Transactions through credit cards have garnered wide acceptance throughout the country, for it offers the much-sought-after convenience and security along with several customer loyalty benefits. India has witnessed 27% growth in the credit card users in last year and is expected to see continuous growth even in the coming years.
According to recent statistics, the transaction rate using credit cards has gone up by a substantial 30% in the year 2018-19. To make big-ticket purchases individuals no longer need to carry an ample amount of cash as they can resort to credit cards.
However, if used cautiously, credit cards can be put into much use; otherwise it can lead you into dealing with debts usually caused by overspending and missing dues. Customers who responsibly make use of credit cards can combat high fuel prices and reap the rewards and incentives offered by the same.
Like every financial tool, credit cards too have a specific share of pros and cons. A list of credit card advantages and disadvantages are elucidated below.
Benefits of using credit cards
If credit cards are used sensibly, it has a range of benefits that can prove to be advantageous for the customers.
- Increase in purchasing capability – Customers who are willing to make an expensive purchase, but are not carrying liquid cash can resort to credit cards. Through credit cards, they can avail a loan from the revolving line of credit against their account.
- Systematic tracking – The expenditure statements of the credit card provided by your preferred credit card issuer helps you to streamline your expenses and keep a check on your tendency to overspend.
Moreover, timely bill payment also helps in building a good credit score. Credit cards are considered as one of the best financial tools available to improve one’s credit score.
- ● Secure bill payments – Credit cards are an ideal financial tool for making instant payments. An individual can utilise credit cards for online purchases and safely transact whenever necessary.
- Premium rewards – Credit cards offer lucrative reward points and incentives for the benefit of the users. You can redeem your credit card reward points and avail cashbacks, discounts, gift vouchers, and several other attractive offers.
Almost every financial institution including NBFCs offers credit cards for the benefit of their users. Similarly the Bajaj Finserv RBL Bank SuperCard, presented by Bajaj Finserv is one such example of a credit card that draws most number of customers with its appealing features and incentives.
Bajaj Finserv also presents pre-approved offers, which ensures streamlined application procedure for individuals with financial requirements. This feature is available for financial products including personal loan, home loan, business loan and other secured loans. To check your pre-approved offers and avail instant funding, you are required to mention some necessary details consisting of your name and contact number.
Disadvantages of using credit cards
Credit cards can prove to be perilous if not managed sensibly, thus increasing the possibility of debts. Below is the list of how the use of credit cards can prove disadvantageous on some occasions.
- Susceptibility to debts – A risk that most credit card users face is accumulating debts. This is mainly caused when the users fail to repay their borrowed money, and the interest keeps on mounting. Proper budget and finance management can keep this situation at bay.
- Fraud risks – Credit cards often succumb to fraudulent and adulterations; it is vital for the individual to check their credit card bills to determine all the records are listed accurately.
However, most prominent financial institutions offer multiple layers of security to prevent such occurrences. Customers can also enjoy fraud protection and instant card blocking services to prevent any unauthorised transactions. It can help them get the most out of a credit card.
Therefore, credit cards can be useful financial tools only when it is used sensibly. Individuals before opting for credit cards should consider referring to the credit card advantages and disadvantages to bring balance in their expenses and savings.
