Credit card is a payment card that is issued by card issuers, which is mostly a bank to enable a cardholder to buy merchant goods and service. The cardholder has to pay the bank issuer the amount along with other agreed charges.
The importance of credit cards has not gone done with the entry of payment apps. It is still one of the most preferred choices to raise short term capital. While the mobile payment apps have been gaining a lot of traction through offers and deals, the credit cards have lots of benefits.
Many do not know that if appropriately used a credit card can help in saving money.
Here are some of the ways a credit card can save your money:
Deals on online commercial portals
It is the first and the easiest way of saving money through a credit card. If you have more than one credit cards, use it judiciously, so that you can get good discounts. Most e-commerce companies have tie-ups with credit card companies. You can get discounts, free EMI’s, or any such offers if you are holding a particular credit card.
So, before using the online e-commerce portal, do check out if there is any discounts or offers available on your credit card or not.
Reward points
Every credit card company has a reward program, and each reward point has value. Some credit card issuers allow converting the reward points into cash. While others provide coupons instead.
So always do research and find out the reward structure of the credit card and whether the credit card issuers allow converting reward points into cash.
Co-branded credit card
If you frequently use services like going to a supermarket, air travel than Co-branded credit cards are very beneficial for you. It helps you to earn reward points which can be used to settle bills at the co-branded partner.
Co-branded credit cards come with additional benefits like additional discounts and insurances. But it does not provide other major benefits other than transacting at the co-branding partner.
Cashback
Providing cashback is kept as an alternative to the reward points driven credit cards.
It is beneficial for those who have limited money because of some of the focus on cashback on utility bills like electricity bills etc. The main focus of cashback is at enlisted partners such as super-stores, food courts and e-retailors.
However, there is a long list of terms and conditions attached to the cashback.
Building credit card rating
A credit score shows the history of loan repayments of an individual. The number stands between 300 and 900. A high number means responsible use of credit in the past and most lenders do prefer to lend to individuals with a high credit score.
Credit card are nothing but short term loan facility and timely repayment of credit card bills ensure good credit score. A high credit score attracts the lender, and you can negotiate a good deal on your future loans.