Tuesday, November 20, 2018

Why should you use your credit card for online shopping?


As per a 2018 joint study conducted by ASSOCHAM and Resurgent, the number of online shoppers in 2017 was 108 million. Amongst them, the most preferred mode of payment was cash on delivery at 74% followed by debit cards at 18%, and credit cards at 5%.

The share of credit cards is the lowest as the number of cardholders is also considerably low as compared to debit cards. This is because the majority of individuals believe that a credit card requires them to pay high interest rates, thus, making them go into higher debts.

However, if managed well, users can avoid paying such interests and also reap the attractive benefits of credit cards which debit cards and cash on delivery don’t provide.

Here are a few reasons why you should use credit cards for online shopping:

Reward points

Reward points are the primary benefits that credit cards mostly provide. You earn reward points with every transaction you make online. Not just online shopping but you can earn these points for making other purchases as well.

The ASSOCHAM-Resurgent study found that around 17% of online ticket buyers use credit cards to make the payments.

You can then redeem these accumulated points to avail discounts on future purchases or reduce your card bill by opting for a cashback.

Some credit cards provide double reward points for online transactions as compared to offline ones. You can get bonus reward points on reaching monthly and yearly milestones as well. Few companies even provide reward points when you apply for a credit card.

For example, Bajaj Finserv RBL Bank SuperCard provides up to 20,000 rewards points as a joining bonus. The card also comes with pre-approved offers that make availing finance less complicated. Pre-approved offers are additionally available for personal loans, home loans, business loans, and several other financial products.

EMI purchasing

Another superb benefit of using credit cards to shop online is EMIs. You can convert your expensive purchases into easy EMI only by using credit cards.

Some companies also provide No Cost EMIs which refrain you from paying any interest on EMIs as compared to the traditional ones.

Grace period

The grace period is the time you get to pay your credit card bill. This is also called the interest-free period as you don’t have to pay any interest on your expenses during this time.

Generally, companies provide a grace period of up to 45 days. Thus, you get ample time to clear your bill and avoid accruing high interests.   

More security

Credit cards come with added security as compared to debit cards. For instance, the RBL super credit card comes with “zero-fraud liability cover” and “in-hand security”.

Such security features enable you to get your money back in case someone makes an unauthorised transaction with your card. You won’t get such security measures with a debit card.

Easier dispute resolution

Your account is charged instantly when you pay with a debit card online. You will be able to get a refund if the product you received is not what you ordered for. However, it may take up some time and also involve considerable hassle in some cases.

On the other hand, you can raise a complaint with your credit card company and get a chargeback. They can also investigate the matter if it is severe.

Better budget planning

Credit cards can help you plan your monthly budget more easily. Keep a track of all expenses you make online and also curb the unnecessary ones.

Remember the following points when using your credit card:

  1. Keep your credit utilisation within 30-50% of your maximum limit. Exceeding this limit will lower your credit score.
  2. Always pay the total amount due and not the minimum one. Doing otherwise can also reduce your credit score.

    Use your credit cards responsibly and you can make your online shopping more rewarding and worthwhile

Author: verified_user