Advantages of credit cards and disadvantages you need to keep in mind, Before applying for a credit card. A credit card is a small rectangular piece of plastic provided by banks. It enables you to spend on your purchases by borrowing funds from a pre-approved limit. Based on the CIBIL score, the limit is set by the bank offering the card. In general, the higher the score and the better the limit. The main distinction here between a credit card & a debit card is that:
The money is withdrawn from your checking account anytime you use a debit card.
Whilst the money is deducted from the pre-approved limit in the context of a credit card.
Financial advisors will tell us to avoid using a credit card. Most of us use credit cards and wind up in trouble. We have mentioned five credit card threats below:
- Getting into debt.
- Skipping credit card payments,
- Holding credit card balances and incurring high-interest rates.
- Applying for so many new credit cards at the same moment.
- Use beyond the limit
While there are risks involved in using credit. By upholding certain common rules, you will mitigate their effect. As for the usage of every type of account, it is best to resist timidity and instill a sense of consistency. You need to understand the Credit Card Interest Rate. How does the bank calculate it? The credit card interest rate is measured as the annual percentage rate. You can notice that your credit ratings will go far. Here are 10 reasons for you to understand the benefits of a credit card:
It’s fast and Straightforward
Credit cards simplify things to checkout. Only swipe the card, sign the signature, and you’re done. Through mobile applications now, you could pay on the phone with a pass. HDFC credit card offers fast service. HDFC credit cards access info on all your cards 24×7.
No need to carry cash
Forget about searching an ATM or paying crazy rates to get your own cash. There’s no reason to bring cash for a credit card. With HDFC credit cards, you can track all your transaction history.
Bonuses on One-Time
When having a new credit card, there is nothing quite like an initial incentive chance. Sometimes, credit cards give incentives in return for paying a certain sum. It will be accepted for borrowers with decent credit or excellent credit.
Initially, people used to get 1% of what they used to spend as cashback. But nowadays people even get 2%, 5%, 6% of cashback.
Points for Rewards
Credit card bonus rewards are designed to allow card users to invest 1 or even more points per Rupee. For some types of purchases, like groceries, fuel, credit cards offer bonus points. Points can be exchanged for flights, cashback from dealers and retailers. For retail products via the online bonus portal of the credit card provider after those earnings levels are met. With HDFC credit cards, you can track and redeem your reward points.
In general, cardholders receive miles on net spending at the cost of one mile every dollar. Or often one mile every two dollars paid on reduced card choices and have no charge.
Sign up for automatic billing when you receive your credit card. It ensures that the credit card will automatically cover the
Buying using a credit card ensures there’s a chance for insurance against sales. The credit card issuer can work with your lawsuits because if a retailer does not take back a faulty product. There is a fair possibility that the credit card bank would either negotiate with you or compensate you back.
With a debit card, such transactions are hard to make. It is accepted by hotels and rental car companies.
You may not have enough cash last week for food and bills, and you need all of them. Using the card with your credit. Credit cards are like a minimal investment. By the end of each month whenever your credit card balance is due, you can buy anything now. For that, if you do not have cash, then pay it back. Only make sure you are mindful of the spending and don’t go nuts by purchasing stuff you can’t payback.