What is a Credit Card and Why do You Need to Have One?

Credit card

A credit card is a financial tool that allows you to borrow money from a financial institution to purchase various goods and services. It is physically similar to a debit card but differs in the process as it utilises a predefined line of credit allocated by the issuer. You spend within that threshold and repay the due amount to the lender.

The best credit cards in India are quickly becoming some of the most preferred
modes of alternate currency. The number of credit card transactions at PoS terminals have grown at a rate of 28% year-on-year. Further studies show that the total amount transacted through credit cards have reached Rs. 54,235 Crore in 2018, an increase of almost 29.6% in the 12 months from 2017.

There are several financial institutions that offer feature-rich credit cards to eligible applicants. They add several offers and benefits, along with reward programs to entice customers into availing their credit cards. The added convenience and benefits make this financial tool one of the most popular modes of short-term, unsecured finance.

Why use a credit card?

Credit cards offer unmatched convenience as well as several add-on perks making them ideal for today’s financial market. Responsible use can help you learn good financial skills, save money, maintain your savings, and upgrade your financial portfolio.

Let’s take a look at why you should use some of the best credit cards in India.

Added perks –

Many credit card companies provide complimentary offers and rewards that allow their customers to benefit from discounts, cashbacks, complimentary airport lounge access, etc. You can also benefit from reward programs that offer gifts and bonuses against your redeemable points. These added perks are one of the most common reasons why people prefer to use credit cards instead of regular debit cards.Cards like Bajaj Finserv RBL Bank SuperCard offer exclusive benefits like EMI options and discounts on luxury items and goods, reward points against every.

purchase, welcome gifts, complimentary airport lounge access, fuel surcharge waiver, and many other added benefits to their customers. You can also get a loan against your unused credit limit, interest-free for up to 90 days, to cater to your emergency requirement.

Credit score –

Using your credit card is one of the most common and easiest methods of building a
good credit score. A good credit score shows your creditworthiness and increases chances of approval when you apply for a loan in the future. Credit bureaus are likely to consider you as a responsible borrower if you maintain a timely repayment schedule, low credit utilisation ratio, and no defaults.

Safety –

Another reason why many prefer credit cards over cash and debit card is because of its added security measures. Any theft or unauthorized transactions in your creditcard account will not deplete money from your savings. Moreover, you can challenge any unauthorized transactions, in which case your card will be closed while the amount will be reimbursed.

Some of the best credit cards in India also come with several layers of security features. For example, SuperCard offers ‘In-hand security’ and ‘Zero-fraud liability cover’ that eliminates any threats of unauthorized deductions as well as cybercrimes. You can also control and overview your credit card usage via the RBL MyCard application, which adds further convenience for the cardholder.

India’s financial market is well aware of what is a credit card and how to reap the best benefits from such a financial tool. The above mentioned reasons show why credit cards have gained popularity over the last few years, and are likely to become
one of the primary modes of transaction in the near future.

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