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31 AUGUST, 2021
Having a credit card is a great way to manage your finances during a cash crisis. It allows you to access funds, make purchases, and repay the amount at a later stage. The best part is that credit cards are widely accepted and offer great financial freedom if used judiciously.
If you are new to credit cards, keep on reading to know more about them and their benefits.
What is Credit Card
A credit card is a type of credit facility, provided by banks that allow customers to borrow funds within a pre-approved credit limit. It enables customers to make purchase transactions on goods and services. The credit card limit is determined by the credit card issuer based on factors such as income and credit score, which also decides the credit limit.
The credit card information includes credit card number, cardholder’s name, expiration date, signature, CVC code, etc. The best part about a credit card is that it is not linked to a bank account. So, whenever you swipe your credit card, the amount is deducted from your credit card limit, not your bank account. You can use it to pay for food, clothes, take care of medical expenses, travel expenses, and other lifestyle products and emergency services.
Advantages of Best Credit Card
After knowing what a credit card is, let us find out the benefits that come with it. Depending on your needs, a credit card comes with a host of features and benefits to save money while making transactions. Here are the top benefits to help you to know more about credit cards:
The benefit of having the best credit card is that it has made shopping easier and convenient. You no longer need to visit malls or stores to make purchases. With your credit card, you can make big purchases from the comfort of your home. It can help you avoid putting any burden on your monthly budget with a credit card.
A credit card allows you to buy products and services on low-cost EMIs. Another option that has become popular is the Buy Now, Pay Later, which is ideal for salaried borrowers with fixed monthly incomes.
Credit cards are the best alternative to cash, as it eliminates the need for carrying cash. Credit cards are accepted almost anywhere you go. If you do not have cash, you can simply use your Kotak Mahindra credit card to cover your expenses and repay the outstanding amount at the end of the month. The process of making a transaction is simple. All you have to do is swipe your card at the PoS terminal or enter your card details to make online payments.
The best credit card comes with rewards and cashback that fits your needs and requirements. Depending on your credit card issuer, your credit card comes with a host of special discounts, cashback, or rewards points for purchases made through it. Before getting a credit card, it is imperative to assess your needs. For instance, if you are a frequent traveller, it would be wise to choose a credit card that offers free airport lounge access or have travel insurance. Also, there are credit cards that offer special discounts on shopping, travel tickets, and accommodation.
Another benefit of having the best credit card is that it allows you to withdraw cash whenever the need arises. However, it is worth noting that using your credit card to withdraw cash follows a small fee that you will have to bear while repaying your outstanding amount.
The best thing about a credit card is that it is accepted worldwide, as it is the most common mode of payment across the world. You can use your Kotak Mahindra credit card to make international bookings and payments at airlines, restaurants, hotels, stores, and petrol pumps with ease. It makes your travels around the world convenient. However, using your credit card abroad can cost you high foreign transaction fees and high foreign exchange rates.
If you are wondering what is a credit card, it is a type of loan that offers to cover the cost of emergencies for you and your family. For instance, you can use your credit card to pay your medical bills. It eliminates the worrying of arranging funds for your medical bills. Keep in mind that you will have to make on-time payments to avoid hefty interest charges and higher APR%.
Some people also use credit cards to improve their credit scores. Your credit score is a three-digit number that indicates whether or not you are a creditworthy borrower. It is considered as one of the crucial parameters to determine a borrower’s eligibility. When you repay your credit card bills on time, it leaves a positive impact on your credit score, allowing you to secure loans in the future.
So, apply for a credit card to make your life convenient and manage your finances easily.
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