The 21st century is widely known as the technological age. We are in the second decade of the century, but the changes and growth in technology are fascinating. It touched almost every other area in the world and brought concrete changes to their development. Technological advancements in the financial industry have made many financial tasks easy and accessible. Although the technology of online banking and transactions was introduced in the 1990s, the 2000s saw the drastic increase in the use of this technology around the world. Likewise, credit cards were introduced in the late 1950s, but their use has increased as the world has seen more technological advancements in the field. People were very skeptical about the use of these cards and they were mainly used for international travel and to buy heavy and expensive goods. But as banks began to offer additional security measures and additional benefits over their use from the start of the 21st century, more and more people are using this type of plastic currency.
Credit cards are now seen as a bargain. Their easy availability and hassle-free use changes its status from luxury to necessity. They can be used online or in person, in any part of the world. They have succeeded in bringing the world together and making it financially accessible. Banks around the world offer different types of credit cards depending on their customers’ needs, financial history, and credit report. Borrowers must provide minimal documentation to get a credit card and these cards are approved as quickly as within a day.
Banks offer loans to its customers to buy or pay for the desired products. It is like borrowing money from a bank to pay for goods and paying it later all at once or in monthly installments ie EMI. Banks charge a minimum interest rate and processing fee on these cards. Some banks also charge a card renewal fee every year. By having a credit card, you can pay for goods and services even if you don’t have enough funds in your bank account at the time of the transaction. You only pay the full bill amount later when you have funds. Paying your card bills on time will dramatically increase your credit score, which will ultimately help you in the future if you decide to take out a larger loan. Timely payment of credit card bills shows your ability to pay off your debts on time and it works as a major confidence factor in borrowing large sums from a bank.
As mentioned earlier, banks offer different types of credit cards depending on the financial profile of the borrower. Banks decide your card’s credit limit by analyzing your financial history, credit report, current financial obligations, employment status, and ability to repay future credit debt. The credit limit is basically a number of amounts that are considered the spending limit. Each card has its amount limit for spending and the borrower is not expected to exceed that amount. The credit limit changes depending on the use of the card. These cards also come with a broad structure of reward points, cash back and cash back, etc. Various e-commerce websites, restaurants, stores, and salons make deals with major banks to offer discounts and reward points to their customers when purchasing goods or services. of them. This helps them to grow their business and their customers by offering them discounts.
All banks that offer credit cards to their customers have developed comprehensive security systems to protect the account information of their card users. This card comes with a special magnetic chip on the back, which protects the secret digital information of the card holder. Moreover, if one uses such a card to purchase goods and services, the money is not deducted from his account quickly. This way, if someone abuses your card, you can tell the bank to block the card and won’t have to pay for the wrong transactions made on the card.
Having a credit card is more than a luxury and a necessity. Although these cards are easy to use, you should always be careful not to overdo them. You should always pay your card bills on time to avoid late fees charged by banks. In addition, you should always maintain your credit utilization ratio. This means that you should not exceed your credit limit on the card. In addition, you must not keep it unused. Not using your donated credit can also prove to be harmful to your credit report. Credit cards can be used to withdraw money from ATMs, just like debit cards. But banks charge transaction fees for ATM withdrawals made on these cards. So, unless it is really necessary, you should avoid withdrawing money from ATMs using these cards. Many people worry that owning a credit card will turn them into shopaholics. But you need to control yourself to avoid spending more than you can repay. You should avoid making unnecessary and unnecessary purchases.
Credit cards come with many benefits such as reward points, cash back offer, and discounts. You must use these benefits properly. Know where you can use these benefits and how they will benefit you. Remember to check your monthly credit card bill. This will help you keep track of your spending. It will also help you with your monthly financial planning.
Source by Amit Kumar