Most of us have a bank account these days. Any good financial institution or bank will give you the facility of a credit card. When you are planning on purchasing something by using your credit card, all you need to do is swipe the card in the specific registered machine and the bank pays for your purchases. But does it mean that you are getting the things for free? Well, no.

Though at that point of time you are not having to pay anything for your purchases, you will actually be billed all the expenses at the end of the month. So a credit card essentially gives you access to plastic money at the time of need and you need to pay it back once the amount is  billed by the bank.

Eligibility criteria for credit card owners

Though the eligibility criteria differ from one bank to another, you essentially just need to have a bank account with the institution you want the credit card from. Now the important thing to keep in mind is that most credit cards generally have a limit. So if you are opting for a credit card with a higher limit, you might need to have a good credit score and your banking institution will do a quick background check. Apart from that, these days, you can event get an instant credit card approval from the different online site and apps, while on the go.

Benefits of owning a credit card

Getting instant cash is one of the most popular reasons why people opt to have a credit card. But along with that there are many other benefits attached with the same.

  • You can go cashless

Having a credit card makes it easier for you to go cashless. You do not need to carry around a lot of cash as all you need to do is swipe your credit card whenever you need to make a payment. It is not only a much safer option but it makes the payments rather secure as well.

  • It is much more convenient

In most cases, it is much more convenient to swipe a credit card than to pay with cash or any other medium. At times it is normal to have a shortage of cash or bank balance. In such cases all you need to do is swipe the credit card and your payment is made. This makes the whole process more convenient.

  • You have a system of record keeping

When you are making a payment through your credit card, it automatically gets recorded by your bank. At the end of the month, when you receive your bill, you will get the details of all the payments you have made. This helps you to keep a record of all your payments and the expenses that you are making each month.

  • Loans against credit cards

If you have a credit card from a good banking institution, you should be able to get a loan against it. This is one of the best benefits of owning a credit card. There are many different types of corporate credit cards that help you to get loans for your company. As an entrepreneur if you are having trouble financing your company, you can use your company credit card to get a loan for such investments.

  • Perks attached to credit cards

Having a credit card helps you to get many perks. The most common ones are the different discounts that you can avail if you are making payments with the credit card. These days most big brands and online shopping portals have tie ups with the different banks and these credit card holders become eligible for these customized discounts and offers.

  • EMI facility option against credit cards

If you require purchasing something on an EMI, you can easily avail this facility with the help of a credit card. Most of the EMI companies will accept credit card as the platform for such payments making it easier for you to make the payments in installments.

Can a credit card get you into trouble?

Though there are many benefits attached to a credit card, if you are not careful, you might be faced with some disadvantages as well. Here are some of the common troubles you might face with a credit card.

  • You might overuse

Since you do not have to make any immediate payments, it can sometimes get easy for you to over use it. If at the end of the month you have the required finances to pay back the bill, you do not have any trouble. But if you are short of funds during the bill payment date, you might have to pay some interest.

  • Unexpected fees

Sometimes there are some unexpected fees attached to the credit card which makes you pay more than the actual cost of the goods and services that you purchase.

  • Increase in debt

If you are unable to pay back your bills on time, you keep on accumulating debt. This has an adverse effect on your credit rating.
It is advised that you use your credit card only when necessary and within your means. Make sure to set a comfortable limit to your credit card and pay off your credit card bill before it becomes subject to any interest.