There you are at the checkout counter, reaching for your wallet to pull out a card and pay. But wait – which card should you use? Most financial experts will recommend you to use a debit card so that you don’t put yourself into debt.
While that’s a sound piece of financial advice, there are times when using your debit card is not the wisest choice. Let’s look at some reasons why is it better to use a credit card over a debit card.
- They can serve as short-term, 0% interest loans.
When we get our monthly credit card bill, we have to pay what we’ve charged our card during the entire month. As long as we pay our credit card bills on time, we are reaping the benefit of 0% interest loan.
- Points, rewards, air miles and cash back.
Credit card companies offer rewards for using their cards on purchases from gas to groceries and of course big ticket items. Depending on your spending habits, these reward points can add up to free flights, shopping vouchers, hotel stays, goods, many other services. And don’t forget the cash-back bonuses!
- Low or 0% interest EMI’s
Having a credit card helps you buy products like electronics, furniture and other luxuries from stores by paying for them in monthly instalments. They have a low interest rate and sometimes you can even get 0% interest. Your dream of buying a product for which you were unable to pay at once, can come true with the help of a credit card!
- Protecting your purchases.
Most credit card companies will handle disputes for you. If you buy something that turns out to be substandard or broken, you have an additional avenue to claim your money back. . If a merchant won't take back a defective product, check with your credit card company, they will reimburse you.
- They can help build your credit history. (CIBIL SCORE)
One of the best reasons to use your credit card instead of a debit card is the benefit to your credit score. Using your debit card does nothing for your CIBIL score, but responsible use of your credit card can lead to a higher CIBIL score.
And of course, having a good CIBIL score can lead to all types of other benefits like easy loan approval, lower interest loans and better credit card terms in the future.
However, for students it is not easy to get a credit card. You need to give proof of a steady source of income for availing a credit card. Adding to this, they have a list long process of documentation and verification to get yourself approved. This is when the RedCarpet app comes to your rescue! It sells a student card which is pretty much like a credit card, known as the Student Smart Card. This app helps you buy any product from any site and pay back in installments!
All you need is your College ID, address proof and Aadhar Card! No need for any income proof or extensive documentation to be able to get approved for an installment plan or EMI. Here is how it works:
- Tell them what you want to buy from any site by sharing a link or a screenshot on chat
- Submit pics of your college ID on your profile, so that they can verify your identity.
- They will then approve your credit and place the order for the product to be delivered to you
- You pay them back in installments! You can pay in cash or online via net-banking / debit card on the app.
When used cautiously, credit cards can be a consumer’s best friend. Think of all the perks, benefits and rewards a credit card offers, and you’ll probably never use your debit card for purchases again.