6 GOOD reasons why you must have a credit card

Surprised? Here's how a credit can benefit you.

1. Keeps track of your spending

Credit card is good way to monitor your spending. If you do most of your spending on your card, it is a good way to keep a tab on your spending.

When you get a monthly statement, you have your entire spending in front of you, so that you can check on the unwanted spending and cut them down.

2. Good for building a credit history

Credit card usage gives the kind of longevity one needs to build a Cibil credit score. In fact this is one of the best ways to start a credit history.

If your Cibil credit score is bad, you can rely on your credit card payment history to improve your score.

The author is a credit expert with 10 years of experience in personal finance and consumer banking industry and another 7 years in credit bureau sector. Rajiv was instrumental in setting up India's first credit bureau, Credit Information Bureau (India) Limited (CIBIL). He has also worked with Citibank, Canara Bank, HDFC Bank, IDBI Bank and Experian in various capacities.

3. Bank on offers

Almost all credit cards today have a loyalty programme. If you keep tab on your spending and make timely repayments, you can actually avail a whole host of benefits including free air tickets, jewellery, stay in resorts or even fully paid foreign trips.

Many cards have tie ups with certain retail merchants with whom you could use your card to get instant discount.

4. Instant loan

These days it is very easy to get a loan on your card. You have to make a purchase and call the customer care to convert it into equated monthly installments. They just charge a nominal processing fee.

5. Ease of payments

These days most payment modes are automated. Right from phone bills to DTH operators to travel reservations to insurance payments, everything is automated on phone or internet and the most common and easy method of payment is through credit cards.

6. Dealing with emergencies

Yes there is an option of using up your saving, or you may have opted for cashless mediclaim facilities. But there is still a scope for credit card usage in such emergencies, as it equals instant cash.