Consider owning a credit card as a status/ badge that gives you pride.
If a financial institution is happy to grant you a credit card, this means that they feel they can trust a portion of their creditors’ money with you. You are deemed to be trustworthy and creditworthy! Get your money working for you generating cashflows, while you use the financial institution’s money for all your additional needs. However, this is a tool to be used with discipline and responsibility. Why? Simply because you are using someone else’s money! Enjoy the perks but know and honor the rules of the game. Good credit /credit worthiness is key to financial freedom.
You’re not using your own money
When you own a credit card you are given a card by the bank, which is attached to the payment processing service provider, mainly Master or Visa. This card will have your name and numbers that are specific to you on the front and back. First, the bank does an assessment of your income and expenses, and then decides on the credit facility normally allowed by their credit evaluation team. This grants you access to utilize that portion of funds. This is technically not your money, which means that you are creating credit under your name. The more you honor the due payments without default the more you will be granted a positive credit score (applicable in most western countries and commonly known as the ‘credit score’).
The best offers in town belong to the credit card
Want to go on a holiday, shopping or even dine out? Guess which card gets the best offers? I hope you guessed it right- it’s your credit card. Believe it or not credit cards give you the best deals and discounts because banks want you to create more credit. Hence, in return they do promotions for vendors. This is a win-win situation for all credit card users, banks and vendors, and is one of the major key features which attracts people to use their credit card.
You pay later
Most credit cards give you a time period of approximately between fourteen to twenty one days to pay your utilized portion of the credit amount. During this time they charge “no interest” on your purchases. Even if you have utilized the full amount of the card the bank mentions a minimum amount that is the capital and interest amount that you have to pay. As long as this commitment is met, you have fulfilled your debt obligation. In addition, you get a detailed statement which summarizes all your transactions made via the card and you can also activate an alert SMS request when a transaction is performed.
Protection from Fraud
Normally credit service providers like Master and Visa are extremely vigilant about security and invest in mechanisms such as encrypted technology to ensure the safety of your credit. Banks also keep a keen eye on monitoring any suspicious transactional activity. For instance, let’s say your credit card had been utilized for Rs 1,000,000/- without your consent. You can simply inform the bank, raise a dispute and they will immediately take the necessary steps to investigate the claim made by you. How convenient is that! Remember, it’s not your money; it’s the bank’s creditors’ funds, so they have a major responsibility in ensuring its safety.
One accessory to carry when you travel
Just pack your credit card and passport: that’s all . Given that you have a substantial unused credit limit, the world is your oyster! From wanting to get currency such as Euros, Yen, and Dollars to Yuan, you’re one transaction away from extracting local currency from an ATM that accommodates your type of credit card (subject to the credit card service provider as mentioned earlier- Master or Visa). This transaction will be subject to interest and service fees, but the key point here is the convenience of use. Furthermore, in an emergency you might be eligible for a credit enhancement subject to approval from the bank’s Credit Department.
So go on- get that credit card! What are you waiting for?