With the advent of plastic money and digital banking, a credit card has become a common item for people to have in their wallets. But what is a credit card?
A credit card is a type of card that lets you borrow up to a certain limit (the pre-decided credit limit of the card) from the bank for your purchases. This has to be repaid before the due date. You can swipe the card at merchants or use for online transactions. Some credit cards can even be used internationally.
Because credit cards give you credit for a particular time and the freedom to swipe and use in a wide range of transactions, they come with an annual charge. This charge depends on the benefits that come with the card. Typically, credit cards come with their point system which can then be redeemed for free air tickets, discounts in restaurants, in outlets etc.
A credit card is a useful item to have. Applying for a credit card is very simple, and there's a fair bit of competition among different banks which has simplified the process.
Here are 5 reasons to apply for a credit card:
1. It builds your credit score:
One of the strongest reasons to apply for a credit card is that it creates your credit score. The score is the snapshot of your financial history and is frequently referred to by lenders to identify the creditworthiness of a person. Regularly using a credit card ensures the person has some credit history.
2. Emergency funds:
An online credit card is one of the best sources of funds in an emergency. It can be swiped up to the credit limit to provide funds immediately. The best part is that the funds are not payable until the end of the grace period. This makes a credit card a dependable source of cash to have.
3. Points and airline miles:
Depending on the type of card and the bank, each transaction will earn you either points or airline miles. These can be redeemed for benefits in the future in the form of cash back, reward flights, hotel stays etc.
4. Offers and discounts:
With digital banking becoming popular, it is easy to get offers with an online credit card. If you want best suggestions for applying for credit cards online, especially in the case of co-brand cards, which give double the benefits regarding points. However, it is essential to check the yearly fees before applying for a credit card.
5. Grace period:
Credit cards come with a grace period. A transaction done in one month is payable at the end of the next month, thus giving a grace period of almost 60 days. This type of interest-free borrowing can be used beneficially to spend money without paying interest on it.
A credit card is a type of card that lets you borrow up to a certain limit (the pre-decided credit limit of the card) from the bank for your purchases. This has to be repaid before the due date. You can swipe the card at merchants or use for online transactions. Some credit cards can even be used internationally.
Because credit cards give you credit for a particular time and the freedom to swipe and use in a wide range of transactions, they come with an annual charge. This charge depends on the benefits that come with the card. Typically, credit cards come with their point system which can then be redeemed for free air tickets, discounts in restaurants, in outlets etc.
A credit card is a useful item to have. Applying for a credit card is very simple, and there's a fair bit of competition among different banks which has simplified the process.
Here are 5 reasons to apply for a credit card:
1. It builds your credit score:
One of the strongest reasons to apply for a credit card is that it creates your credit score. The score is the snapshot of your financial history and is frequently referred to by lenders to identify the creditworthiness of a person. Regularly using a credit card ensures the person has some credit history.
2. Emergency funds:
An online credit card is one of the best sources of funds in an emergency. It can be swiped up to the credit limit to provide funds immediately. The best part is that the funds are not payable until the end of the grace period. This makes a credit card a dependable source of cash to have.
3. Points and airline miles:
Depending on the type of card and the bank, each transaction will earn you either points or airline miles. These can be redeemed for benefits in the future in the form of cash back, reward flights, hotel stays etc.
4. Offers and discounts:
With digital banking becoming popular, it is easy to get offers with an online credit card. If you want best suggestions for applying for credit cards online, especially in the case of co-brand cards, which give double the benefits regarding points. However, it is essential to check the yearly fees before applying for a credit card.
5. Grace period:
Credit cards come with a grace period. A transaction done in one month is payable at the end of the next month, thus giving a grace period of almost 60 days. This type of interest-free borrowing can be used beneficially to spend money without paying interest on it.
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