How to maximise the credit cards benefits?

Credit cards have become a necessity in today’s times. They are valued for the ease they come with and for the ease they provide us. Credit cards allow the user to be able to pay for services without carrying a wad of cash with them. It is convenient and handy and the way of the future in payment modes. The banks too are more than willing to issue credit cards to its customers. This is because of the billions that the banks make in a year by these cards. The card can also be used to study the spending habits and the credit history of a customer. This history can then be used to establish credibility when issuing a loan to the same customer.

The credit cards provide a financial imprint of the customer on the bank’s records and helps them in identifying them. But as it is with any service, a little caution or restrain is necessary and is expected from the cardholder. Below are a few benefits of using a credit card as a mode of payments in today’s times.

Backup in the event of an emergency

A backup in the event of an emergency. This is place first in the list of the benefits of a credit card. Emergencies don’t come by knocking on our door, they surprise us. Emergencies further have a tendency of catching us off guard. An emergency may come in the form of a job loss, an auto repair or the more dreaded medical emergency. The cost of the emergency too might be or might not be within the reach of the individual.

For such times, a credit card is a godsend. Especially in the case of a medical emergency when the time is short and sources have dried up. The convenience of being able to pay for a service at the swipe of a card is one that can only be explained by the ones who have gone through it. The same is the case with auto repairs which can come unexpectedly and can cost a fortune. The greatest advantage of possessing a credit card is the access to a large reserve of cash without carrying it in one’s pocket.

Online payment

Card payment allows you to pay for services or buy commodities online. India is an up and coming country in terms of number of internet users. The figure is expected to touch 450 million by June 2017 and there are additional 750 million users waiting to be connected in Rural India. With these numbers, E-commerce or online retailing of goods is an essential part of the fast paced life of the citizens of the country. And credit cards are the favored modes of payment on the online portal.

Furthermore, this has been evidenced by the rise in number of credit cards issued and the overall credit card spending over the years. For example, the number of credit cards issued in FY 2014 increased by 0.70 million to 20.3 million from 19.6 million of FY 2013. The overall spending too went up by 17% for the same time period. Credit cards are also preferred as they can serve as a protection against wrongdoings. For defective merchandise or billing errors or in the worst case scenario of theft, payments from a credit card can be withheld.

Rewards

As an added incentive to prefer credit card as a mode of payment, there are various lucrative offers and incentives. These awards and incentives will range from cashback to rewards to bonuses, and all these are there to promote your usage of the credit cards. In the cashback incentive cardholders will receive 0.5% to 2.0% of their net expenditure as an annual rebate.

Moreover, the rewards program will let you select the rewards you get from a list in your statement and depends on the amount you have spent. Other bonuses include points that you earn by using your credit cards. These points can then act as coupons and be redeemed for services. Here I would like to interject saying that though these incentives sweeten the shopping experience, care should be exercised. Too often have these incentives driven the desire of shopping and landed the cardholders in a credit card debt trap.

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