Benefits of credit card: All you need to know about pros and smart usage!

Published on: 17 July 2023

When exploring how to get instant credit and enjoy cashless transactions, credit cards are one of the most popular options you may come across. Getting a credit card can be quick and easy and offers multiple rewards. The range of benefits of credit cards is amplified when you use them smartly.

Read on to explore the advantages of credit cards and how you can harness their power.

Advantages of credit cards

Gets you credit quickly

Applying for a credit card from any reputable bank is usually very easy. With minimal documents and instant approval, you can get a credit card delivered quickly. If you have maintained an excellent credit score, many banks will offer you a pre-approved credit card with joining benefits.

Helps build your credit score

Every time you transact with your credit card, you get an opportunity to build your credit score, which is one of the main benefits of credit card use over time. Make timely repayments to maintain and increase your credit score. This helps you get affordable finance in the future.

Offers flexibility

With a credit card, you can not only use the amount you have left up to your limit but also get the freedom to:

• Withdraw cash from ATMs
• Get a short-term personal loan

These features make it easy for you to get access to money when you need it. Make sure you check the accompanying charges and fees before you go ahead to avoid unpleasant surprises.

Provides access to umpteen offers and discounts

Whether you are shopping, dining or booking movie tickets or airline travel, your credit card can offer you money-saving deals. You also rack up reward points as you spend. Redeem them to get discounts or to buy electronics and other products. You can also get access to additional privileges by using credit cards, such as concierge services or complimentary rounds of golf.

Aids in converting your expenses into manageable instalments

A credit card allows you to convert your expenses into manageable EMIs. Utilising this as one of the advantages of credit card use, you can pay a lump sum with your card and divide the amount across a tenure that fits your budget. This is another great feature that also comes at a specific cost. Make sure you factor it in before going ahead.

How to use credit cards smartly

When you use a credit card without being careful, you risk harming your finances. Not being aware can turn beneficial features into disadvantages of credit cards. One of the best ways to leverage it is by setting a limit for yourself and tracking your credit card spending habits.

Also, ensure that you know and respect your credit card limit. To enjoy a higher credit limit, ensure you have a good credit score. One thing to remember is to pay your credit card bills on time every month. This helps you build your score and prevent high-interest charges from being tacked onto your next bill.

As you use credit cards and build your credit profile, you can create a good credit history. If you need funds to upgrade your life or achieve your goals in the meantime, look no further than Fibe. Simply install our Instant Loan app or register on our website to enjoy quick access to funds up to ₹5 lakhs within minutes.

FAQs on benefits of credit card use

What are the advantages of using a credit card?

A credit card is an excellent option for shopping, dining and spending on other daily expenses. It helps you build your credit history and score and also gives access to a range of deals and discounts. Today, one of the other big advantages of credit card use is the security against fraud.

What are the disadvantages of using a credit card?

One of the disadvantages of credit card use is that your credit card limit can be restrictive for big-ticket needs. The interest rates are also higher on a credit card when you do not pay your bills in full and on time. This can result in high-interest debt that is not easy to repay.

What is the insurance protection that a credit card offers?

Some credit cards offer travel or accident insurance as well as purchase protection. This facility is one of the benefits of credit card usage. These types of insurance plans come bundled with the credit card and go up to a specified sum assured based on fulfilling specific terms and conditions.

Can I withdraw money from my credit card?

Many credit cards allow you to withdraw cash from the ATM of the issuer’s branch. Before proceeding, check the costs of this facility.

What are the risks of having a credit card?

Credit cards give the illusion that you can afford more than what your budget truly allows. With a credit card, it is easy to fall into the debt trap. These are some of the disadvantages of credit card use.