Opinions are mostly divided when it comes to the usage of credit cards. While some may believe that it is one of the best financial decisions to get a credit card, others may not share their sentiment as credit cards can lead you to run up debts if not handled properly. Whatever be your opinion, credit cards act as a great source of financial support when you are short of funds.
All credit cards are issued by banks and NBFCs. With the popularity of credit cards growing steadily, there are a lot of options on offer. You can choose one that you like and it could support your financial needs such as your expenses and spending habits. Having a credit card is not just a source of funds when you are short of it, it is also a source of reward points, cashback, discounts, and offers. RBL is one of the oldest private sector banks in India, with its headquarters in Maharashtra. The bank serves 3.15 million customers and offers banking services in the spheres of Corporate and Institutional Banking, Commercial Banking, Retail Banking, Agriculture & Development Banking, and Financial Markets. Be it applying for a credit card or opting for RBL credit cards payment, everything can be done online. Some RBL credit cards are also made with a specific purpose in mind – such as credit cards for shopping are made to buy items either online and offline with great benefits like cash back, reward points, and discounts.
How are Credit Cards Helpful?
Most of the personal finance experts would advise you from using credit cards. There are many reasons for that – one of them being that you would most probably end up in debt by spending money irresponsibly. However, if you deem yourself financially responsible and use it in such a way, you would be able to reap the harvest in no time. Here are some strategies to employ while opting for credit cards:
- One-Time Bonuses: One of the best benefits of credit cards is the one-time bonus you would be getting when you opt for one. Often, users with a great credit score would be able to get these bonuses within the first several months of opening the account. You can also get bonuses and reward points that can be redeemed for travel, gift cards, merchandise, statement credits, or checks. A debit card, on the other hand, would provide no such opportunities when issued.
- Reward Points: This is one of the major benefits of using a credit card. With every purchase they offer reward points when then accumulated over a longer period of time can be redeemed for travel, gift cards, merchandise, statement credits, or checks. If you have an affinity for certain categories and brands, why not use a credit card offering partnership and greater reward points than usual? You would be able to reap the rewards, discounts, and other perks?
- Safety: Credit cards are also safer than debit cards. If your credit card is stolen and then used, the money would not be deducted from your bank account directly. In that case, you can inform your credit card company as soon as possible and they would take the measures so that you do not have to pay for the amount. However, in the case of debit cards, the money is deducted directly from your bank account and there is no extra level of security in it.
- Grace Period: As stated earlier, when you pay with your debit card, the money goes directly from your bank account. When you pay with your credit card, your money stays until you pay for the credit card bill. This is great as you do not have to watch your account balance closely in order to buy things you like. Make full payments before the due date to avoid additional charges.
- Cashbacks: When the concept first emerged, it was popularized in the United States with the cash-back credit card by Discover – using the card would get you 1% cashback of your purchases. Nowadays, the idea has evolved and some current cards offer cashback of 2%, 3%, or even as high as 6% on certain selected purchases. It means that not only are you getting a discount on the overall charges but also earning a minimal amount of money that would accumulate into something substantial along the way.
How does Building Credit Score Help?
If you do not have a credit score or want to improve the limit, you can do so by using your credit card responsibly. With proper usage and timely payments, you would be able to earn a great credit score as time goes by. This would enable you to qualify for other credit cards and larger loans. Credit scores are useful when applying for a loan as they show how financially responsible you are. Therefore, building a credit score would help you in a lot of ways.
If you are financially disciplined and can pay your credit card bill to the fullest every month, getting a credit card would be beneficial. Try to use your credit card for almost every purchase you make and garner the rewards and cashback as you go.