7 Benefits of a Credit Card Over a Debit Card

The usage of credit cards has spiked in India, with more than 41.04 million such cards in circulation as of 2018 according to the data published by the RBI. The rising popularity of such cards can be accrued to the exclusive credit card benefits, allowing people to save enormous amounts, all whilst increasing their spending capacity.

There are several credit card benefits, such as –

  1. Increases purchasing power

The critical difference between debit and credit cards is the fact that former poses as an upper ceiling on the total spending capacity of an individual, while the latter increases it.

Availing a credit card allows you to spend as much as you desire without any interest charges. However, this is subject to repayment of dues within the time limit set by the concerned financial institution.

  1. Reward points

These points are earned for any transaction processed through a credit card. This is one of the primary credit card benefits making it attractive to users. There are several types of reward points as well, depending upon your card.

  • Welcome rewards can be earned just by signing up for a credit card from any financial institution. In certain situations, bonus points are given if the card is used within 90 days of issuance.
  • Regular reward points are earned every time a transaction of a specific amount is processed.
  • Accelerated reward points can be collected by purchasing items from stores partnered up with the chosen NBFC. It also depends on the type of card availed. For example, a card partnered up with a commercial airline will provide accelerated reward points on the purchase of flight tickets while a retail-oriented card offers additional points in case of high-value shopping transactions incurred.
  • Bonus and loyalty points can also be earned if you fulfill the requisite criteria of the NBFC.
  1. Discounts

The reward points earned through various methods can be redeemed to avail discounts on future transactions or reduced value of the final credit card bill.

  1. Personal loan on the card

Credit cards such as the Bajaj Finserv RBL Bank SuperCard is the option to avail an emergency personal loan against the unutilized credit limit of the card. In case of unforeseen circumstances, you can convert the available credit limit on the card into a 90-day interest-free loan, repayable in 3 installments.

They also provide pre-approved offers that make availing loans quick and easy. Pre-approved offers are available on numerous financial products including credit cards, secured credits like home loans, unsecured credits like business loans and personal loans, etc. You can take a look at your pre-approved offer by providing your name and phone number.

  1. Global acceptance

Another difference between debit and credit cards is that all credit cards are accepted anywhere in the world as an acceptable means of digital transaction. All debit cards, however, are not.

  1. Increase credit score 

You can easily use your credit card to improve your credit score, provided you meet all the outstanding liabilities on time.

Debit cards, on the other hand, have no impact on the credit score of an individual.

Having a high credit score has a key benefit – it allows you to avail a high-value loan of any kind at reasonable interest rates.

  1. Purchase protection

Another major credit card benefit is that it provides insurance against high-value purchases, in case of theft or damaged goods procured. All purchases made via the card is eligible for purchase protection.

These are among the top reasons why credit cards are better than debit cards.

Increasing use of credit cards is a positive contributing factor towards the economic growth of India as well. As credit cards increasing the total purchasing power and thus the overall aggregate demand of the country, the entire production to meet the higher demand rises as well.

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