Credit cards can be your best financial friend who never refuses to lend money. It is one of the easiest ways to obtain surplus funds for managing short-term financial obligations. You can use the pre-approved credit limit to pay for almost all expenses. The issuer sets the credit limit after analysing the individual’s credit profile, repayment history, income, etc. The growing popularity of credit cards has brought more companies into this financial segment. Today, users have the option to choose from a variety of credit cards depending on their shopping patterns, lifestyle, etc. For example, a travel credit card is ideal for frequent travellers and can save them a decent sum of money.
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Why use a credit card for all shopping expenses?
One can use credit cards to pay for almost all shopping expenses because it is widely accepted. The best credit cards in India offer varied rewards and bonuses to customers, making it worthwhile to own plastic money. Let’s take a quick look at the top ten reasons why you must use a credit card every time you shop.
1. Builds credit history
The first and most important reason you must use a credit card is that it helps build a credit history. Repaying the credit bills on time can improve your credit score significantly. Multiple factors require consideration for computing credit scores, and repayment history is a significant contributor. Using your credit cards wisely on shopping expenses can quickly build a rich credit history.
2. Cashback offers
The digital era has changed the way people shop. Everything has an online destination, and people find shopping more convenient on these digital platforms. Most e-commerce stores offer lucrative cashback deals and discounts to their customers. One can earn a good cashback amount depending on the type of credit card used.
3. Reward points
Credit card reward points are loyalty points the credit card company offers to their loyal customers. Depending on the card issuer’s policies, card users can redeem these reward points for discount codes or money.
4. Fraud protection
One of the most exciting benefits of making payments using a credit card is that it offers fraud protection. Reputed credit card companies offer consumer protection against any fraudulent activity. Companies like VISA have a zero-liability policy. Users are not held responsible for any unauthorised transactions on their accounts. You must follow the best practices while using credit cards.
5. Expense tracking
All credit cards are linked to a financial account, making tracking expenses more manageable. All spending is recorded for future reference and can be used to track spending patterns. It can be an excellent tool for budgeting. Expense tracking also allows you to analyse monthly/weekly expenses and help you cut down on unwanted goods/services.
6. Grace period
All credit cards offer customers a grace period for repaying the borrowed amount. The users are not required to pay any interest charges during this grace period. It’s a great feature for avoiding credit card debt compilation.
7. No-cost EMIs
Many credit card companies offer no-cost EMIs in partnership with leading brands. It allows credit card users to purchase a high-ticket item using their cards without worrying about full repayment by the due date. They can make payments through easy instalments without worrying about the interest burden.
8. Balance transfer
A balance transfer is an attractive feature offered by some credit cards. It allows you to transfer the existing balance from one credit card to another. It is helpful when the credit card you use charges a high-interest rate. One can quickly transfer the high-interest rate credit card balance to a low-interest rate card. Most balance transfer credit cards charge no interest during the initial period.
9. International transactions
The contemporary world is more connected than ever because of the internet. Today, one can easily shop from an outlet overseas without worrying about logistics or payment options. Most international transactions happen using credit cards. It happens because most credit card payments are internationally accepted. However, the same is not valid for other payment methods like debit cards.
10. Insurance
Most people are unaware of the insurance benefits offered by credit cards. Credit cards can provide a wide range of insurance options with varied coverage. Some most common insurance options include auto rental, travel insurance, and purchase protection. It is crucial to read all terms and conditions associated with these to understand the extent of coverage offered. Always choose a credit card that offers purchase protection. It can help you recover money in case of scams and fraudulent transactions.
Final words
Using a credit card for shopping expenses can be rewarding and has security benefits. After analysing your costs and spending patterns, choosing a suitable credit card is crucial.
