Personal Finance

Updated on: Wednesday, June 12, 2019, 05:02 PM IST

Should I use my credit card for everything?


A credit card is an efficient financial tool that helps you make your purchases first and pay for them in your monthly billing cycle. It comes handy when you do not carry a lot of cash with you and are required to make payments on an immediate basis.

For purchasing a credit card apply online on the bank’s website or personally visit your branch, fill in the required forms, and you can receive the card within a few days. Owning a credit card can help you manage your expenses better, but it is a good practice to use it efficiently and in an informed manner.

Using this financial tool for all your financial necessities may or may not be the right thing to do.


Therefore, it is important to understand the pros and cons and use it in a responsible way to keep debts at bay.


There is no doubt that a credit card keeps you financially independent and helps you meet your expenses in an easy and convenient way. Here are some of the advantages:


Safety and reliability: Making payments is safe and reliable using a credit card since it saves you from a lot of fraudulent losses. It comes with very high protection and also guarantees the reimbursement of your hard-earned money in case the card is involved in a fraudulent transaction never made by you.

Reward points: Often, you win reward points for every credit card transaction you make. These reward points when accumulated can cover a number of expenses like restaurant payments or travel, and can also be redeemed for gift cards and more.

Good credit score: Responsible use of your credit card helps you build a good credit score since your payment history speaks volumes about your credit card usage pattern. For maintaining a good credit score, making small purchases with this tool and repaying them in full during the monthly billing cycle is the right way.


Sufficient payback time: Since your card is billed on a monthly basis and your purchases do not debit money instantly from your bank balance, you get a sufficient window to pay them back.


Using credit card frequently can have the following disadvantages:

Overspending: The convenience of swiping the card instead of carrying cash allows you to make impulsive purchases at times. This may lead to overspending and a large debt if you do not keep a check of your card transactions.

Restrictions for small purchases: Many retailers might refuse to accept credit cards for small purchases and you may have to rush to the ATM and withdraw cash for payment. This is because the cost incurred by these retailers to process the charge is greater than the profit they make on your purchase.

A credit card is a personal banking solution that your bank allows you to make use of to manage your regular and unforeseen expenses. Therefore, it is important to use it responsibly to stay away from overspending. If you can pay for your credit card purchases in full in the monthly billing cycle, then it is a good choice to take care of all your major expenses with it.

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Published on: Thursday, March 14, 2019, 10:23 AM IST