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Credit Cards and its Better Side

The last two posts would have made you wonder if there are any upsides to have credit cards when it has so many pitfalls – you are not alone. There are many benefits to using credit cards, and here in this post, we look at them in greater detail.

To read the previous posts

Credit cards come with a host of attractive benefits apart from the credit aspect. It ranges from cashback to utilizing EMI options; or insurance to protection from fraud etc.

Interest-free period

The interest-free period is perhaps THE benefit of using a credit card, provided you pay the bills on time. It gives you a breather and helps you to manage payments over a specific period.


Arguably the best service that one can avail by way of a credit card is the chargeback. You have purchased a product using a credit card only to realize that there was fraudulent activity, disputes or denial of services. When you file a complaint within 45 – 120 days of the transaction, your credit card company steps to take care of grievance redressal.


A credit card can come in handy to take care of a sudden payment – hospitalization, buying air tickets etc. It helps you in crucial times because your cash on hand remains with you.


Banks offer insurance options when you avail of your credit card (often for premium versions). These insurance options included accident, lost baggage/passport, purchase protection etc., or credit waived off if the cardholder dies.

EMIs – easy monthly installments

Some banks allow you to opt for Easy Monthly Instalments (EMI) on either a purchase or your existing balance. These EMI interests are lower than credit card interest rate, and on some transaction, they could give you a loan on 0% interest. (Be mindful of processing fee)

Credit Score

Credit cards help you in boosting your credit score. It enhances your profile when you are applying for a loan.

Forex transactions

Credit cards prove to be beneficial while travelling abroad. It reduces the need to carry cash, especially for shorter trips, layover at transit airports etc. Every transaction earns reward points. However, one must be mindful of the commission involved during conversion.

Reward Points

Reward points are also cashback. For every spend that you make using the credit card, you earn reward points. You can earn one reward point for every ₹100 you spend. As you start using premium versions of the credit card, the frequency of the reward points is more, perhaps one reward point for every ₹50 that you spend.

Once accumulated, you can use the reward points to make purchases.

Reward points are redeemed by way of

  1. air miles – which makes air tickets cheaper or

  2. petrol cards – helpful in filling gas at bunks instead of paying cash

  3. discount vouchers to shop at malls.

Lounge access, Discounts etc

Some credit card gives you access to lounges in airports (domestic or international) for an x number of times a year.

In other cases, credit cards can get you direct discounts on stores and restaurants, billed at the point of sale. Often these discounts are not automatically processed – you will have to indicate before billing to avail them. These discounts also come in the form of fuel surcharges waivers.

So now that you know the good, the bad and the ugly side of the credit card – you are on your way to making your informed choices on how you would like to use them.

Have some thoughts? I would love to hear from you

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