Shopping in the festive season is common. During this time, from small items of kitchen and furnishings to big appliances are purchased. Gifts are purchased to give to each other. So sometimes the expenditure goes out of the budget. In such a situation, a credit card can be used to handle your festive expenses. Also can give you some benefits, how come we know…
Helps in building a strong credit score
A credit card transaction is a kind of loan, which has to be repaid within a fixed period. Therefore, credit card repayment over a fixed period has the same positive effect on credit score as other loan repayments. Although there is no interest to be paid on the repair within the time period fixed in the credit card, the credit card is a cheap and convenient way to make a credit score. All you have to do is repay the credit card dues on time and avoid spending more than 30 percent of the credit limit. Not doing so has a negative effect on the credit score.
Benefits like Reward Points, Cashback, Discount
In order to attract buyers during the festive season, many merchants and retailers offer a wide range of benefits in the form of more reward points, discounts, vouchers, cashbacks etc. on credit card transactions. Due to all these offers, your total cost is reduced by doing transactions through credit card. However, keep in mind one thing that keeps redeeming the rewards points from time to time as most credit cards also have their expiry date.
Many credit cards can increase interest-free period
When you pay a bill with a credit card, you get an interest-free period for repayment. During this period you do not have to pay any interest, only the money spent is returned. That is, in this period, you can pay your entire dues without additional expenses. This period can be from 18 days to 55 days. Those who have more than one credit card, should spend on a different credit card instead of spending big amount from the same card. With this, they will have more interest-free period to repay the credit.
The convenience of converting large expenses into EMI
When the customer is unable to make a one-time payment for the purchase of expensive items like laptop, television or smartphone, he resorts to EMI. This is very common in the festive season. In such a situation, the EMI facility of credit card is very useful for you. You can convert large expenses from credit card to EMI completely or partially depending on your repair capacity. Tenure of EMI conversion can go up to 5 years so that the customer can comfortably repay his dues. However, whether or not interest will be charged during this period, find out about how much it will cost.
No Cost EMI Facility
Many credit card issuers offer no-cost EMI in partnership with merchants. It is for both online and offline shopping. In no-cost EMI, the merchant bears the interest cost, while the customer only has to pay the amount spent on the purchase through EMI. Some card issuers also offer additional discounts on purchases through No Cost EMI to their credit cardholders based on the partnership with the merchant/manufacturer.
Pre-approved loan for the immediate need of fund
Credit cardholders can easily get pre-approved loans on credit cards if they are in urgent need. However, your transaction track record and repair history should be good for this. The pre-approved loan is passed on the credit limit of the cardholders. There is no documentation in pre-approved loans, due to which it is processed as soon as possible. Sometimes it is found immediately and sometimes it takes just a few hours. Some credit card issuers offer their credit cardholders additional credit beyond their credit limit, along with the loan amount. However, keep in mind that such a loan may have to pay interest at a rate slightly higher than a personal loan.
Article By- Sahil Arora, Director, Paisabazaar.com