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Top eight reasons to have a credit card

Priyanka J, a Bangalore-based bank employee, is a paranoid person when it comes to credit cards. She will refuse to have one because, "I have enough money to spend and I don't need credit. I believe loan and credit is for those who do not have money!"

But here are the top eight reasons to have a credit card:

1. Ease of payment

The credit cards have revolutionised the mode of payments for online ticket bookings, recharge on internet and phone. It is also become an easy mode of payment at merchant establishments.

2. Convenience

It becomes cumbersome to carry cash, especially if you have a big purchase to make. Imagine carrying a bag of Rs 1,00,000 in cash. Also, if you carry currency in bigger denomination, many a times, a merchant may not have exact change to tender.

This problem can resolved easily with a credit card, as the merchant will swipe the exact amount you owe him.

3. Rewards programme

When compared to conventional mode of payment, credit cards offer interesting reward programmes. These reward points can be exchanged for a range offers including free flight tickets, holidays, electronics and many others.

4. Building CIBIL credit history

If you do not have a CIBIL score, credit cards are a good way to start building one. The importance of a good credit history is beyond arguments. More here on how to improve your credit score.

5. Easier dispute resolution

In case of fraudulent transactions, it is easier for to resolve a dispute in credit card transaction when compared to debit card transaction. In case of debit card transaction, the money has already left your account, which is not the case.

6. Freebies

Many credit card companies offer freebies. Some of them give you gift vouchers for joining, discount on hotel and restaurant bills, discount on electronics and others at partner retail outlets.

7. Instant credit

These days, customers don't have to depend on small loans. They can just swipe the card and convert it into EMI at a nominal processing fee.

8. Organises life

Many credit card companies will offer the benefit of paying your utility bills and insurance premiums at no extra cost. All you have to do is to give standing instructions to the credit card company and they manage your CNG, telephone, electricity and insurance premium bills.