Credit cards refer to those products which are marketed by bank as buy now pay later product, in simple words if you have credit card then you do not need to pay cash while making purchases, one has to pay the amount at a later date. Given below are some of the features of credit cards –
- Credit cards are ideal for those people who do not want to carry too much cash with them because credit cards enable the customer to make payment of goods or services through credit card.
- In credit cards there is fix credit limit based on the various factors like income of the cardholder, professional status, educational qualification, deposits with bank, whether he or she already holds credit card and so on. So for example if bank has fixed credit limit of $10000 for the customer then the customer cannot make purchases beyond this limit.
- In credit cards there is maximum interest free period where no interest is charged for particular number of days and therefore cardholder enjoys credit free for some time. So for example if the maximum interest free period is 30 days then it implies that if cardholder does not pay on expiry of 30 days from the purchase which he or she has made then after the expiry of 30 days interest will be charged.
- Credit cards are double edged sword in the sense that though cardholder enjoys interest free period for sometime but when that period gets over the interest rate charged by banks or financial institution are very high and if one does not pay money on time then the individual may end up giving interest anywhere between 25 to 35 percent per year on the amount due.
- In order to promote the usage of credit cards various banks offer many schemes like cash back offer or rewards point every time the cardholder uses the card for making purchases and therefore it results in extra rewards for cardholders.
- Credit cards unlike debit cards can be used anywhere and therefore one can say that they offer flexibility when it comes to using the card wherever you want.