Credit cards have been historically termed as a risky tool. This notion stems from the risks associated with reckless use of credit cards, high interest rates, and theft. However, over the last decade or so, the image of credit card has seen a sea change in India. Higher levels of income rise of the urban population, increased level of education and financial awareness and technological advancements, and adoption have all played its part in the increased use of credit cards. Today, there are several credit card companies which are vying for the attention of the customers through various rewards programmes and other attractive schemes. In the lure of the cashbacks and discounts, many young adults have signed up for credit cards.
- Rewards Programmes
Rewards programmes only makes sense when you pay off the amount before the interest-free period expires. Otherwise, it can prove to be of little value to you as you would perhaps be paying for the rewards in the form of interest. Therefore, if you are making credit card purchases with the aim of availing discounts or collecting reward points, then you must always ensure that you make the payments before you are charged interest on the amount.
Paying off your credit card debt is one of the most important financial disciplines that credit card holders should maintain to ensure their overall financial wellbeing.
- Credit Score
In this day and age, financial security is an absolute must. While there are many people who invest or save a lot of money for financial emergencies, the majority still depend on loans from the banks or other financial institutions. In addition to that, wealthy people too, apply for loans when purchasing houses and cars, or expanding their businesses for either need for extra capital or for the tax benefits. However, for a successful application of a loan, the most important thing is the credit score. It is s rating based on your credit history and financial discipline given by the CIBIL. When you apply for a loan, the financial institution to whom you have applied asks for your credit score determine if you should be given a loan or not, and what will be the terms and conditions of your loan.
If you miss credit card payments, then it automatically creates a bad impact on your credit score. Hence, you should make regular payments to ensure that you have a good credit score.
- Payment Applications
In the last few years, there has been a spectacular rise in the number of online payment applications in India. This has given rise to cut-throat competition. These mobile applications are constantly trying to outdo each other through service and offers. As a result, the customer is turning out to be the winner. When you make a credit card bill payment using one of these applications, you get a variety of offers which includes cashbacks, discounts, and gift vouchers. Therefore, before you make your payments using just about any application, do make sure to check out the various offers and benefits on offer. This can save a lot of money for you.
- Reduce Financial Risks
While there is no harm in using a credit card per say, but if you are not paying your credit card bills on time, then the historic risks of credit cards still exist today. Therefore, it is essential that every credit card holder analyse their credit card spends and pay their credit card bills in a systematic manner. Otherwise financial risks like debt and high interest rate may create a severe financial dent. Moreover, the better your track record of paying the credit card is, the better are your chances of winning attractive offers in the future. These offers could be related to online shopping, movie tickets, taxi discounts and so on. So pay your credit card bills on time enjoy the unlimited benefits on offer.