Nowadays, credit cards have become an indispensable method to make your purchases more affordable, user-oriented and cozy. Credit cards help us become financially independent. With its ease of use and comfortable pay-back options, a credit card has become a valuable part of our lives. Below we have revealed Pros And Cons of Credit Card In India.
Credit cards are a crucial financial tool which offers admittance to instant credit during a money crunch. You can deal with your incomes better with the different highlights and benefits of a credit card. Like all other financial tools, credit cards also come with a lot of advantages and disadvantages. If you’re late to the world of credit card, here is a complete list of merits and demerits of credit card in India to check out.
Benefits of Credit Card-
When a credit card is used with financial discipline – it can offer a couple of benefits in terms of ease of use, comfy, convenient, and luxury perks. You can get various benefits from a typical credit card, which are given below.
1. Provides The Privilege To Pay Later –
A credit card provides the best choice to pay purchase later date. With a credit card, you can take care of purchase after getting your monthly income. It is the best choice that helps to make your burden easy.
2. Trouble-Free To Make First-Class Purchases –
The Credit cards help to turn total cost into easy, manageable EMIs when you buy high-end products using the credit card. EMIs permits cardholders to spread out their installment over a couple of months.
3. Offers Reward Points, Incentives And Member Facilities –
One of the primary benefits of using a credit card is the rich rewards and member perks. These can be in the form of exclusive discounts, gift vouchers, cashback, discounted movie tickets, reward points, discounts on e-retail destinations, and so on. These can make your buys fulfilling. You can utilize the reward points to purchase stock, access to railroad or air terminal lounges, and more, or use the cashback to shop considerably more.
4. Boost Credit Score –
Using a credit card facilitates you to make reliable credit history for yourself. With a great credit card score, you can apply for a loan and get a loan at an affordable price.
5. Helps You Make Cashless –
Not everyone wants to carry cash all the time because a large amount of money can be risky in case of your money stolen. Without cash on hand, credit cards are a more convenient and feasible option to make purchases anywhere. A credit card is a lot of easy to carry in pocket and wallet. In the case of robbery or misfortune, your cash is as good as gone with money, but with a MasterCard (credit card), you are never responsible for any unapproved charges made against your card.
6. Affordable Currency Conversion –
One of the best key benefits using a credit card is to save money on currency purchase in another country. Credit cards such as MasterCard or Visa can save up to 8% currency as compared to the cash amount.
7. Helps To Track Expenses –
A credit card tracks all spending and purchases that made using the card, which could be helpful when chalking out a financial plan or for tax purposes. It records all purchase whose sent as your monthly credit card statement with a detailed purchase list. Credit card is useful in budgeting and building fruitful plans.
8. Credit Cards Have Theft & Scam Protection –
If you mislay any money or the card gets to rip off and has scammed, the liability is guaranteed by the bank. In contrast, if physical cash is stolen and missed, it is difficult to receive the money-back.
9. Helps To Provide Amends & Compensation –
Credit cards offer travel insurance against cancelled trips, lost luggage, and even death. The coverage that one gets relies upon the individual banks and offer terms.
10. Creating A Line Of Credit –
Credit cards provide the best possibility to build up a line of credit. This is very crucial as it permits banks to see an active credit record, based on your card usage. Credit cards boost the chances of the potential loan applicant’s for future loans or rental applications.
Drawbacks Of Credit Card or Disadvantages Of Credit Card –
Credit cards are an effective financial instrument but can also be a reason for a financial disaster if not used properly. Here is a list of some lapses related to credit cards that you should always need to keep in mind.
1. It’s Unavailable To Most Individual in India –
If you want to use a credit card, eligibility for a credit card is a must. To be acceptable for a credit card, an applicant should initially have an ample credit record. A credit record, or CIBIL score, says banks how hazardous it will be to provide you with a MasterCard.
2. Enhance The Possibility Of Overuse –
Fulfilling all your needs, a credit card can be lead to you overspending. If you don’t purchase payment in the monthly period, you need to pay high-interest rates on your future payments which can make you a debtor.
3. High Rates Of Interest –
Neglecting to take care of the excellent dues on your credit cards inside the due date causes high-interest fee. You can abstain from paying extra interests by making comfortable reimbursements every month.
4. Fraud & Scam –
Credit cards are a lot more secure than carrying money, still, they are sensitive to online fraud. So, you need to be alert from stealing your credit card information. If you have become suffer from credit card scam, you need to inform your respective bank within three days. If the cardholder fails to apprise the bank, he/she will incur liability on the fraudulent transaction.
Note: You can take a few steps to protect yourself against fraudulent transactions & credit card scam by:
- Reducing Foreign transactions on the card when it is not needed
- Not checking suspicious/doubtful looking SMS/emails
- Not handing over your credit card
- Not sharing credit card details and PIN to other
5. Credit Card Contains Hidden Costs –
Credit cards seem to be convenient and simple at the starting, but have a couple of hidden charges that could rack up the costs overall. Credit cards have various expenses and charges, for instance, late EMI expenses, joining fees, renewal expenses and processing fees. Credit cards impose a certain amount for all the services they offer.
6. It Can Destroy A Credit Score And Finances-
While credit cards can help you create a decent FICO score, they can also make your score plunge low. You can justmake your score by making continuous purchases and making your installments on time.
By way of conclusion, we can say that we can opt for a credit card but only keeping in mind the merits and demerits of a credit card. Credit cards can be used to bring comfort and luxury into your life if it is used with full safety. Credit cards are very useful in beginning you on your credit journey and keeping a decent score. In spite of, if they are not used cautiously, then they will hurt you both in the short and long term by ruining your financial assessment and funds. Along these lines, you should consistently take care of your credit card bills in full and continue profiting the advantages they provide.
Read the above Pros And Cons of Credit Card In India to avoid the penalty and loss so you can enjoy a worry-free and restful future with your credit card.