Benefits of Credit Cards – Reasons You Should Start Using One

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17 April 2020, India- The biggest myth that I have heard in my career is that credit cards always make you end up in debt. There are still many people who either don’t purchase a credit card or avoid using it despite having one because of this fear. But the truth is that you can enjoy many benefits of a credit card if you make wise purchases.

Let’s discuss the pros of credit cards over cash. If you’re against using credit cards, it will change your mind.

Improved Purchasing Power – One of the biggest cons of a credit card is that it can save you in an emergency when you may be short on liquid cash. If you have to make a big but important purchase, but you know that you won’t have the money until next month, you can use your credit card. And within 45 days of making the charge, you can pay the credit card company back.

Good Credit Score Benefits – Your credit score is calculated using your credit utilization and record of timely payments. The better your credit score, the more advantages you’ll get, such as:

  • Better chance of loan approval
  • Lower interest rates on loans and credit cards
  • Approval for credit cards with better rewards and benefits
  • Discount on loan processing fees
  • Approval for a higher credit limit
  • More interest rate negotiating power

You can get such advantages of credit cards if you use them responsibly. To build a good credit history, making charges that you can afford and making payments on time is key.

Rewards and Benefits – Credit card companies tie up with merchants and offer many profitable deals and rewards. For example, an RBL bank credit card offers milestone bonuses and reward points with every purchase that you can redeem in the future.

Most credit card companies offer benefits such as fuel surcharge waiver, discounts at partner stores, and travel benefits such as free airport lounge services. Moreover, as your credit limit increases, you can get access to bigger and better rewards.

Better Organisation of Money – For effective finance management, you must know where you are spending your money. However, if you always purchase using cash, it can get difficult to track expenses down to every penny. So, to reduce your cash transactions and track them easily, you can use a credit card wherever possible. Moreover, you can view and download the expenses that you paid for using a credit card. And when all your major expenses such as rent, fuel, utility expenses, entertainment, etc. are in one place, you can know exactly where to cut back and save money.


Convenient Foreign Transactions – It is any day better to travel overseas with a credit card than with a lot of cash. You can avoid the risk of cash being stolen and also save on the currency exchange cost. Moreover, making foreign transactions through a credit card is much more convenient. Though most credit cards include foreign transaction fees, you can choose one that does not charge cardholders against foreign transactions.

Credit cards can be a blessing, but only if you keep your expenses in check and do not go overboard with spending. So, use it wisely, and you will be able to save significantly and get your finances on track.

Author Bio:


Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at