Navneet Dubey Moneycontrol News
You may have often been advised against paying with your credit cards. But, making the best use of it actually makes plastic money a boon. It helps you earn several other benefits which may not be possible while transacting through a debit card. You should know the smart way to make the use of it. On one side you may not have to worry about keeping too much of cash when you carry a credit card, however, on the other side, if it is not used within a certain limit, it can actually make you fall into a serious debt trap.
Here are a few ways how can actually score well and earn several benefits while making the proper use of your plastic money.
Credit Score
Using your credit card responsibly is good for your financial health on various fronts. First, disciplined usage, which includes keeping your spends within 40% of your credit limit more often than not along with paying your bills timely and in full, helps you build your credit score. “A high credit score is key to be eligible for future loans that one may need to fulfil life goals like buying a house or to tackle financial emergencies,” said Sahil Arora - Head of Payment Products, Paisabazaar.com.
Travel perks
Many cards offer you complimentary access to airport lounges, not just at domestic destinations but also international ones. The card will define how many times per quarter or per year you can access these lounges. Some cards offer unlimited access to lounges worldwide. The next time you’re travelling and stuck on an uncomfortable chair waiting for your flight, swipe your card and access a lounge instead to get comfortable seating, refreshments, and WiFi.
Navin Chandani, CBDO, Bankbazaar.com said that you don’t just get lounge access at airports through your card. You may also get a range of discounts, deals and benefits that would slash your travel costs if you plan things right. “For example, some co-branded air miles cards may offer discounted air tickets with select airlines. Some may provide bonus air miles during renewal or for spending above a threshold. Some may waive off the base fair on domestic ticket prices. You may even get priority check-in and extra baggage allowance with some airlines, along with an accelerated reward point structure. Your reward points could be then converted to air tickets, meaning more free travel for you,” he explained.
Rewards points
Banks also offer a wide range of rewards points to consumers for their credit card spends. However, to make the best use of these benefits, customers should take cards whose reward point or benefits structure suit their lifestyle and spending pattern. You get the list of offers in the respective bank’s website. You should also that these accumulated reward points come with a validity. Therefore, you should make the best use of it before it gets expired.
EMI option
Credit Cards also help you in making big-ticket purchases on EMIs to ensure your finances are not stretched beyond control. Arora told Moneycontrol that many customers are using credit cards to finance their vacation abroad on EMIs. “Also, most banks work with various merchants to offer the option of no cost EMI, which means that consumers need not pay any interest, which is otherwise associated with the EMI option,” he said.
Other offers and discounts and cashbacks
You may able be avail discounted or free movie tickets over your credit cards. For example, buying your tickets through a well-known booking website may get you a 1+1 combo or discounted tickets at select theatres every month.
“Consumers who spend a significant amount on fuel every month should get a fuel credit card, which is offered by many banks. Similarly, frequent travellers should choose a travel credit card to earn free air miles, lounge access, hotel vouchers etc,” said Arora.
High-end credit card providers will go out of your way to indulge your hobbies. Many cards now provide access to golf courses either in a limited or unlimited form, along with lessons. Sailing lessons and access to select racing and football clubs could be part of the deal with your card. Not just that, premium credit cards also provide you with gift vouchers to luxury brands. These benefits will repay any annual charges you may be paying on the card.
Chandani said that High-end credit cards provide you concierge services as well. These can be useful in a variety situation. You may use these services to make your bookings, be it for air tickets, hotel room reservations, restaurants, or movies. “The concierge may even arrange medical assistance and emergency auto breakdown assistance by helping tow the car to the nearest workshop,” he said.
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