In the previous post, we had explained in detail what is a credit card and how it works. Along with this, it was also told that what are the charges to be paid to the user in the credit card. If you have not read that post yet, then you can read that post in the news section. Only after reading that post, you will be able to understand whether there is an advantage or disadvantage in making a credit card. First let's talk about the benefits of credit cards.

Credit card benefits

Credit Limit - In a credit card, the user gets a credit limit, which he can use in shopping & emergency situations. No interest or extra charge is to be paid on the credit limit for 45- 50 days. If we talk about the defense person whose salary is 40000 rupees, he easily gets the credit limit up to 60K - 70K. If the credit score is good then this limit can be more than Rs 1 lakh. As the user uses the credit card over a period of time and pays the credit card bill on time, then this limit also increases. The biggest advantage of credit cards is that the user gets a good amount free of interest, which he can use according to his need.Complimentary Insurance Cover - Credit card companies provide credit card holders with facilities such as personal accident insurance cover, travel insurance and purchase protection. Credit cards offer personal accident insurance cover from Rs 2 lakh to Rs 20 lakh. Facility like insurance cover is not available in all credit cards. Therefore, while applying for a credit card, make sure to find out whether this facility is available in that credit card or not. Many credit card users are not aware of the facility like insurance cover.Discount - Credit card becomes more beneficial for the defense person because he can easily avail discount on flight tickets, online shopping and other online services by using the credit card. 5% to 15% discount is available on payment by credit card. This discount is extra than other offers. Because the defense person travels in flight frequently in a year, discount can be availed by using credit card while booking flight tickets. For example, if the defense person books a flight ticket 3 times in a year, the cost of which is around Rs 15000. If he gets 10% discount on the credit card then he can save Rs.1500. Similarly, some cards offer cashback, reward points and discounts on petrol and diesel. For example, there is a 4.25% ValueBack on BPCL SBI Credit Card, which translates to Rs.95.75 on oil of Rs.100. Apart from this, online shopping companies and restaurants also offer discounts on credit cards.Reward Points - Whenever a credit card user makes a credit card payment, he gets some reward points. The reward points can be used for online shopping or product purchases from partner stores. The system of reward points is also different in each credit card and the value of reward points of each bank is also different. If you do a lot of online shopping then these reward points can be very beneficial. For example, the value of one reward point of SBI Bank is 25 paise. If there are 10000 reward points in your credit card in a year, then their value will be equal to 2500 rupees.

1. Credit Score - Whenever a user uses a credit card and makes payments on time, his credit score improves. With a good credit score, loans are easily available and at a low interest rate.
2. Travel Facility - Premium credit cards offer complimentary lounge access and priority check-in at airports and railway stations. That is, you do not have to wait in line at the time of check-in at the airport and you get the facility of relaxing in the lounge while waiting for the flight. These types of credit cards have higher annual maintenance fees and are best for those who travel on flights most of the time.
3. Track Expenses - Track your expenses easily when you make all payments using your credit card. In the credit card statement, you can check how much money you have spent in a month and where you have spent it.

Credit card disadvantages

1. The biggest disadvantage of credit cards is the high interest rates. If the user has not paid the bill by the due date, then the user has to pay 2.5% - 4% monthly interest which varies from bank to bank. If the user pays the credit card bill on the due date, which is approximately 20 days after the bill statement, then no interest is charged.
2. Just as credit cards improve credit score, in the same way, if the credit card payment is not made on time, then the CIBIL score can also get bad.
3. Apart from this, there are some fees in the credit card like joining fee, annual fee, late payment charges etc. which we mentioned in the last post. These charges are not compulsory, if the user uses the credit card correctly, then he does not need to pay any charges.

Credit cards have both advantages and disadvantages. If you really understand whether you need a credit card or not and how to use it, then you are not going to suffer any loss. If you don't need a credit card and you don't even know how to use a credit card properly, there are high chances that you could be at a loss. Now let's talk about who should take a credit card.

Who should get a credit card?

• Defense people traveling in flight can save a lot of money through discounts using a credit card. Because most travel apps give discounts to credit card users. Apart from this, reward points are also available.
• Defense people shopping online can also save a lot of money through discounts and reward points using a credit card. Even if you dine in a restaurant 2-3 times a month, a credit card can be of great benefit.
• Defense Persons using four wheeler can also save 3% to 4% using HPCL or BPCL credit card.
• The defense person whose credit score is neutral i.e. who has not taken any loan or credit card till date. By improving the credit score with a credit card, such a person can take a loan easily and at a low interest rate in the future.
• Credit cards are best for the defense person who makes most of the bill payments online through debit cards or UPI. Because neither discount nor reward points are available with UPI and debit card payments. He can avail the benefits by using the credit card.

If a person's monthly expenses are not being met in the salary and he wants to meet the expenses using credit card, then such person should not take credit card at all. Because he will not be able to pay the credit card bill on time and he will have to pay interest and penalty.

Credit card benefits can be availed only when you select the right credit card for you. Because each credit card has its own characteristics. Some credit cards are best for travelling, some credit cards for shopping, some credit cards for dining and some credit cards that offer little or all of the benefits. If you select and use the right credit card, you can easily save money in your expense every year and also improve your credit score.

If you are still in doubt about which credit card you should take, then you can take the help of Fouji Adda. The Fouji Adda team will help you select such cards as per your need without paying any fees and you can get maximum discount. Very soon after that our team will contact you and help you to select the best credit card for defense person.

These were the advantages and disadvantages of credit cards. If you choose the right credit card which suits your needs and you use the credit card responsibly, then it can be very beneficial for you. On the contrary, selecting the wrong credit card and using it in the wrong way can be harmful.

If you like the information, then definitely share it with other defense person.