Credit cards are also known as plastic money and are one of the most convenient ways of making payments, while shopping. Credit cards help you maintain records of all expenses made. Even though overusing a credit card might land you in the money trap, using it wisely has a lot of benefits.

1. The Easy EMI Facility

The main advantage of using credit cards are, it helps you convert high-value purchases into affordable EMIs.  EMIs can be for a tenure of 3 months, 6 months, 9 months and 12 months.

You will be charged a small amount of money for EMI conversions. Most of the banks and credit card companies do have tie-ups with merchants, to offer their customers the EMI facility, on the purchase made through a credit card. But you can't convert gold purchases into EMI's.

2. Helps to improve credit score

You can improve your credit score, by paying your credit card bills on time. Bill payments you make on your credit card, will be reported to credit information companies like CIBIL. Payment of credit card bills are just like repayment of loans. Both have the same effect on your credit score. So, payment of credit card bills on time will improve your credit score and this can help you avail loans easily in the future.

3. Credit card offers you interest-free period

Credit card offers you an interest-free period. The interest-free period is a period between the date of a credit card transaction and the due date of payment. If you make transactions today using your credit card, you get a 50 day grace period to pay the bills, assuming today is the start date of your billing cycle. This helps you to make big purchases. During the interest-free period, you can earn actual interest on the amount, by depositing it in a savings bank account.

4. Credit card offers cash backs and reward points

Attractive reward points and cash backs are offered by credit card companies, to promote the regular use of credit cards. Reward points you get, can be used to purchase goods from partnered stores. For instance, HDFC Bank gives 3 reward points for every Rs 150 spent using your credit card.

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