The importance of a credit card is often understated. It is a nifty tool that can transform how you make payments & get you started on your financial freedom journey. Using a credit card can be very rewarding too.
Contrary to popular opinion, credit cards aren’t inherently bad for your finances. Using your credit card in a very responsible manner can help you boost your financial standing. Contemplating the need for a credit card yet? Read on.
When used regularly, credit cards offer a range of rewards. These rewards are usually in the form of reward points, airline miles, or cashback, depending on the type of card you get. For example, you can save a lot with travel-oriented credit cards by redeeming the accumulated reward points or airline miles.
Sometimes, you can save money when you first get a credit card as you may get a ‘welcome bonus’. These bonuses may be in the form of free tickets to events, movies or flights, discount vouchers, or maybe even gift vouchers.
All credit cards come with an interest-free period ranging anywhere from 22 days to 52 days. It allows you to use the card to purchase products and services — and pay for them later! Valuable during emergencies and when you're short on funds.
Here's how it works: Say that the interest-free period on your credit card is 52 days from the start of a billing cycle. Due to this interest-free period, if you use your card to purchase a product on the first day of a new billing cycle, you can pay for it 51 days later.
Some credit cards come with insurance coverage. Depending on the card, you may be eligible for purchase protection insurance, personal accident insurance, or both. P.S. You don’t have to pay any insurance premiums!
Most credit cards instantly allow you to avail a small loan against the assigned credit limit. It can immensely help when you need funds for an emergency. The best part? The process is straightforward and ideally takes only a few minutes.
When you apply for a loan, one of the key metrics that financial institutions look at is your credit history and credit score. Individuals with a long history and a good score tend to get more favourable loan terms. A credit card offers a way to build a credit history and increase your credit score.
All transactions you make using a credit card, including purchases and repayments, are logged and reported to credit rating agencies, which creates credit history. All timely repayments — made consistently over the years — boost your credit score.
One can use credit cards for digital payments. All online shopping websites accept credit cards as a form of payment. Digital transactions are far more convenient and quicker than transactions involving cash.
If you’re still wondering why you need a credit card, you can make safe and highly secure transactions online (and offline) with a credit card. In the case of offline transactions, you need a secure four-digit PIN associated with your card to authorise payments.
Similarly, online payments need a One-Time Password (OTP) sent to your registered phone number. Thanks to these multiple security steps, it is very tough for unauthorised individuals to use your card.
Credit cards can help with financial management & create wealth in the long term! Every credit card transaction gets logged, and a statement of your usage gets sent to you per billing cycle. By reviewing your credit card statement (or your Fi Money account statement), you can track your expenses & curb your spending.
If you’re a frequent traveller, then you must get a credit card for yourself right away. One of the many benefits of a credit card is that it can be used virtually anywhere in the world to make payments. It single-handedly eliminates the need to convert cash each time you travel.
Many people think credit cards are just another way to make payments. However, you can use a credit card to convert big-ticket purchases into smaller, more manageable EMIs (monthly instalments). Using the balance transfer feature on your credit card, you can consolidate your debts and reduce the impact of interest.
Between BNPL, EMIs, access to Emergency Funds, & building a credit history — you probably understand the importance of a credit card. So, if you don’t have one already, now may be the right time to apply for one. However, before you go ahead with your credit card application, compare multiple cards with one another. It will allow you to choose the one that fits your requirements.
Of course. Getting yourself a credit card is the best financial decision that you can make. It offers so many benefits, and when used responsibly, it can help you manage your finances much better.
Three of the most important benefits you get to enjoy by getting yourself a credit card and the ability to buy now+pay later, the various rewards you’re entitled to, and the ability to build and improve your credit history and score.