Credit cards offer THESE 3 benefits in addition to cashless credit if used responsibly | Mint

If you are applying for a credit card, you should remember that one of the most important features of a credit card is the ability to use cashless credit. However, there are a range of other benefits also which a card offers. These features include cashbacks & rewards, miscellaneous services such as access to lounge and building of credit score.

For instance, if a card offers 3 points for every ₹100 you spend, then you can accumulate 300 points upon spending ₹10,000 by using the card. These rewards points can be redeemed for booking air tickets and hotels. Similarly, cards help you build a credit score over a period of time. But for this, one must ensure to keep credit utilisation ratio (CUR) under check. The ideal ratio of credit utilisation is 30 percent.

Three benefits of credit cards:

I. Cashback and rewards: Several credit cards give points, miles, and cashback on purchases. These rewards can be later redeemed for various purposes such as travel, shopping, or statement credits, thus giving you a discount or added value on shopping.

II. Miscellaneous services: Credit cards also provide added protections which include extended warranties, theft and damage coverage, or return protection on the eligible purchases. Some also offer perks like airport lounge access, travel insurance, or concierge services.

III. Building of credit score: Using a credit card responsibly (such as paying on time and keeping your credit utilisation low) helps build a strong credit history and improve your credit score. This can lead to better loan terms and increased financial trustworthiness.

Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.