The use of credit cards has become common today. People see it as a convenient and beneficial financial product. Through this you can buy essential things, that too without paying money immediately.
That is, if you want something and you do not have money, then through this you can buy that thing immediately and the money spent The amount can be easily replenished later. However, it is important to use credit card properly, because it has both advantages and disadvantages. Let us know how to use credit card properly and what are its benefits and possible disadvantages.
Pay bills on time
Credit To use the card properly, you should keep some things in mind. Like paying bills on time. It is very important to pay the credit card bill on time every month. If you pay your bill late, you may have to pay interest and fine for this mistake. On the other hand, if you pay the credit card bill on time, it keeps your credit score good.
Always keep in mind the credit limit
of the card. Exceeding the credit limit can be harmful for you. One should always spend within one’s limit. It also helps in maintaining your financial stability and also protects you from unnecessary interest.
These are the benefits of credit card
The biggest advantage of a credit card is that it comes in handy in every emergency. If you do not have money and suddenly some important expense arises, then you can make the payment using credit card. Apart from this, proper use of credit card also improves the credit score.
Benefits of rewards and cashback
Many credit card companies provide reward points to their customers. Provides facilities like cashback and discounts. For example, if you do online shopping, you get extra discount by using some credit cards. Apart from this, some credit cards also give cashback on petrol pump and restaurant bills.
Interest free payment facility
Many credit card companies provide cashback to their customers. Provides the facility of interest free payment for some period of time. This period can be from 20 to 50 days. If you make payment during this period, you do not have to pay any interest on the amount spent.
Facility of EMI option
Apart from the benefits mentioned above. Some credit card companies also provide EMI option to their customers. That is, if you ever spend a huge amount from your credit card, then credit card companies give you the facility to pay this amount in installments. However, this facility comes with interest rates.
Now understand the disadvantages of credit cards
Too high interest p>
If you do not pay your credit card bill in full on time, you may be charged hefty interest rates. The interest rates on credit cards of many companies are more than 20 percent. These interest rates can worsen your financial condition.
Encouraging unnecessary expenses
If you have a credit card, you often end up making unnecessary expenses. Actually, when we do not have money, we avoid unnecessary expenses. But, when we have a credit card, we use it inappropriately. Doing this directly affects our savings.
Credit score also gets damaged
If you do not pay the credit card bill on time. If you do, it has a negative impact on your credit score. If your credit score gets damaged, it can affect the loans you can take in the future.
Various charges
Various credit There are cards in which different types of charges have to be paid. Like- annual charge, late payment charge and some hidden charges. If you do not pay attention to these, you may have to face additional expenses.
Risk of fraud
If your credit card is in the wrong hands. If it goes away, you may suffer huge financial loss. Additionally, the risk of fraud and cyber crime remains when using credit cards while shopping online.
