Features and benefits of a Credit Card

Credit cards are a safe bet when it comes to balancing your last-minute finances. They are a financial instrument that allow you to borrow funds up to a pre-approved limit from both banking and non-banking institutions to help you handle your finances. Many people see it as a liability or a way to accumulate debt. When used with caution, however, the advantages will outweigh the drawbacks.

What is a credit card?

It is an offering by the financial institution that allows the borrowing of funds from a pre-approved limit for your finances. The credit limit is decided by the institution supplying the card based on your credit score. Higher the credit score, the more your credit card limit will be. The repayment of the amount borrowed should be done within the stipulated time to avoid penalty charges.

 

What are some of the features of a credit card?

The features of a credit card include:

• 1.       Easy and comfortable transactions
• 2.       Convert your purchases to EMIs
• 3.       Win reward points and cashback
• 4.       Easy approval
• 5.       Secure payments
• 6.       Tailored card limit

 

What are some of the benefits of a credit card?

With the emergence of many mobile apps, you can use your online credit card for your transactions. When you walk out the front door with wads of cash, you're an easy target for thieves. Carrying cash in an age of digital wallets isn't ideal. Instead, a credit or debit card would be more realistic.

·         Helps build your credit score

·         Earn reward points on transactions with credit card

·         Increases your purchasing power

·         Avail emergency personal loan

·         Convenient repayment window

·         Hassle-free EMI conversions

 

1.       Helps build your credit score

If you want to borrow money, you'll need a credit score, which is based on your financial activity history. Your credit card background contributes to these ratings. On several levels, using your card wisely is beneficial to your financial health. To begin, disciplined credit use, which involves spending less than 40% of your credit limit and paying your bills on time and in full, will help you improve your credit score.

2.       Earn reward points on transactions with credit card

Many banking and non-banking institutions also offer Rewards Points to their users for spends on the credit card. You can choose cards with point or reward structures that suit their lifestyle and spending habits to get the most out of these benefits. You can see the list of advantages or perks offered on the credit card app of the lender. You also can check the expiration of the rewards on the mobile app. You can use these reward points to get discounts on your purchases and thus save money.

3.       Increases your purchasing power

By using the credit card and paying later, the card issuer provides the user with a pre-approved spending cap. Individuals' buying power is increased as a result of their use of cards. Large purchases, such as luxury goods for the home, are easier to make with a card with a higher cap. It can also come in handy during emergencies. A card with a high limit comes in handy in situations where major payments must be made up front, such as an unexpected hospitalization.

Read Also - Top Advantages of Using Credit Card

4.       Avail emergency personal loan

Companies like Bajaj Finserv offer an instant emergency advance with your credit card on your pre-approved credit limit. You can get a Personal Loan on your cash limit with a nominal interest rate of up to 1.16% without processing fee charges with your Bajaj Finserv co-brand credit card. You can check for other offers by the company on the online credit card.

5.       Convenient repayment window

Most online credit card companies offer a no-interest loan for up to 30 days. Different to debit cards, they do not immediately deduct the amount from your savings account. It comes with a grace window of up to a month for easy repayment. This can prove to be beneficial when dealing with financial inadequacies and dealing with emergencies.

6.       Hassle-free EMI conversions

You can easily convert your big purchases into easy EMIs which can be repaid over a flexible range of selected tenure. Also, most financial institutions offer an option of no-cost EMI, so you do not end up paying extra or surcharge on your purchases. This is done to aid in the repayment of your big-ticket purchases

Also, many companies offer consumer protection on their card to protect against accidental damages and theft. There are many companies offering sign-on bonuses on an online application that can be redeemed later for your purchases. It can come in handy when paying for your monthly expenses, grocery, bills and more.