When it comes to personal expenditure it is always important to evaluate which method is suited to your financial needs. There is a difference between credit and debit card processing. While debit cards remove the sum spent immediately from the linked account, a credit card offers a short-term loan through which one can buy a number of items. This loan is then paid off at the end of a specific period in the future. If this amount is not paid, interest is charged on the amount and continues to accumulate over a period of time until the debt is paid off.
Millennials are strong supporters of the credit card, as it gives them a number of benefits in today’s world, and allows them to live the kind of lifestyle they want without the restrictions of a debit card. Students can avail exciting offers by using a credit card for students.
Here are 7 reasons why Millenials love using Credit Cards:
1. Building a good Credit History
A good credit score is something every millennial has been taught to strive for. If one is allowed to understand and responsibly use a new credit card at a younger age, the credit builds up as they get older and their credit reflects through the activity they use the card for.
2. Can be used in Emergencies
A credit card comes in handy while in an emergency. If one does not have cash on them or a debit card is giving trouble since a minimum amount may be required in the account- a credit card allows the holder to make a purchase and quench the immediate need while being able to pay the debt later when they’re able to get out of an urgent situation. This also extends to the kinds of discretionary expenditures that millenials are so fond of, allowing them to live, at times, beyond their immediate means.
3. Earning Special Rewards
Best Credit cards have allowed millennials to earn special reward points for every rupee spent. These reward points can later be redeemed to be used in the form of vouchers, gift cards and more based on the brand collaborations with the credit card company. This is particularly appealing to millennials, who love a good deal and are getting to explore even more options because of the rewards they got on using their credit cards.
4. Can be used Anywhere
Millennials are known to travel across the world on budgets. Many credit card companies often reward credit card usage with frequent flier miles that help to discount the cost of flight tickets to exotic destinations, and even allow you to upgrade your seats to higher classes. Having a credit card on them on the go also allows millennials to bypass some of the barriers that can be posed by a debit card and making themselves more secure in the case of theft.
5. Avoiding Fraud
Having seen the previous generation fall prey to a number of scams over the years, millennials have seen the advantage in the use of a credit card in case of a fraud charge. Since a credit card is set up as a loan payment that can be repaid at a later date, it allows individuals to avoid false charges to their card. With a debit card if a false charge is made, the amount is immediately removed from the account. In this scenario, it can take time for the charges to be reversed and money to be returned. These kinds of frivolous expenses can negatively impact a credit score.
6. Grace Period for your Payments
46% of millennials have spent time to improve their saving habits. Since the amount doesn’t need to be paid immediately with a new credit card, your savings remain within your account for that much longer which is good since time and the value of money go hand in hand. This means that while spending you remain aware of every expense and in turn you don’t need to constantly watch your account balance fall.
7. Financial Savviness
Proper use of a credit card and all the many rewards it can bring is a mark of financial savviness. Millennials are far more comfortable with technology and are more interested in living an interesting life than a conventional one. Doing so requires financial acumen as you plan your expenses, and make use of the best deals available. Because of the ease of use of a credit card, the way it delays outflows of cash and gives rewards at the same time, a credit card is a millennials best friend in helping them live the life they want, provided of course, that they are responsible with it.
As easy as it may be to get a credit card, there are situations where one should avoid the same such as if they spend more than they can repay. This would negatively impact one’s credit score and create debt that could be avoided. Most millennials understand that and are able to make full use of the flexibility wielding a great credit card offers.
However, it is important to note that one should find a credit card that suits your lifestyle and your expense pattern as each credit card from each provider has a different rewards scheme. If you’re looking for a credit card, Finserv MARKETS has a wide selection of credit cards from reputed providers, including thematic ones such as for Travel, Shopping and Lifestyle that can help you match your expenses with a credit card that rewards you living the way you want. To know more, check out the Finserv MARKETS App. If you don’t have a credit card yet, then apply for a credit card today!!