I come across a lot of people who are of the opinion that having credit cards will expose them to a lifetime of debt.This is far from the truth.Here are 4 ways you can actually benefit from Credit card usage :–

1. When you use a credit card you postpone the payment by a month,so the amount that is still in your savings account at the end of the month generates interest (I accept that the amount generated might be minuscule but when you do this for several months the amount saved is noticeable) .The key is to ensure that you pay the complete amount due to avoid paying more which will nullify the returns obtained by postponing payment.

2.When you pay for foreign holiday packages or any transaction involving a huge amount using ,you can break the transaction into EMIs and then invest an amount slightly less than the EMI amount every month into shares/mutual funds (Of course,you need to understand the risks behind selecting the mutual funds/investing in shares but the benefits are worth the time and money invested).This will ensure that you have funds liquidity when you need.

3. Using credit cards wisely by paying off the total amount due correctly on a monthly basis can show that you are a credit-worthy person and improve your Credit score.This will help in the event you do need take loans to start your own business or for personal reasons.

4.Almost all credit cards have their own reward system tied to usage and you can make use of them to shop or donate to charity.

P.S : If you are an impulsive spender and think that a credit card can cause major problems to your financial setup,you need a shrink.But I guess,discarding the credit card is cheaper than going to the shrink …Just Kidding 🙂