Indians have embraced e-commerce websites over the past decade; however, most online shoppers still prefer to use the Cash on Delivery mode of payment for their purchases.
Concerns about security and safety are a major hindrance for wider usage of credit cards. Many consumers are apprehensive when it comes to providing confidential information online because of the possibility of cyber fraud. While it pays to be cautious when using cards for online transactions, however most of the fear is unjustified. Incidents of cyber-crime in most cases can be easily prevented if you take adequate precautions.
The case of Saurabh, an online shopper from Bengaluru, helps shed some light. Saurabh made all his purchases online using cash, but this slowly changed after he got his first credit card. He gradually began using the card to pay restaurant bills, book travel tickets, and pay his bills. The lure of cashback offers, discounts, and EMI options on other online purchases soon encouraged him to try using credit cards for online shopping as well. Within a few months, he realized that he was able to save about INR 2,000 of his spending of roughly INR 40,000, while also enjoying other benefits.
When you use credit cards in a responsible manner, you can enjoy several cost-saving features. It is important to ensure that you do not overspend with your card and follow certain safety precautions. If you can do this, you will reap several benefits. Some of these include:
Interest-Free Amount
Every card issuer provides users with a credit limit, which is the maximum amount that you can spend on the card. Card holders receive a monthly statement, which shows the amount that should be paid before the due date. It is recommended that you pay the entire amount of your bill to avoid paying finance charges. This gives you interest-free money for your purchases. Users are advised to check the credit card interest rates when availing cards. These rates often vary between 1.99% to 3.40%.
Bonus on Signing Up for New Cards
Most card issuing companies offer signing up bonuses after approval. These may include travel miles, cashback, bonus points, or free gifts. Compare the various credit card offers available from reputed institutions such as Kotak Bank before you sign up for a card. This will allow you to get the best possible deal.
Cashback on Spends
Several credit cards provide users the opportunity to receive reward points or cashback offers on their spends. Depending on the type of card, you can receive different kinds of offers on dining and restaurants, hotels and travel, online shopping, and entertainment. Institutions like Kotak Bank have numerous tie-ups with restaurants, cinemas, and other merchants to provide maximum benefits to their card holders.
Build Your Credit History
Many consumers are unaware that using cards can be a good way to develop their credit history. As you spend on the card and make timely payments, you are able to improve your credit score. A higher credit score will give you an edge when you apply for other loans, such as a home or automobile loans, with better rates and larger amounts.
Emergency Funding Option
Credit cards can be used to cope with an urgent need for funds during a medical crisis or in other emergency situations. Being able to arrange for cash in a short time may be difficult and using cards at such times can be beneficial.
Irresponsible usage of credit cards can result in debt and an added financial burden, which is the reason for most of the horror stories that revolve around card usage. If you use a credit card in control and follow adequate precautions, you can enjoy a wide range of benefits and discounts. If you believe you can use a credit card sensibly, there is no reason why you shouldn’t sign up for one right away.
