Suppose you go shopping; while making a payment, you don’t have to worry about how much cash you have in your pocket. You can use a credit card and purchase with a tap. Fascinating, right? Making your purchase smooth is only one of the many benefits of a credit card.
If you want to apply for a credit card but are not sure if you should, here are the top 7 benefits of using a credit card in India. Read on!
A credit card is a payment card issued by banks and NBFCs. It makes online and offline transactions easier and hassle-free. Credit cards come with a pre-set limit depending on the credit card holder’s CIBIL score and income. The cardholder can use the card for payments up to the set credit limit. The cardholder can continue borrowing money from the revolving credit account and pay the entire amount on or before the due date. Or, convert the transactions into EMIs and pay the due amount over a few months’ time.
The following are some of the most significant benefits of having a credit card:
Although there are multiple benefits of credit cards, you should never make it a habit to keep using your credit card while building debt at the same time. Also, before applying for a credit card, make sure to compare the features of different card issuers to identify the best option.
Ans: Credit free period is the period by which the credit card holder has to make the repayment to avail of interest-free loan benefits. This can range anywhere between 18 and 55 days. After which, the lender will levy an interest between 22% and 48% annually on the outstanding amount.
Ans: Going beyond your credit limit can significantly hamper your credit or CIBIL score. It will also attract an over-limit charge or penalty on the amount you have overspent.
Ans: Credit cards are not only about credit limits and repayment. There are a few other charges associated with credit cards, such as late payment fees, joining fees, renewal fees and processing charges. One should be aware of these charges while getting a credit card.
Ans: The minimum amount due is the amount you should pay to the credit card issuer to maintain your credit card account. It is a small percentage of the total outstanding amount.
Ans: Yes, you can withdraw cash using a credit card. This can prove to be beneficial when you are running out of cash and have no other option. However, there will be additional charges levied on the transaction made.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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