Credit cards are generally seen as the enemy of personal finance and most of the people who think themselves to be financially aware, keep a distance from credit cards. But the fact goes unnoticed by those people that credit cards spoil personal finance only when they are used in a wrong way. If you use credit cards mindfully, it can help the user in different ways along with saving money.

Yes! It may be hard to believe for many of us, but while using a credit card in right the way, it helps you to enhance your personal finance.  

‘Credit cards are made to purchase now and pay later‘. This is the prime benefit which we get by using a credit card. The word ‘ later’ in credit card benefits holds the secret of turning your credit card form devastating one to enhancing one. A credit card allows you to pay the credited amount from the next day of credit for as long as you want to carry the burden. But the thing to be noted that, when you delay payment of credit card it keeps on increasing by leaps and bounds by adding a higher percentage of interest and finally you will end up in paying a high amount or in extreme cases being debt trapped.

All you need to Know about Easy Loans with Credit Card

Being afraid of those situations, most of us avoid using credit cards.  But today we will show you another face of a credit card which helps you to save money. Here is how your credit card helps you.

Special Deals Exclusively For Credit Card Holders

The e-commerce portals have made the use of credit cards more appealing as they often provide special offers for credit card purchases.  Most of the e-commerce portals have a tie-up with some credit card companies and they provide special pricing with added discounts, interest-free EMI and other such offers if you are holding on to a credit card of certain enlisted issuers. Whenever you are about to have some shopping on an e-commerce portal, you can check if there is any special discount for your credit card.

Cashback

Most of the credit card issuer keep this cash back facility with their credit cards. Some of the credit card providers provide cash back on every expenditure whereas some others provide cash back at enlisted partners such as super-stores, fine-dine options, and e-retailers. But many credit card issuers have lengthy terms and conditions which you need to satisfy. Sometimes even the credit card company asks for a minimum transaction to become eligible for the cash back.

Reward Point

Reward points have become the main attraction of using a credit card. If you use a credit card during the month and pay the whole credited amount in the following month, you can not only be safe from interest payment, you can also earn reward points too at no cost. Some credit card providers offer reward points or sometimes travel statement credits worth a percentage of your total usage of credit card. some credit cards even provide as high as 2 percent of the total usage which can be a really high amount if you have made big purchases.

Co-Branded Credit Cards

You can be benefited by a using credit card if you use a co-branded credit card of the merchant from whom you avail services frequently. Whatever service you may avail frequently such as air travel, hotels, shopping malls, petrol pump and so on, you can use the co-branded credit card for a better deal on those purchases. Some or other credit cards must be tied-up with those service providers and using those credit cards will fetch reward points to the user.

How Often You Should Use Your Credit Card

Credit Score Building

 A disciplined user of a credit card boosts his/her credit score. Credit cards are nothing but a pre-approved loan only. So when you repay the loan within a months time, you will be free from paying interest as well as it will increase your credit score. Every time you swipe your credit card or repay, it gets recorded by the credit bureaus and hence reflects in your credit history. So a credit card can even be used as a tool to enhance the credit score of an individual. A high credit score above 750 is a must for any kind of loan approval. If your credit score is less than that and you want a big-ticket loan like a home loan or business loan then it becomes difficult to get the loan approval. In such scenarios, one can use a credit card at pay it before the due date which will help to reconstruct the credit score. A good credit score attracts lenders and you can even negotiate for a good deal in future.

Keeping Track

 Using any kind of card may it be a credit card or debit card is a very good way to keep a track of expenses. An untracked expense is the root of almost all financial crises. The mobile apps of the banks allow the customer to get the expenditure statement whenever they want. So they can easily find it out where the money has gone instead of wondering.  Not only that, you can even get the date, amount, the merchant’s name etc in the statement.

Credit cards are very helpful as long as you use it mindfully. The day when you start using it for your wants, it starts weaving the trap to hold you tight. No one can deny the fact that, there are many who have got into the debt trap of credit card and the consequences which they had to face was really measurable. So be wise in using a credit card and make it help you to strengthen your personal finance.