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Credit Card Importance

Hi Friends! Today, I personally wanted to write about Credit Card Importance in the current era and why everyone should have a credit card. I have summarize all the benefits, pros, cons of of having a credit card.

To get instant approval of credit card, you should apply online.

Business woman with credit cards thinking how to spend the money

Credit Card – Basics

To start with, lets first see why everybody is crazy about credit cards? Why everybody has a credit card? If you have such question let me clarify you a few things. In the upcoming era, everybody is required to have card. Or we can quote it by the term plastic money. All the upcoming Government would going to support it. Basically, Government wants to reduce the cost of printing money. And this is one reason why Government understand Credit Card Importance and is supporting credit cards or plastic money whole heartidly these days.

Credit Card – My Experience

In upcoming days, without credit card there is no day going on, Let me share my experience with you now.

A credit card may seem like just another tool to help you make purchases. But it can be much more. When used responsibly, a credit card can help you build a good credit history. Which eventually allows you to get loans at favorable interest rates, cheaper insurance and different exciting offers. Credit cards can also help you earn rewards on your everyday purchases and protect those purchases in case of theft or damage.

Credit Card – Benefits

One of the many benefits of using a credit card is that you essentially get an interest-free loan and a grace period of between 21 and 25 days. Here’s how it works: For example, I have a credit card period of Jan. 5 through Feb. 4, with a due date of March 1. Any purchases made within the period can be made interest-free until the payment due date. If I don’t pay the balance in full on or before March 1, I will owe interest on average daily balance.

So, lets sumup the most important behind the increase of credit card importance in India and the world.:

  1. You get interest free loan
  2. Grace period of 21 to 25 days on repayment
  3. You get rewards and cashback on general spends
  4. You get access to lounge of bank’s partners
Credit Card – Cons

Credit Card Burden Cibil down improve

Let me tell you one thing clearly, using a credit card can affect your credit score in several ways, either positively or negatively. You can positively affect the most important credit score factor, payment history, by making your payments on time, 100% of the time. A late credit card payment likely won’t be reported within a few days, but it can be reported to the bureaus and hurt your score.

I will give you a tip to make the payments on time

A minimum payment is the smallest amount of money you can pay each month to:

  1. Avoid damaging your payment history
  2. Maintain good cibil score
  3. Avoid Incurring a late payment fee
  4. Avoid calls from customer service People

Credit utilization, or the percentage of your credit limit that you’re using at any given time, is the second most important CIBIL score factor. We’ll discuss how to calculate this in the next section, but essentially, you should try to keep your debt balance below 30% of your credit limit.

Credit Card Importance of Security Codes CVV Number

On the back of the credit card you will be having CVV Number (3 Digit Number) which should not be shared with any one at any cost, it will lead to misuse of your credit card

Credit Card – Credit Account Age

The ages of your newest and oldest accounts, as well as the average length of all your credit accounts, make up your length of credit history. The longer, the better. You can influence this factor with a credit card by keeping old accounts open and active. And, of course, be patient, because building a great credit score takes time.

Credit Card – Rewards

Many credit cards offer cash or travel rewards on your purchases. These rewards come from any type of purchases you make or the fee paid by a merchant’s bank to a customer’s bank when you use your credit card to make a purchase. Interchange fees vary, but are usually 2% or more, which is enough to cover the rewards rates on competitive Credit cards.

Some credit cards have rewards points of petrol as well to redeem certain types of purchases. However, these tend to be capped at a certain monthly, half yearly or annually If your rewards seem a bit too good to be true compared to typical interchange fees, check your benefits statement for details on spending limits.

Generally some cards may offer cash back as an incentive to use the card, they can help build your credit history just keep a record of your expenses, helping you to monitor your financial activities. They even help to raise your credit score while applying for other loans.

Credit Card – Balance Transfer

We have another option in Credit Cards. If you have another credit card with same limit and if you want to clear the outstanding balance in one card you move a balance from one card to another (typically 3% to 4%). Balance transfers are usually made by people with credit card. You should only pay a transfer fee if the interest you would pay on your current card is greater than the balance transfer fee you’ll pay.


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