Benefits of Owning a Credit Card

Apart from being one of the most convenient methods of cashless transactions, credit cards are also known for offering a wide range of benefits to the owners. Whether you are carrying out a transaction online, at a store or anywhere else, credit cards are accepted widely for all types of transactions. Credits cards are not only useful for transactions but it can also provide you with deals, cash back, rewards, and other offers based on various factors. Most banks offer credit cards to the customers based on their eligibility criteria. Moreover, there are various types of credit cards which are issued for specific uses such as dining, fuel, etc. No matter which category the credit card belongs to, the following are few of the common benefits of owning a credit card:

• Safe and protected - Compared to any debit card or cheques, credit cards offer superior protection on the transactions. If the credit card is charged for any amount without the consent or knowledge of the credit cardholder, he/she can make a claim for the transaction. The credit card issuer will look into the transaction and provide a refund to the holder. Provided that the credit card holder was not being negligent, the fraudulent transactions on the card will be refunded. Additionally, most credit card issuers send out notifications/alerts whenever the card has been used for any transaction. This also applies to attempts to use the card without a PIN or wrong PIN. The customer also has the option to block his/her credit card immediately if it is lost or stolen.
• Speed of transaction - Whether the transaction amount is small or large, a credit card can help you settle the transaction almost immediately. Most merchants and service providers accept credit cards as a valid method of payment. Additionally, most of the online and internet-based transactions can be carried out with the help of a credit card.
• Converting to EMIs - Credit cards are also known for providing the convenience of converting a large transaction into several EMIs. Most credit card issuers allow the customers to either convert a single large transaction or multiple transactions to be converted into the EMI options. Though the credit card issuer will charge a specific interest amount, a credit card can help you make bigger transactions without much trouble.
• Interest-free period - From the time a transaction has been made to the time the customer is billed for it, this period, known as the interest-free period, can help in utilising the credit card without any cost. Typically, the customer is not charged during the interest-free period. If the customer pays for the full amount within the interest-free period, he/she doesn't have to bother about paying any extra money to the credit card issuer.
• Extra earnings - Many credit cards offer cash back, reward points, etc., on specific types of transactions. A customer swiping his cards for specified types of transactions are rewarded in different ways based on the type of the card and the offer period. If the customer is paying off the entire bill amount then it means that he/she could be earning extra from his/her credit card. There are many issuers who also offer deals such as reward points, discounts, etc., while applying for a credit card.
• Balance transfer - Similar to a bank loan, when a customer finds it difficult to manage his/her card due to a high-interest rate, they are provided with an option to switch to another credit card issuer who can provide a lower rate of interest. Though there are specific charges that the customer might have to pay, it is still one of the best options to get out of debt.
• Convenience - Compared to cash or cheque, a credit card provides the convenience of portability. A small plastic card can take care of all your transactions without having to worry about receipts, cash memo, etc., for accounting. All the transactions are recorded on the customer's credit card account and also provided through the monthly statements. A credit card is also a safe alternative to carrying cash.
• Credit score - A credit card can also help in building and strengthening the credit score. Since credit card transactions are used for creating credit reports and for calculating a credit score, the customer can use their card effectively to see a positive change in their credit score. A good credit score can help the customer in availing either a bank loan or another credit card. Individuals with a bad credit score are often turned down for lending institutions
• Emergencies - Expenses arising due to an emergency can be handled with the help of a credit card. There could be instances when you are out of cash or it's a bank holiday and you are unable to arrange cash. In such situations, a credit card can be used to settle uncertain expenses immediately. A credit card comes handy in most situations, as long as you are able to pay your due bill, there is nothing much to worry about.
• Accepted worldwide - Most credit cards can be used across the world in any currency. There are certain types of credit cards for which the transactions are limited to domestic usage. Although there are associated charges, it works as the best alternative to various methods of transactions. Credit cards are not limited to swiping at a store, customers can use credit cards for all types of online transactions as well.

Though there are concerns over the usage of credit cards, it can be used wisely to take advantage of many benefits it has to offer. Whether you are applying for a credit card or already own few, you are recommended to go through the terms and conditions of the card to understand it better and also to make the most out it. Currently, banks offer credit cards for various purposes based on the customer's lifestyle and spending habits. In order to understand which type of credit card will suit you better, you can speak to one of your bank's representatives.