5 financial benefits of credit cards

5 financial benefits of credit cards

Usually, credit scores of 750 and above are considered good and those with such scores have a higher likelihood of receiving loans and credit cards.

Many people do not avail of credit cards because of the fear of spending beyond their repayment capacity and ending up in a debt trap. However, for those who can exercise financial discipline and follow good credit habits, credit cards can be a great tool for saving money and managing their finances.

Let’s take a look at 5 ways a credit card can improve your financial health:

Builds the credit score

As credit card transactions are equivalent to loans, credit bureaus also take card transactions into account when calculating your credit score. However, unlike loans, there is no interest cost in using the credit card as long as the entire unpaid bill is paid off in full by the due date. This makes credit cards one of the most cost effective and convenient ways to build your credit score. That said, be sure to avoid depleting more than 30% of your credit limit, as this could negatively impact your credit score.

Usually, credit scores of 750 and above are considered good and those with such scores have a higher likelihood of receiving loans and credit cards.

Some lenders also offer preferential interest rates and fees to those with a higher credit rating.

Save money with various credit card benefits

Credit card issuers attempt to incentivize card transactions in the form of loyalty points, discounts, vouchers, cash back, etc. We can…

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