How Can Credit Cards Improve Your Financial Health

Today, about 73% of Americans have a credit card by age 25. The reason is simple: why pay with cash when you can earn rewards, build a credit score, and keep your bank balance intact for emergencies with credit cards?

In India, if you are a credit card holder or want to be one, you might be the first person in your family to do so. So if you are wondering whether you really need to get a credit card or how it can help you financially, this blog is just for you.

Why Bother Getting A Credit Card?

1. You can build a credit score

Most people recognise the importance of having a credit score only when they decide to making a big purchase, whether it be a car or a house. However, if you are in your 20s and have not taken an educational loan or used a credit card before, you will not have a credit score. When you visit the bank for a loan, you will learn that they have lower interest rates for a higher credit score. And by that time, it will be too late for you to get a credit score. One of the easiest ways to build a credit score is by using a credit card. You can get a credit card either through the bank you have a salary account with or by opting for a secured card. With responsible usage, you can build your credit score over time, and become eligible for getting a loan easily and for getting lower interest rates in the future.

2. Make your purchases more affordable

Credit cards come with EMI options in the form of credit card EMI or merchant EMI. In the case of credit card EMIs, you can convert your large spends into affordable EMIs with some interest charges. In the case of merchant EMIs, you can avail of either standard interest charges or no-cost EMIs, depending on the offer being run. This makes high value items like a TV, a fridge, or even a laptop more affordable. Why wait and save up for the entire amount when you can easily pay in parts?

3. Earn rewards for spending

Every time you use your credit card, you can earn points, cashback, or even airline miles. These rewards can be used to save money, get discounts on future purchases, or even treat yourself to a free flight or hotel stay. It’s like getting a little bonus just for spending. You can also get access to exclusive brand offers and discounted gift cards if you use credit cards like OneCard.

4. Convenience and security

Think about the last time you went shopping for something big with cash in your wallet. Wasn’t it a bit nerve-wracking? Credit cards provide a simple and secure way to make purchases. With a swipe or tap, you can pay for things without worrying about the risk of losing cash. Plus, credit cards offer protection against fraud and unauthorised charges so that you can shop with peace of mind.

Also Read: ​​Ways to Protect Your Credit Card Information Online

5. Budgeting and expense tracking

Keeping track of your expenses and budget is an important part of your financial health. Many credit card companies provide monthly statements showing exactly where your money goes. This makes it easier to see which categories you’re spending the most on and where you might be able to cut back.

6. Backup for emergencies

Life is full of unexpected events, like sudden car breakdowns or unexpected medical expenses. But with a credit card as a backup, you can handle these unexpected expenses without feeling overwhelmed. When you don’t have immediate access to cash, having a credit card can be a financial safety net. Remember to use it responsibly and pay it off immediately to avoid high-interest charges.

Conclusion

Credit cards can be a great tool to improve your financial health. All you need to do is be smart about using them by keeping the following things in mind:

Your credit card has the potential to be more than just a payment mode. By leveraging its benefits responsibly, you can unlock a world of financial prudence.