Credit cards are popular form of payments. They offer a variety of benefits to consumers, including:
- Convenience: Credit cards offer a convenient way to make purchases without having to carry cash or checks.
- Rewards programs: Many credit cards offer rewards programs that allow you to earn points, miles, or cash back on your purchases. These rewards can add up over time and can be redeemed for travel, merchandise, statement credits, and more.
- Building credit: Using a credit card responsibly and making on-time payments can help you build a positive credit history, which can make it easier to get approved for loans and credit in the future.
- Fraud protection: Credit cards offer fraud protection that can help you avoid unauthorized charges on your account. If you notice fraudulent activity, you can report it to the credit card issuer and typically not be held liable for the charges.
- Travel benefits: Some credit cards offer travel benefits such as airline miles, hotel points, and travel insurance. These benefits can help you save money and provide additional protections when traveling.
- Purchase protection: Many credit cards offer purchase protection, which can help you get a refund or replacement if an item you purchased is lost, stolen, or damaged.
- Access to credit: Credit cards can provide easy access to credit that may not be available through other means, such as personal loans or lines of credit. You can use the credit card to make purchases within credit limit without going through the approval process.
- Flexible Payments: Credit cards offer flexible payment options which can be personalized for each individual customer. This is similar to Buy Now Pay Later (BNPL) and divides the purchase into multiple equal payments. You get more control over how to pay off balances by dividing into monthly installments best suited for your needs. Paying a lump sum amount for a large purchases like electronics, home renovation, travel, furniture, appliances might not fit into your budget but spreading it over several equal payments might be a feasible option. This feature enhances your ability to handle your expenses.
Credit cards are popular payment method due to the benefits listed above. However, it’s important to note that you are taking a debt when you use credit cards and there are risks involved if credit cards are not used responsibly. You should know the credit card details like interest rate, fees, credit limit and minimum payments required when using credit cards to better manage your debt. It’s important to choose a credit card that meets your needs and to use it responsibly.
