A credit card has taken the status of a necessity in today’s world. Still if you go around and generally ask people whether they would prefer hard cash in lieu of a card or rather which is better cash or credit card, you would probably end up thinking that after all a credit card is just another pain that technology and information has brought along with it. But wait a while before you actually come to conclude it as many users do not appreciate the benefits that a card brings along with it, we take a general opinion and understanding of a credit card due to lots of frauds, scams and the very word Credit Stuck to it.
A credit card is like any other gadget or tool ( a financial tool ) which has some processes and how-to-use guidelines with it. And any financial institution, apart from its own business motives introduces it for the greater good of the society as a whole. Not that this is a life-and-death kind of vital tool, and so one can do without it. But then if we do not progress and change for better life itself would lose its essence. So using a tool correctly, understanding at least the basics of it is very vital. This is something for your convenience and if used correctly it will bring you a lot of peace of mind, a better financial future and not to mention the kind of rewards that come along with it.
1. Ease of Use
It is amazing in the way they work, there are places or situations when you would rather want to pay and track your expenses as conveniently as possible. Imagine you are a busy and frequent globetrotter, how would you like it if you had to keep bundles of currencies stuffed in your pocket? Sounds ridiculous isn’t it? And companies actually reward you when you use a card instead of cash. Whether it’s the case of paying online bills or your hospital bills, a credit card is always a more convenient ways for such expenses.
2. Limited liability
As long as you have reported your loss of card on time, you loose nothing when your card is misplaced or misused. Where as with cash you never know, you can have a lot of risk keeping a large amount of cash while on vacation or even for business purposes. A lot of credit companies support the good customer in fraud cases and disputes. It is a matter of how you use it to your own good.
3. Shopping
This is one kind of addiction to many and whether its cards or cash, if done aggressively, it can be dangerous to you. But the difference with cards is at least you have time to track and manage what you have shopped and you are getting discounts at many outlets. Therefore as long as you pay on time, you are far better off than using cash.
4. Benefits in disguise
A lot of cards these days are coming with insurance offers, cash back offers and easy credit schemes with competitive interest rates. So when there is an emergency instead of asking from someone (knowing that he is reluctant to spare anything) or taking a high interest loan, you can use the fund transfer scheme for your card. Some companies charge a processing fee and the rest is on zero percent interest which can be re-paid in monthly instalments. Others do have an interest attached to it. If you own a credit card, you are automatically eligible for a lot of discounts and offers which otherwise you would not have been. There are great benefits at gas stations also.
5. Buy now, pay later
This is not a trap as long as you do not fall for it. Yes actually with cards you can buy things in instalment, say when you are setting up a new home or planning a long term holiday. You know each month end you will have the money but to set up a home you need at least the basic stuff today.
All in all, it’s the echo system of finance and households that makes any financial tool good to great. If the issuer, the acquirer, the merchant and the user all work together for each others mutual benefits it will be a win-win situation all the way.
Moral of the story is, Use it (Don’t loose it) wisely as you would have used your cash if you had it.