Hi Pankaj.I have been using only debit card for all my groceries and other purchases for past few years as I am skeptical credit cards usage due to late fees,hidden charges etc.I want to know if there is any benifit with credit cards if used with control and paid before due date.I do not understand when people say it is "interest free".Suppose if i have sufficient cash in my savings acct all the time, does it means I should stick with debit card or adopting to use credit card makes sense? Please share your experience in this regard.
2 Answers
Definitely credit card are beneficial product if used sensibly. A famous quote says that "With great power comes great responsibility".
Below are some of the advantages over debit cards:
- Around 30-45 days period credit: Say you swiped your credit card on 2nd Jan and your credit card billing date is 1st every month and payment has to be done in 15 days. So payment for purchase done on 1st jan will have to be made before 15th Feb in order to avoid any late fees or interest. So for these 45 days this amount will earn interest in saving account. This won't be possible in case of debit card usage.
- Rewards points scheme: Most of the credit card comes with reward point scheme. Say you earn 1 point on every 50 Rs spent on card. When you can enough points on card, you can redeem them with some gifts. There are specialized card like IndianOil etc where you can exchange for free petrol too.
- Cashback offers/Dining/Shopping discounts: Most of the credit card companies tie up with retailers like online websites, restaurants and shopping destinations and offer additional discounts.
- Zero liability are reporting loss: In case your card is stolen/lost, there would be zero liability after your report loss of card to credit card company.
- EMI offers: Some retailers also offer free 3-6 months EMI for sale. So there is no processing fee or interest that has to be paid.
Having said that, If payment for credit cards are not made on time, they would charge a good amount of money. So if person can remember last dates of payment and pretty punctual every month, he can utilize power of credit card very well.
Credit Cards have lots of benefits if you are using proper way you can make money by credit cards like if you are using credit card in shopping you can get Rewards points many compony provide cashback offers also
EMI facility-with the help of emi you can buy things no metter you have money in your account if you dont have money in your account you can borrow money from banks and many more benefits to having credit card I found a website called BankBazaar here you can check different types credit card with offers
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