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

  • Updated on: 1 Feb 2024
  • Published on: 17 Jul 2023
Benefits of credit card: All you need to know about pros and smart usage!

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.

What is a Credit Card?

A credit card is a financial product that banks or NBFCs offer and it allows you to transact within a sanctioned limit. This limit is the maximum amount you can borrow from the credit card provider. 

Apart from providing instant access to funds, a credit card offers discounts, cashback, rewards points and other incentives on select purchases. Note that credit card providers charge interest on the utilised amount if the outstanding amount isn’t paid on time. 

Advantages of Credit Cards

Here’s an overview of some benefits you stand to enjoy when you use 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:

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 using credit cards, such as concierge services or complimentary rounds of golf.

Also Read: Learn To Use Credit Card Responsibly

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.

Is it safe to use a Credit Card?

It is absolutely safe and secure to use a credit card. Credit card providers have implemented many safeguard features, which provide protection from fraudulent activities. In addition to the PIN required to complete a payment, you can also turn on alerts for your payment. 

So, if there is any unauthorised activity from your card, you can report it immediately to your bank. Moreover, there is a zero-liability policy offered by credit card providers. This feature comes into play if your bank detects fraudulent or unauthorised credit from your account. 

Here, you do not have to pay your bank any outstanding amount reported as a fraud withdrawal.

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. This can be useful in getting an instant personal loan.  However, 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 Instant Cash Loan of up to ₹5 lakhs within minutes.

You can also get a Fibe Axis Bank Credit Card — India’s first numberless card in minutes through Fibe App.

FAQs on the 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.


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