5 key benefits of credit cards you should know before applying
Credit cards have evolved far beyond their initial form as plastic cards. They are now integral financial tools that can significantly boost your financial management and lifestyle. Understanding and knowing these key benefits before applying will help you choose the correct credit card designed for your needs.
Below are five key benefits of using credit cards you should know about before applying:
1. Build and improve your credit score
Using credit cards responsibly by making timely bill payments helps build and maintain a strong credit profile. This boosts and improves your chances of securing better personal loans and other financial products in the future.
2. Rewards, cashback, and discounts
Most credit cards offer reward programs tailored to meet various distinct lifestyles. For example, travelers often seek credit cards with lounge access and travel benefits, whereas everyday shoppers prefer rewards on groceries and utility bills. These rewards can be later redeemed and used as vouchers, travel tickets, or statement credits to help in saving money.
3. Financial flexibility and interest-free credit
Credit cards provide users with an interest-free grace period of around 45-50 days. Many also offer the opportunity to convert expensive purchases into manageable equated monthly instalments (EMIs). These services are sometimes provided even with no additional costs, thus easing budget efficiency and management.
4. Enhanced security and convenience
Widely accepted both in the country and abroad, credit cards are tools that provide safer, more convenient payments compared to cash. They come with features such as zero liability on lost credit cards, fraud alerts, purchase protection, along other similar features that provide peace of mind. It is important to keep in mind that these are credit lines, i.e., credit products that need to be handled with caution to avoid misuse and ensure complete security.
5. Additional perks and emergency credit
Credit cards often include lucrative perks such as concierge services, travel insurance, and lounge access. They may also provide users with emergency credit or instant personal loans for unforeseen financial needs.
As Deep Agrawal, Head of Payments at PhonePe, succinctly puts it, “Credit cards are evolving from standalone products to integrated financial instruments connected with platforms like UPI, enabling seamless transactions across millions of merchants. Choosing the right card based on your lifestyle and spending habits can unlock these versatile benefits.”
That is why, before applying, you should assess your spending patterns and repayment capacity carefully. Used responsibly, credit cards can be a powerful tool to manage your finances and build long-term credit health.
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Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards, and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risk,s such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
