4 Reasons Why Credit Cards Are Important For Your Financial Health

Team SahiBnk

08 September, 2023

Get a credit card? A financial trap. Ask your parents or grandparents and you will get to hear this. 10-15 years back people used to think of credit card as one of the inescapable traps that eats up your savings and push you towards overspending. The card that almost 73% of Americans hold ownership of before turning 25, was considered as a dark shadow in India. Many people consider it a debt trap that severely impacts your credit score and financial stability. However, with time, the most populous country is also becoming one of the biggest credit card users, and the honor for this goes to the banks and financial institutes. From using the card for daily utility bills to big electronic and furniture items India made about 42.86 million transactions by June 1st, 2023.

Benefits Of Owning A Credit Card

People are slowly considering that this small rectangular plastic or metal card must get space in everyone’s wallet. There are several reasons that prove the fact that a credit card is much more than just instant financial access. The universally accepted card gives you the ease of digital payment while rewarding you with cashback, reward points, and complimentary services like movie tickets, event invites, and even personal insurance for its frequent usage.

Moreover, when you use your card sensibly and cautiously, you enjoy a host of benefits and an improved credit score. The credit card, which acts as a very fragile part of financial planning, plays a robust role in maintaining good financial health.

  1. Build A Higher Credit Score

    Your credit score is unquestionably an important part of your core financial health. But when it comes to building a reliable score from scratch, credit card can help everyone work on it from their early 20s or even late teens. You can easily get a credit card from your salaried account’s bank or get a secured card and use it wisely. Every time you use your card and pay your card’s bill on time, you take your score higher.

  2. Emergency Fund Transfer

    Your EMI or other bills’ due date is round the clock and your paycheck got delayed this month. During these times, there is no better rescuer than your credit card. For every emergency fund extension needed or an unforeseen situation that shows up, you can easily pay your bills with your credit card. You don’t need to run around asking for help or exhausting your savings, just get the fund from your credit card and repay the card’s bills on time.

  3. Shopping Is Rewarding

    From utility bills to heavy electronics and automobiles, there are many products available on credit card EMIs. There may have been various moments when you have read expensive products are available on EMIs on credit cards at 0% interest rates. And sometimes getting a dress or home essential is the need of the hour, but alas! Bank account says, no funds! No worries, your credit card , your best financial support has your back, you get instant funds along with various reward points or cashback for your loyalty.

  4. Secure Payment Automation
  5. You are all set to Netflix and chill with popcorn ready, lights off, TV on, and ouch! the power cut, bill not paid. For all these utility payments along with the subscription services, it can be handled with a credit card without giving extra attention. Credit cards have the option to set autopay for various recurring bills with an extra layer of security for online transactions. These cards even offer extra fraud protection with zero liability and purchase protection with EMV chip technology. So, next time let your credit card handle all these due dates and you handle just one, your credit card, bill due date.

Financial planning is a lesson that we learn every day and getting a credit card at an early stage of earning is its first-hand glimpse. While a credit card is a great tool to enhance your financial health, you also need to be cautious when and how you are using your card. Credit cards are a quick path towards overspending so always keep the expenditure limit to 30-35% of the total credit. Moreover, a little ignorance in the bill payment can impact your credit score negatively. Paying only a minimum due every time can land you paying high-interest rates and fix you in between debt accumulation. Thus, your credit card can become a complete financial tool and you can get a pool of benefits if you use it mindfully. So, check out the best credit card and your eligibility with SahiBnk partnered with trusted banks and NBFCs, and take your step towards better financial discipline and planning.

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