Credit card is a wonderful facility provided by the banks. Credit cards are one of the most useful financial products if used in the right way. However, they can go bad if they fall into the wrong hands as they can harm your health.
Credit cards are a financial instrument that helps customers to get credit without any loan application or documents. You can use the card as per your requirement, without worrying about emergencies.
The debate about whether credit card applications are good or bad has been going on for decades. Let us look at the benefits of credit cards so that you can evaluate and decide for yourself.
Why Credit Cards Are Good
Is a credit card good to have? Credits are great as long as you’re not using them the wrong way. If you are short on cash and have to make purchases, a credit card is a convenient way to pay for purchases. They are considered ideally good. There are some benefits of using a credit card which are also important to know about so that you can determine why is credit card good?
- They are more secure than carrying cash.
- A credit card is a very useful tool for credit score. You can get or maintain a good credit score if you do not have any outstanding on your credit and pay your dues on time.
- You get interest-free days whenever you buy goods on No Cost EMI using the credit card.
- Credit cards work in different currencies.
- They are your emergency credit line.
- It lets you consolidate debts and save money on existing credit card balances.
- You can enjoy cash advance to manage cash emergencies.
- They offer complimentary extras.
Why do people use credit cards instead of cash?
Keeping cash in today’s world of technology can be very risky, so people are turning to digital currency. Credit cards are more convenient and safer than carrying the same cash. As long as you can pay your bill in full, a credit card is a logical and desirable alternative to cash for in-person purchases and an essential tool for online transactions.
Unlike cash, credit cards give you more consumer protections, perks that reward your spending with free airline flights, hotel rooms and even cash back, plus they make it easier to track your purchases.
If you have cash it can be easy to lose it, whether that wad of $20 bills falls on the street, goes through your jeans wash or burns up in a house fire, once it’s gone, it’s always there. Went for it. The same credit cards are not only more flexible, but they also offer more security than debit and prepaid cards and cash options like checks, since the money isn’t taken from your account right away.
Which is better, using a credit card or using a debit card?
According to me the very easy answer is credit card. Let’s see what are its advantages from my point of view.
- Credit cards are not directly linked to my bank account so if someone steals or loses my card, there will be no loss to my account.
- Similarly, if there is a false allegation or dispute, with a debit card you don’t have the money until it’s resolved, with a credit card you don’t lose access to your money until you lose the dispute.
- Credit cards offer rewards programs that can net you cashback, airline miles, and other perks. Debit cards usually do not offer any rewards program.
- With a credit card, you can buy more than you can afford, and it’s easy to do.
However, credit cards are traps and too expensive for the uninitiated. Are you good at managing your money? Then choose Credit Card. If not, then select Debit Card.
Also Read – Is Credit Card An Asset or Liability?
What is the best way to use a credit card?
A credit card can be very beneficial for the financially disciplined, but it can be a disaster for those who don’t understand it. Let us look at some tips to use your credit card efficiently:
- Use the credit card only for the purchases you normally make and only for the things you need.
- Paying off your bill in full every month will not only save you high interest but also improve your credit score over time. Because not paying bills on time will quickly have a negative impact on your credit score.
- Spend only as much as you will be able to repay in full at the end of the month.
- Note or note down the payment due date or give ECS (Electronic Clearance Service) mandate for automatic payment.
- Every credit card has a maximum spending limit, which depends on your income and credit history. But you should try to keep it to a minimum.
- If you repeatedly use your card up to the maximum permissible limit, you will end up hurting your CIBIL credit score.
- Credit cards can be used in a disciplined manner to earn cash back, travel points and reward points. On the other hand, many spend excessively just to chase reward points, which is self-defeating.
- Sometimes people use their credit cards when they are abroad. Banks levy additional fees for international transactions (such as cross-currency fees), which make them costly. This can be avoided.
- Many users also use their credit cards to withdraw money from ATMs. Such amounts attract heavy interest from the date of withdrawal till repayment, which can be avoided.
Why do rich people have credit cards?
