The experts say if you use credit cards more responsibly then you are actually better to pay with credit cards rather than debit cards. But we often use this card irresponsibly and ended up in debt even after warnings of financial experts who always put their efforts and energy to prevent us from using credit cards– with good reasons. Let’s see why some trusty credit cards come on top and what the strategies are:
Rewards and Points
There are credit cards whose reward works on a point system where you earn some fixed points on some fixed amount of money spent. Some companies even offer you three months of special promo periods where spending in some categories like restaurants or transportation. And after spending in these categories, you will earn more points and after reaching a certain point threshold, you can redeem it for or you can directly buy from credit card Company’s “reward catalog”.
Sign Up Bonuses
Sign up bonuses are just like welcome gifts. Some credit card companies offer good reward points that can be redeemable for fun stuff. Whereas debit cards that come with a bank account offer zero balance or fewer rewards.
Cash Back
The cashback credit card was first to come in the US and this was a very simple idea. The customer who use the credit cards, the companies offer them 1% of cashback no matter where you spend and what amount you are spending. But today, this cashback system has been upgraded to 2%, 3% or even more.
Some cards like platinum SBI credit cards offer huge cashback rewards or discounts on various brands.
Grace Period
When you spend with your debit cards then the amount will get debited at that time only. But when you spend with the credit cards then your money will remain in the account until you pay your credit card bills.
Credit cards increase the time value of money; however it is extremely small, it will add to wealth. The postponement in payments makes the purchase cheaper. Always prefer to pay with credit cards because you don’t have to watch your account balance always.
Insurance
Most credit cards come with an abundance of consumer protection that even consumers don’t even realize that they have, such as car insurance, travel insurance, etc.
Universal acceptance
There are times when you will face the problem while paying with the debit cards. When you are paying for the hotel room or rent a car then paying with the credit card then certainly it would be easier.
And even rental car companies and hotels prefer that their customers pay with the credit cards because it would be easier for them while the time of recovery if the customers have done any damage to the car or the room.
Building Credit Score
If you want to increase your credit score then paying with the debit card won’t help you. If you will pay with the credit card then the company will report your payment activity to the credit bureau and thus it will help you in the improvement of your credit score.
Safety
Credit cards provide you the facility of safety from fraudulent. When your debit card used by thieves, you can lose your money instantly. And it will take time to the bank to investigate the matter and refund of your money. But if you will lose your credit card then simply you have to report it to the company and you don’t need to pay for the fraud transaction. The company will take care of it.
Credit cards are the best enjoyed by the customers who are disciplined and who have the ability to pay the bill every month. It’s up to you, whether you use the card or misuse the card.
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