A credit card is a financial product that people can use for everyday purchases. This includes groceries, gas, clothes, and other services or goods. The card is also a great resource for buying travel packages, electronic gadgets, and jewellery items. It means people can purchase the items even if the funds aren’t immediately available to them. Beyond these conveniences, the benefits include the opportunity to build a great credit score, protection against fraudulent activity, earn exciting rewards, zero foreign transaction fees, etc. Speaking of credit cards, there are different types of cards available. After all, every bank offers multiple credit card options to their customers.
One of the popular and most demanded credit cards are the SBI credit cards. After all, the bank is one of the oldest and largest commercial banks in entire Asia. SBI offers multiple credit card options such as simply click SBI credit card, STYLEUP contactless card, SimplySAVE card, SBI Elite card, AIR India signature card, yatra card, IRCTC SBI platinum card, Mumbai metro card, etc. Each of these cards has its own perks. However, it’s important to use a credit card responsibly. For that, one needs to know what exactly a credit card is. So, let’s take a look at the following,
What Is A Credit Card?
Credit cards are a financial product that act as a loan. The person needs to pay it back at an annual percentage rate. The rate is applied as per the terms of the credit card agreement. Depending upon the eligibility and credit score of an individual, people can grab the best offers and interest rates on their credit cards. For that, one needs to maintain a decent credit score. People with a decent credit history will have to pay lower interest rates than people with no credit history. However, this also depends on the type of credit card. In the case with the SBI credit cards online, the person will have to pay a minimum APR, plus he can enjoy the rewards and cash backs.
However, a lot of people are often confused when it comes to choosing between a debit card and a credit card. Well, a debit card is directly linked to the bank account of the person. There will be no interest charges or monthly bills, unlike credit cards. However, credit cards help one to make purchases even when the funds are not at their disposal. Later they can pay the loan back along with the APR rate. However, it’s important to use a credit card responsibly to yield its benefits. Apart from that, there are numerous reasons behind using a credit card. Let’s take a look at the following,
Grab One-Time Bonuses
Some banks like SBI offer a sign-on or one-time bonus to their customers as a welcome gift. Often, the applicants with a decent credit score get approved for the best credit cards that offer huge houses. This will cover the initial joining fees as well. Some of the banks offer a reward point as a bonus for signing with the bank. These rewards can be redeemed later for purchasing other merchandise.
Get Instant Cash backs
One of the best parts of using a credit card is that it offers instant cash back on certain spending, for instance, SBI credit cards offer cash back of up to 5% on online shopping and up to 5% cash back on paying utility bills. This is an ideal way to save money even while purchasing. These offers are available only on credit cards, not on other cards. Depending upon the credit score and other eligibility factors, one can fetch the innumerable benefits of a credit card.
Get Universal Acceptance
The hardest part of visiting a foreign country is dealing with the currency exchange centres. People have to spend their precious time exchanging their currency upon visiting a foreign country. However, with certain credit cards, a person will be eligible for universal payment without visiting the ATM or currency exchange centre.
Get Exciting Rewards
Credit cards offer certain reward points upon every spending. Many of these cards offer bonus points for certain categories such as gasoline, groceries, or restaurants. Later these points can be redeemed for gift cards, merchandise items, travel, etc.
Get Instant Loan
A credit card acts as a loan to a customer. There’s a certain credit limit which is the maximum amount that can be used and this depends on a variety of factors. This includes the credit history of the person, annual income, the current credit score, etc. However, these cards can be a great source of funds in times of emergencies. In fact, there are options to convert the bill to EMI if the person isn’t able to pay the bill back immediately. These are the reasons one must use a credit card to structure their finances.
