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Credit Cards—Best Friend or a Foe?
Posted on Wednesday, January 25th, 2023 | By IndusInd Bank
What is the first thing that comes to your mind when you hear the word ‘credit card’? Is it fear of debt or luxury of extra budget? Well, financial experts suggest credit card as a powerful tool to boost your financial health and become more disciplined with money. On the other hand, there’s a general view among people who see credit card as a debt trap.
Are you also confused?
Let’s get to know a bit more in detail about what all comes along when you get your credit card.
- Extra Budget for Extra Happiness: With your credit card, you get to enjoy extra monthly budget. So, there’s no stopping yourself or restricting your shopping urge at the end of the month. Just use your credit card and repay later in full or in convenient EMIs.
- Watch Your Spends: While enjoying extra budget, you must be very cautious while spending and using your credit limit. Overspending with your credit card beyond your repayment capability will push you in debt over time. Therefore, it is highly recommended to follow a conscious spending practice.
- Treat Yourself with Welcome Benefits: Let’s be honest! You sure do like complimentary things and freebies, right? Mostly, all credit cards come with exciting welcome gifts such as brand vouchers, airport lounge access, hotel stays, and much more. In addition, some credit cards also come with annual fee waiver option when you spend a certain amount. Furthermore, there are certain credit cards with incredible offers yet no joining and annual fees.
- Pay Attention to Hidden Charges: One of the most irksome things about a credit card is the tricky terms & conditions associated with it. Sometimes, surcharges and hidden charges make up a significant part of your credit card bill and these often hurt your pocket and budget. Therefore, it is highly recommended to read the terms & conditions of your credit card thoroughly.
- Relish on Rewards & Discounts: Apart from welcome benefits, credit card users also get exclusive offers from numerous brands time to time. This could be in the form of cashback or an instant discount. Moreover, credit card users are also rewarded with reward points on every transaction they make. These reward points can be used to avail brand vouchers or simply be converted into cash.
- The Pain of High Interest Rate: One of the downside of a credit card is the high interest rate linked to it. If you miss on settling your credit card bill on time, then high interest charges are levied on the bill that further increases your debt. Therefore, it is recommended to set a monthly reminder for a day on which you clear all your outstanding bills.
- Improved Credit score: A credit card is one of the simplest and most effective ways to improve your credit score. To improve your credit score, simply use your credit cards to pay your bills and make sure you clear off your Credit Card dues on time. Also, ensure you only use a small portion of the available credit limit on your card.
With all the information above, you must have gauged as to how a credit card could be both your best friend and a foe. However, going by the advice of leading finance experts, it is recommended to own a credit card to build creditworthiness and financial strength.
Find the best credit card for you, here!
IndusInd Bank offers various instant credit cards that will fit into your lifestyle seamlessly. You can be a travel enthusiast, movie buff, or a regular shopper, we have an ideal match for all your needs.
Apply for your Credit Card today!
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
