The 21st century is wildly known as the technological era. We are in the second decade of the century, but the changes and growth of technology are breathtaking. It has affected almost every other field in the world and has made concrete changes in their development. Technological advances in the financial sector have made many financial tasks easy and accessible. Although the technology of online banking and transactions was introduced in the 1990s, the 2000s were aware of the drastic increase in the use of this technology worldwide. Similarly, credit cards were introduced in the late 1950s, but their use increased as the world saw more technological advances 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 expensive goods. But as banks began to offer extra security measures and additional benefits to their 21st-century use, more and more people are spending this type of plastic money.
Credit cards are now considered a blessing. Their easy accessibility and hassle-free use changes its status from luxury to necessity. You can use them online or in person in any part of the world. They have succeeded in bringing the world closer and accessible financially. Banks across the globe offer different types of credit cards according to their clients’ needs, financial background and credit report. Borrowers must provide minimum documentation to obtain a credit card and these cards are approved as soon as within a day.
Banks offer credit to their customers to buy or pay for their desired products. It is like borrowing money from the bank to pay for goods and pay them later at once or at monthly rates, ie. Issuers of electronic money. Banks charge minimum interest rates and processing fees on these cards. Some banks also charge an annual fee for card refurbishment. By having a credit card you can pay for goods and services even if you do not have enough money in your bank account at the time of the transaction. You just pay the total billing amount later when you have money. Paying your card bills on time will drastically increase your credit score, which will eventually help you in the future if you decide to take a bigger loan. Timely payment of credit card bills shows your ability to pay off your debt on time, and it acts as an important factor of confidence in borrowing heavy loan amounts from a bank.
As mentioned earlier, banks offer different types of credit cards per month. Borrower’s financial profile. Banks decide the credit limit on your card by analyzing your financial history, credit report, current financial obligations, employment status and ability to pay the 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 should not exceed that amount. The credit limit is changed per Using the card. These cards also have a large structure of reward points, discounts and cash back, etc. Various e-commerce sites, restaurants, malls and lounges enter into agreements with leading banks to offer discounts and rewards points to their customers when purchasing goods or services from them. This helps them grow their business and customers by offering them discounts.
All the banks that offer credit cards to its customers have found comprehensive security systems to protect their card users’ account information. These cards come with a special magnetic chip on the back that protects the card holder’s secret numeric information. If you use such a card to buy goods and services, your money will not be deducted quickly from your account. This way, if someone abuses your card, you can tell the bank to block the card and not have to pay for the fraudulent transactions made on the card.
Having a credit card is a responsibility along with being a luxury and necessity. Although these cards are easy to use, one must always be careful not to abuse it. You always have to pay your card bills on time to avoid late payment costs charged by banks. You must also always maintain your credit utilization rate. This means that you should not exceed your credit limit on the card. Also, you should not keep it unused. Failure to use your given credit may also prove detrimental to your credit report. Credit cards can be used to withdraw cash from ATMs, like debit cards. But banks charge transaction fees for ATMs performed on these cards. So unless really needed, avoid raising cash from ATMs using these cards. Many people fear that having a credit card can make them a shopaholic. But you have to control yourself to avoid spending more than you will be able to pay back. You should avoid going unnecessarily and unsolicited for shopping grass.
Credit cards have many benefits such as rewards points, refund offers and discounts. You need these benefits nicely. Know where you can use these benefits and how it will give you a profit. Don’t forget to check your monthly credit card bill. This will help you keep track of your expenses. It will also help you with your monthly financial planning.