MoneyMagpie

Sep 27

What are the benefits of using a credit card?

As India slowly marches towards a cashless economy, the number of credit card users have gone up manifold over the last couple of years, particularly among urban consumers. A survey conducted by credit information company TransUnion CIBIL found 19% of urban consumers likely to apply for credit cards in the future. So, what’s prompting customers to opt for credit cards? It’s a host of these benefits associated with them.

 

Instant liquidity to meet unplanned needs

Credit cards are a mode of instant finance. Every card allows you to borrow from the sanctioned limit as and when required. This comes in handy to meet unexpected cash needs.

There are situations when you don’t have enough money in your savings account to address unplanned requirements. In such a scenario, credit cards are your most trusted ally.

 

Helps you build a credit score and history

A healthy credit score and history are essential to avail loans, especially big-ticket ones such as a home loan or a loan against property. It’s not uncommon for lenders to reject loan applications of first-time borrowers as they don’t have any credit score and history.

If you don’t have a past record of debts, lenders may not be willing to lend to you. A credit card helps you build credit score and history. You need to pay back the amount borrowed from the sanctioned limit within a stipulated time. Once you start doing so, slowly you start building a credit history that helps you to avail big-ticket loans in the future.

 

Avail emergency loan

Today, credit card benefits aren’t just restricted to instant access to funds. New-age credit cards such as the Bajaj Finserv RBL Bank SuperCard allow you to avail an emergency loan. It allows you to convert the card’s limit into a personal loan and get interest-free cash for 90 days. Not only this, the money can be repaid in 3 easy EMIs.

So, this card doubles up as a personal loan in times of need. Note that though availing a personal loan is easy these days, being an unsecured mode of finance, they attract a slightly higher interest rate. However, with Bajaj Finserv RBL Bank SuperCard, you don’t have to apply for a personal loan separately.

When you transact using your credit card, for every transaction, you get points. Generally, the higher the purchase value, the greater the points. Once you’ve accumulated enough points, you can redeem them to avail cash backs and discounts on your purchase.

These points also help you to get discount on flight and railway tickets. Bajaj Finserv RBL Bank SuperCard gives you the opportunity to earn several reward points as a welcome gift.

 

Interest-free cash withdrawals from ATMs

Withdrawals from credit cards at ATMs is an expensive affair. Not only does it attract a high-interest rate but there are also service and transaction charges levied. However, modern credit cards such as the Bajaj Finserv RBL Bank SuperCard allows you interest-free cash withdrawals from ATMs for up to 50 days, charging only 2.5% processing fee.

Thus, credit cards offer you multiple benefits in the long run. Having them helps you meet various financial needs at different stages of life.

 

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