or on their own. From credit book bookings to car rentals, you can pay by credit card if you have a credit card in your pocket. A credit card is more useful when traveling abroad. This is because a debit card is not as valid as a credit card valid everywhere.
Rewards, cash backs
There have been many changes in the rewards given on credit card transactions. Customers choose the credit card company that gives them the highest rewards over time.
More air travel
A credit card is a wonderful gift for those who fly frequently. Special credit cards are offered with a focus on credit cards. If you pay the airline Charlies with these cards, you will be rewarded with the opportunity to travel a few more miles for free in addition to each ticket.
Rating increases
Without a proper credit rating, banks will not lend at present. Can I get a loan based on your credit rating? Or not? Determine. Your creditworthiness will increase if you use any credit card and make regular payments. If you ever need a loan and go to the bank, you will get a loan based on your credit history recorded with CIBIL.
Precautions are also required.
There are some precautions to be taken to get the benefits with credit cards. Especially since it is not advisable to spend more than you can afford at once. The same principle applies to credit card purchases by those who have money in their pocket and cannot afford to buy more with cash at once.
No arrears pending ...
It is advisable to pay the bills purchased through a credit card from time to time. Do not keep actual arrears. If the arrears do not accumulate you will gradually go into a recession. If you want to improve your credit rating with CIBIL, do not use more than 30% of the credit card credit.
It is a good idea to take some precautions before and after taking a credit card.
1. Some people spend a lot of money on a credit card even if they do not need it. Do not do that.
2. Try to get Joining Fee and Annual Maintenance Free Card as much as possible.
3. Choose the credit card that best suits your needs. For example, if you shop online a lot, there is one type of card, and if you travel a lot, there is another type of card. These will give you the most benefits. For example, Amazon Pay ICICI Bank Credit Card may be more useful if you shop more online. This will give you cashback every time you shop online.
4. Keep checking your credit card statement every month. We need to make sure that all the transactions in that statement are done by us. Occasionally there is a risk of fraud.
So we can use the credit card properly by taking such small precautions.
what is Credit Card
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