Do you remember the phrase ‘cash is king’? Well, let’s just say that ‘cash was king’. Today, cash has given way to a new king – the credit card.
Yes, most of you are probably reading this and thinking that a credit card has to be the worst sort of king out there, right? You use them every other day and the next thing you know you are in debt.
Sure, that could happen. But only if you don’t use your credit card wisely. When used well, your credit card is actually an incredible tool that promotes financial flexibility. In fact, you can also save when you use your credit card. Especially if you plan to use it to shop.
If you are sceptical about all that has been said so far, read on to discover the benefits you get while shopping with a credit card.
Earn Rewards on All Your Spends
Probably one of the best aspects of using a credit card to shop is the rewards that you earn. Depending on the type of credit card you have, you can earn cashback, reward points, or air miles.
So, how does earning rewards help you save?
Let’s say that you have a cashback credit card which gives you 5% cashback when you shop at department stores. If in a month, you spend Rs.8,500 at department stores, you earn Rs.425 as cashback. This amount can then be used to offset your bill or be used as per the terms and conditions of your card.
What about cards that earn reward points and air miles? How do you save there?
Well, it’s quite the same. If you earn reward points for every Rs.100 or so that you spend, you can redeem these points for products or gift vouchers. This way, all of your spending has helped you receive a free product (and that’s how you save).
Similarly, with air miles. The air miles you earn can be redeemed for free flight tickets. So, all the spending at the grocery store or online could help fund your flight tickets for your next holiday.
Purchase Protection
Probably an underrated and overlooked benefit when it comes to credit cards is purchase protection.
Many credit cards come with free purchase protection coverage for products that you buy using your credit card.
For instance, most HDFC credit cards come with purchase protection for loss of a product due to fire or burglary. So, if you use your HDFC credit card to make a purchase worth Rs.5,000 or more, you get to enjoy purchase protection up to Rs.2 lakh for 180 days from the date of which you make the purchase.
Purchase protection is extremely useful when you shop online. If the product your receive arrives damaged or isn’t what it is supposed to be, having purchase protection coverage will ensure that you do not end up losing money.
Lower Risks Involved if Your Card is Stolen
Using your credit card or your debit card to shop is not without its risks. If you shop offline, your card could get stolen or the details could be stolen. The same could happen if you shop online.
Here’s where your credit card wind though – you are not liable for any unauthorised transactions.
Yes, you aren’t liable for unauthorised transactions made on your debit card either. But since the money is directly debited from your account, getting it back is mostly always a long and arduous process. With credit cards, however, if you find unauthorised transactions on your card, you have to call the bank’s customer service hotline, have your card blocked, and that’s it. You will not be held liable for any fraudulent transactions.
This means you won’t have to pay the amount and hence your money is safe.
Great to Use Overseas
Going on holiday overseas? Well, say goodbye to having to carry cash with you at all times. With a credit card, you can shop overseas without having to worry about converting INR to the local currency of the country you are visiting.
Moreover, if your card is stolen when you are overseas, your card issuer is likely to help you with a replacement card or maybe even provide you with cash in case of an emergency.
If you carry cash, however, and it gets stolen, you are left with little to no money while in a foreign location. And no matter how many times you may have travelled overseas, being in a situation such as this is always a bit unnerving.
Dispute Transactions Easily
Ever been disappointed by a product you purchased online because it looked nothing like the image on the website? Or how about purchasing a product, paying for it, and having it not arrive at all?
These are situations most people may have experienced at some point or the other. In addition to the sorrow you feel because you have received a substandard product (or no product), you have also lost money.
If you made the purchase with a credit card though, you can dispute this transaction.
Credit card issuers want to retain your loyalty. As such, they are known to fight for their customers. So, if you have any disputed transactions, your card company can help you in getting them reversed. Which is why a good rule of thumb is to use a credit card when you make online purchases.
As you can see, a credit card really is the king. They not only help you save each time you spend, but they also come with benefits and privileges that make your entire shopping experience seamless.
If you don’t believe that credit cards are indeed good for shopping, just read this article again and you are sure to change your mind.