Millions of people in India use credit cards as a quick and convenient mode to finance their expenses on credit. These cards offer a form of instant credit to the user who is not required to use his/her available funds to make purchases or transactions. However, availing a credit card without going through the terms and conditions will have dire consequences on your financial condition. You must weigh the pros and cons of having a credit card before you apply for it.

Therefore, without further ado, here is a look at the advantages of availing and using a credit card.

Credit card advantages

1.Purchase products through EMI

Having a credit card allows you to avail the crucial advantage of converting purchases into EMIs. For instance, if you buy a laptop worth Rs. 1 Lakh using a credit card, you can pay the entire sum at once or choose to convert the total into EMIs as per a tenor of your choice. This feature allows you to reduce financial burden.

2. Forming a line of credit

Another one of the credit card benefits is that it allows you to build a credit history and score. As you know, the credit rating is a vital factor to avail loans and finances from credit companies. A card allows you to easily modify and improve your overall credit score. You simply need to use the card and pay the bills on time.

3. Interest-free period

Credit cards come with a pre-determined grace period. During this period, the card issuer will not charge any interest on the credit if the user repays the maximum outstanding amount within the same. For instance, the Bajaj Finserv RBL Bank SuperCard offers 50 interest-free days to use the card without having to make additional payments. Check with your credit card provider regarding the interest-free tenor, as they are liable to vary from one company to another.

4. Attractive rewards

One of the major factors to consider when discussing the pros and cons of having a credit card is the availability of reward points on these cards. The points are a form of incentive program from financing companies. You tend to earn more points when you use the credit card more frequently. You can then redeem these points to avail discounts and other offers.

Now that you know the credit card benefits, here are some disadvantages of using such a card.

Credit card disadvantages

There is no downside to using a credit card if you know what to do and what to avoid. Here are some problems you can face with credit cards if you fail to follow the proper procedure to use them.

1.Possibility of damaging credit score

Just as using a credit card in a proper manner can help build your credit rating, using such a card improperly can damage your CIBIL score. Late bill payments and high utilisation of credit limit can have a poor impact on your scores. You should find out everything there is to know about credit card bill payments before availing a card. Moreover, make sure you do not apply for multiple cards at once as this too can hamper your creditworthiness.

2. Hidden costs

While many credit card users feel that they need to pay hidden costs after availing a card, this is rarely the case. In fact, the financing companies detail every aspect of cards and payments as part of its terms and conditions. Read these terms carefully to understand the fees and payments linked to your card to avoid unexpected costs related to it.

Bajaj Finserv provides pre-approved offers to make availing loans quicker and simpler. These offers are available on unsecured credits, like personal loans, business loans and credit cards, and secured loans, like home loans. You can check your pre-approved offer by providing your phone number and name.

When talking about the pros and cons of having a credit card, one must understand that using such a card requires planning and foresight. Impulsive spending through credit cards can leave your finances vulnerable. However, if you plan every purchase beforehand, credit card bills will rarely surprise or trouble you.

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