Rich people love credit cards and credit card companies love them too. Let us know why rich people prefer credit cards:
International Acceptance : Credit cards have wide and international acceptance. If a rich person has to buy some stuff online, he certainly cannot pay in cash. The next option would be to go to the bank and deposit the money. It is laborious. With credit cards, the transaction is completed within minutes.
Credit Score : Using a credit card one can build up their credit score. Credit score is an integral part of any loan evaluation process. Even some employers ask you to provide your credit history.
Ease and Convenience : Rich people also need convenience in doing transactions. Just swipe your card and you’re done.
It’s a status symbol : Socially speaking, it’s nice to pull a fancy card out of your wallet and swipe it. Isn’t it đŸ™‚
Availability of many attractive offers on credit cards:
1. Free/complimentary airport lounge access
2. Cover for air accidents/baggage loss/emergency hospitalization
3. Rewards Points, Cash Back,
4. easy payment options
Why do people have/use multiple credit cards?
People having more than one credit card can either help or hurt their credit score. Let us see why people keep more than one credit card:
To Maximize Rewards : In today’s time, people go for more than one credit card to meet their different needs. Credit cards come with all kinds of different benefits and bonuses. Some offer travel rewards while others allow cardholders to earn cash back or zero interest on their purchases.
To Increase The Credit Limit : A card has a fixed credit limit and can take a toll on your credit score if you use it completely. People use more than one card for this so that they can make purchases with a fixed amount of credit.
Also Read – Are Credit Cards Worth It?
What are the best credit cards in India?
Since each person is unique and has unique needs, goals, requirements and hobbies, there is no one perfect credit card that fits everyone on this planet. Hence, one needs to find the credit card that is best for them. However, there are several credit cards that have made it to the top of the list due to their better-than-best benefits and unique perks:
| Credit Card | Best For |
| YES Bank-BankBazaar Co-branded Credit Card | Reward Points |
| Yatra SBI Credit Card | Travel, Flight Booking, Hotel Booking |
| YES Prosperity Edge Credit Card | Shopping and lifestyle |
| RBL Shoprite Credit Card | Shopping |
| IndusInd Bank Platinum Credit Card | Lifetime Free Card |
| IndianOil Citi Credit Card | Fuel |
| Axis Bank Neo Credit Card | Cashback, Hotel, Movies |
| HDFC Bank Diners ClubMiles Card | Lounge Access |
| Citi Rewards Credit Card | Rewards |
| Axis Bank Neo Credit Card | Bookings, Shopping, Movies |
Frequently Asks Questions(FAQ’s)
Q1. Are credit cards with no annual fee good?
Definitely a big yes. We all know that having a credit card gives us a host of benefits such as cashback, additional discounts on purchases, easy money, and many more. And if on top of all that we get a credit card with no annual fee, then I guess it’s a no brainer.
Q2. Why do many people discourage usage of credit cards?
The reason people discourage credit card use is because as long as you’re always in a hole (in debt), you can’t outrun your money. You need to learn to stop spending money you don’t have yet. You need to learn to live within your means and save for the things you need to buy.
Q3. Are credit cards with rewards worth it?
Absolutely, if you use them wisely. Using a credit card is definitely “worth it” if you have the self discipline. But if you make minimum payments every month they can quickly become a nightmare and are definitely not worth it.
Q4. Are credit cards good or bad?
Whether credit cards are good or bad depends on an individual’s financial situation and spending habits.
Q5. Are annual fee credit cards worth it?
Whether annual fee credit cards are worth it depends on an individual’s spending and financial situation.
The Bottom Line
is credit card good? Yes Credit Cards are good if you have the money to pay them off in full each month, to pay off the balance. This way you don’t have to carry a lot of cash in your wallet and run the risk of getting robbed and you are using the card as cash. If you have a credit card that offers extremely low interest, it may be better to charge a higher purchase amount to your card than to get a loan with higher interest, such as buying a car. Plus, if the card offers rewards for usage, you’re getting an added bonus that you don’t get if you pay cash.
