Credit cards have emerged as essential tools that allow you more flexibility to spend and plan your finances better. They offer many benefits, including offers and discounts on various online shopping sites and offline outlets. What’s even better is that you can use a free credit card to limit the associated fees and charges. Here are certain things you may be missing out on in the absence of a credit card:
- Shopping of Big-Ticket Items
Holding a lifetime free credit card expands your purchasing power and allows you to shop for high priced items which you would not have been able to afford otherwise. Credit cards often come with attractive deals and offers that allow users to buy costly items in instalments that are deducted automatically from the user’s monthly credit limit.
If you do not hold credit cards with no annual fee you are probably making all your bill payments or shopping by paying cash. You are missing out on the convenience and security offered by credit cards which just need to be swiped. The absence of a credit card also restricts your ability to carry out online transactions and you have to rely on other modes or use the cash on delivery options.
- Keeping Track of Your Expenses
Credit card charges or interest becomes applicable when you fail to repay the due amount on time. The bank issues a credit card statement every month providing details of all the expenses paid by you via the card and the due date for paying the amount used. This allows you to keep track of all your expenses, analyse them and plan for the future.
- Building a Good Credit Score
Credit cards allow users to build a good credit score which helps enhance the eligibility for future loans. Lenders check your credit score to know your creditworthiness before processing your loan application. A higher score ensures that you get loans at lower interest rates. And using a credit card in a disciplined manner which means paying the due amount on time helps you build a good credit score.
- Attractive Offers and Discounts
Regular use of credit cards allows users to earn reward points which can be later exchanged for cash backs or attractive offers and discounts on shopping at specific outlets. You can even use these reward points to book your airline tickets or do hotel bookings at discounted rates. But when you are not using a credit card you are missing a chance to avail of such offers and reward points.
Credit cards offer several advantages and using them responsibly can add to the benefits. For instance, paying off the overdue amount on or before the due date can ensure that you enjoy a free credit card. Keep track of your statements and check them carefully, to get an idea of your main expenses and to ensure there are no errors.