Saturday, 28 November 2015

8 Undeniable Reasons to have a Credit Card


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If we make a list of inventions that have made our life easier; then there’s no doubt that credits cards will come in top 10 such inventions. Credit cards have changed the way of carrying cash, making payments. We can use credit cards for e-shopping, cash withdraw, and for making online bill payments. Credit cards offer cashless payment methods; which eliminates the problem of carrying cash and also it reduces the risk of any individual getting loot. At the top, credits cards are universally accepted; that resolve the problem of carrying different currencies while traveling to different countries. An individual can track his/her monthly expenditure, and also can build a good credit history with the help of credit cards. Usually, Debit cards transactions cannot help you to build credit history; because no one keeps record of transactions made by debit cards. As everything has its pros and cons; therefore, credit cards have some advantages and disadvantages. In this article, we will be discussing on the benefits of credit cards; and we have covered disadvantages of credit cards in a separate article. Here are some benefits of having a credit card:

Disclaimer: The information and benefits provided herein are for informational purpose only. Please do not take it as a legal advice.

Interest Free Loan


Credit cards offer an interest free loan for certain period of time (usually ranges from 20-60 days). In credit cards, Interest free period is termed as Credit Card’s Grace Period; it is the time in which the cardholder has to pay the balance before the interest is assessed on the outstanding balance. Whenever, you’re in a soup then you can use this facility to solve your financial problems such as; medical emergency, sudden need of funds etc. Ultimately, you’d have emergency funds to fulfill your emergency or future needs. Any time, you can use your nearest ATM (Automatic Teller Machine) to withdraw cash (amount of cash that you can withdraw from an ATM depends upon your credit limit).

Comfort


Credits cards offer cashless payment options; you don’t need to find ATM machines and no need to fill your pockets with cash, while you’re going for shopping etc. Credit cards are accepted worldwide; therefore, a credit card could eliminate your worries of arranging foreign currencies, while you’re traveling abroad. Most of the companies do not charge a surcharge for accepting credit cards; except you’re paying your tax returns.

Buy Now and Pay Later Service


Over the last few years, we have seen a significant growth in ecommerce around the globe. E-commerce companies try to lure visitors by lucrative offers. On special occasions like Festive season, Christmas etc, ecommerce companies sell products on unbelievable prices; if you want to buy an expensive product in such times but you’re low in budget then you can pay through your credit card, and you can convert your purchase into EMI. Nowadays, many credit card companies offer EMI option at zero percent interest rate.
   

Purchase Protection


This is an appreciable feature of credit cards; generally, credit card companies provide price protection for purchase of $500-$50,000. Price protection or consumer protection provides people peace of mind. You do not need to fight with seller; if you got a defective product or if a perfectly good purchase gets ruined, because your credit card company will handle all disputes related to your purchases. All you have to do; just file a claim under price protection, and leave out all the rest on your credit card company. Usually, credit cards companies do not charge any fees to handle such disputes; but it varies from company to company and also it depends upon the type of card you own. It is advised to buy an expensive product through a credit card; to minimize risks.

Price Protection


Price protection is another admirable program started by credit card companies. The price protection program helps you to get the best price on your products. Customer can claim refund within the price protection period, if he/she finds a lower price for his/her purchased product (same model number, same model year, and by same manufacture) for example; Let’s suppose, I have bought a product whose cost is $10,000 and within price protection period (usually 60 days) I see a drop in price say $9000. In such scenario, I can claim a refund for the price difference. It is also advised to read what is covered and what is not covered under price protection program. Customers have to register their products for price protection, lest, they are not eligible to get claims.   

Cash back and Discount Offers


Every time, you spend money through your credit card on groceries, fuel, shopping, air miles, or traveling, you earn reward points. The reward points earned can be spent on various categories listed by your credit card company. Many ecommerce companies offer extra discounts, if you make payment through a credit card. These are the extra benefits of owning a credit card; usually, which you don’t get on other payment methods.

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Credit History


Regular use of credit card can help you build a good credit history. If you’re using your credit card frequently to pay your fuel charges, grocery bills, electricity bills etc, then it could help you build a good credit history. It is very important to build a good credit history; because a good credit history helps lenders to decide whether you deserve their services or not. Your chances of being accepted improve - if you need a credit card or loan in future. Usually, lenders use your credit history to accept or reject your application. Debit cards cannot help you to build a good credit history; because no one keeps record of purchases made by debits cards.


Insurance


Credit card companies provide a comprehensive insurance covers; which includes purchase protection, lost card liability, air accidental cover, travel related covers etc. You may count it as an extra privilege of having a credit card.
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