Benefits of owning a credit card and how to maximize its potential

Get Kotak League Platinum Credit Card & earn 8X reward Points on your every spends of Rs.150 across all categories.
Know More
Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
By clicking on the hyper-link, you will be leaving www.kotak.com and entering website operated by other parties. Kotak Mahindra Bank does not control or endorse such websites, and bears no responsibility for them.
At your request, you are being re-directed to a third party site - https://www.billdesk.com/pgmerc/kotakcard/ wherein you can make your payment from a different bank account. Kotak Cards does not guarantee or warrant the accuracy or completeness of the information, materials, services or the reliability of any service, advice, opinion statement or other information displayed or distributed on the third party site. You shall access this site solely for purposes of payment of your bills and you understand and acknowledge that availing of any services offered on the site or any reliance on any opinion, advice, statement, memorandum, or information available on the site shall be at your sole risk. Kotak Cards and its affiliates, subsidiaries, employees, officers, directors and agents, expressly disclaim any liability for any deficiency in the services offered by BilIDesk whose site you are about to access. Neither Kotak Cards nor any of its affiliates nor their directors, officers and employees will be liable to or have any responsibility of any kind for any loss that you incur in the event of any deficiency in the services of BiIIDesk to whom the site belongs, failure or disruption of the site of BilIDesk, or resulting from the act or omission of any other party involved in making this site or the data contained therein available to you, or from any other cause relating to your access to, inability to access, or use of the site or these materials.
Note: Available in select banks only. Kotak Cards reserves the right to add/delete banks without prior notice. © Kotak Mahindra Bank. All rights reserved
By clicking on the hyper-link, you will be leaving www.kotak.com and entering website operated by other parties. Kotak Mahindra Bank does not control or endorse such websites, and bears no responsibility for them.
By clicking on the hyper-link, you will be leaving www.kotak.com and entering website operated by other parties. Kotak Mahindra Bank does not control or endorse such websites, and bears no responsibility for them.
By clicking on the hyper-link, you will be leaving www.kotak.com and entering website operated by other parties. Kotak Mahindra Bank does not control or endorse such websites, and bears no responsibility for them.
By clicking on the hyper-link, you will be leaving www.kotak.com and entering website operated by other parties. Kotak Mahindra Bank does not control or endorse such websites, and bears no responsibility for them.
03 JANUARY, 2022
A credit card is largely used as a payment method in India. It is a fairly common phenomenon for most salaried and self-employed individuals to keep one or multiple credit cards for their everyday and special financing needs.
By each year, there is a sharp increase in the number of credit cards issued in India that reinstates the significance and ease of using it. If used sensibly, a credit card comes in handy in multiple situations of life where we find ourselves strapped on instant funds.
Sadly, many of us don’t know how to use a credit card optimally and end up landing in a pile of debt without even realizing it. So, what exactly makes credit card a valuable and profitable proposition, and how to maximize the potential of your best credit card in a coherent manner? Here are some benefits of owning a credit card that helps us build strong financial health over the years:
Credit Card Benefits
1. Credit Card is Comfortable to Carry & Use
It goes without mentioning that carrying cash is a cumbersome task. Every time you step out, you need to ensure you’ve adequate cash, and if not, you need to run to an ATM. You’re always conscious of your wallet and fear your money getting stolen. However, on the other hand, carrying a credit card is a convenient proposition. Being the digital boom, there are hardly any merchants where cards aren’t accepted. All you need is to slip in your credit card while leaving, and you’re sorted.
While making payments offline, you need to swipe the card, and you’re done. Unlike carrying cash, this is super convenient, where you need to ensure you have the necessary change to fund that purchase.
Using your best credit card, you don’t need to worry about buying any big-ticket item as you can repay it conveniently over a few installments.
2. Credit Card is Safe
Credit cards are a far safer proposition than cash. For instance, if your credit card gets stolen, you can immediately contact your bank and get it blocked instantly to avoid having any fraudulent activity on your credit card. Also, if you become a victim of identity theft, you can request your bank to reverse all the wrong purchases done on your credit card through purchase protection. Most banks offering credit cards also offer the purchase protection program to their borrowers to get the maximum bang for their buck in theft and fraud cases. Whereas, in cases of cash, you simply can’t undo anything. If your cash is stolen or if you lose it, there are highly unlikely chances of you getting it back ever.
3. Help You Earn Rewards & Deals
Over 90% of credit card borrowers in India use a credit card for shopping. If you’re unsure how to use a credit card for optimizing maximum rewards and offers, make sure you end up applying for a credit card that offers maximum deals at most retail stores, both offline and online. For every penny spent on your credit card, you’re entitled to reward points that you can redeem later for exciting deals and gifts. This is an excellent way of being rewarded while you shop.
4. Helps You Build Credit Score
If used responsibly and smartly, a credit card proves to be an efficient tool to build your credit score. Your credit score is a 3-digit number ranging between 300-900 that explains your creditworthiness to the lender. When you’ve a high credit score, above 750, it indicates you’re a responsible borrower. This is crucial to get you a personal loan or credit card approval when you apply for them in the future. It is computed by the credit bureaus in India based on:
Adopting the above sensible financial habits go a long way in improving and maintaining your credit score and help you appear to be a credible borrower to the lenders. A good credit score ensures a hassle-free and quick loan approval in the future at lower interest rates and other favourable terms.
How to Maximize Your Credit Card’s Optimal Potential?
While each credit card offers multiple benefits, it is up to the individual on how to use the credit card for optimal use. Using a credit card smartly helps you save money on each use and maximize its true potential:
While the market is filled with lenders offering the best credit cards, make sure you select the credit card and the bank wisely before applying for one. Choose the one that offers a host of options closely matching your needs.
You have already rated this article
OK