Dubai: I often hear my friends complaining about how credit cards have only made their lives difficult. But for me personally, using credit cards have brought me nothing but joy. This is why I felt the need to write about why this payment tool turned out to be a boon for me.
When it comes to people I know who have had bitter experiences using them, often times their card balances keep mounting despite repaying a substantial amount each month, mostly because of paying only the minimum amount due each time, and this eventually lands them deeper in debt.
I honestly feel that most of those who get deeper into credit card debt are missing out on an obvious trick to using their credit cards more responsibly and failing to understand how the system of credit can actually be worked to their advantage.
I have been using credit cards for more than a decade now and I have never regretted having one. In fact, I have actually enjoyed a whole lot of benefits while also getting time to repay the amount swiped from the card each month.
To put it in simple terms, whatever amount we use from the credit card has to be paid back in full. There is no two ways about it. On the plus side, we get a substantial number of days to repay our dues and it’s our responsibility to honour it and avoid any kind of interest rate or overdue charges.
So while there is no way around repaying what we owe on time, given the number of days we have to repay our credit card debt, I have realised that there are a number of benefits we can take advantage of as long as we keep our spending under control.
What credit card benefits do I make use of?
The massive kickbacks you get when using a credit card regularly is its benefits. While they differ from bank to bank, almost all credit cards do offer some perk or the other. Here are some features and offers that I found most useful, alongside what I learnt when regularly using them.
• ‘Buy now, Pay later’
The biggest advantage I found with a credit card is being able to make a purchase and paying for it later. Most of the credit cards give you sufficient time between 25 to 45 days to repay.
• ‘Easy payments’
Every time a credit card statement is generated there are two things that needs to be mandatorily checked and the difference between those two needs to be understood. One is the ‘minimum payment due’ and the other ‘total amount due’. Here’s what I initially overlooked.
From the date of the statement, a minimum of 25 days is provided to do the repayment. And it’s always advisable to do the payment in full. If it’s difficult to pay the entire amount, opt for the ‘easy payments’ option. All purchases are then converted to EMIs for a period of three to 48 months for a small interest charge. This gives sufficient time to recover and also avoid unnecessary interests.
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• ‘Cash credit’
When faced with a cash crunch its simple to apply for cash on your credit card, again at a nominal interest rate and repay it at your convenience in 6 to 48 months. It’s essentially a loan provided by the credit card issuer. The best part is the process is very simple and hardly requires any documents.
• ‘Balance transfers’
This works when you have two or more credit cards. When you are really low on cash and it becomes too much of a burden to make full payments on your credit cards you can opt for ‘balance transfers’.
With ‘balance transfers’, you can use one credit card to transfer the outstanding balance of another card for a very nominal charge and do the vice versa. This will give you more time to recover from your financial strain and make the payment in the upcoming months.
Some more credit card rewards, cashbacks I fancy
I will also list out some rewards that I found particularly enjoyable to use, and take my word for it, once you are hooked like I still am, you will really love these freebies.
• Cashback
The best perk for me personally has always been getting cashback for my purchases. So with every purchase you make, you get a cashback, i.e. a percentage of the amount it cost paid back to you, between one to 10 per cent, depending on where you shop. I feel it’s like they are rewarding you for using their card.
• Valet services
At one point, one of my cards had offered valet parking services at prime locations including airports in the UAE. During peak traffic hours, I might be going to the airport and make use of this VIP-like treatment, and later collect my car paying absolutely nothing.
• Fitness access
I also used to get access to one of the finest fitness centres in the UAE for seven days in a year if I used my credit cards regularly. I also got a 50 per cent discount to use golf facilities once in a while.
• Discounts at restaurants
Another favourite reward I’ve always loved making the most of was availing discounts at restaurants. Being a foodie, discounts at restaurants are something I always love having. Most of the cards had tie-ups with several restaurants and offer good discounts, ranging from 10 to 40 per cent of your bill amount, if you dine using their cards.
• Travel miles
Travel or Air Miles have also helped me travel for free on several occasions. So every time a certain type of card was used to book a flight ticket, Air Miles would accumulate and then redeemed once substantial amount of miles were amassed.
• International purchases
Though international conversion rates might be slightly higher, I still would recommend using credit cards when you travel. Many cards give double points or increased cashbacks for international purchases and it also helps avoid the hassle of carrying cash everywhere.
• Buy-one-get-one-free movie tickets
Though I have never been a big time movie buff, I have always used this feature. Many cards provide a buy-one-get-one-free movie ticket and allows you to take along another person at no extra cost.
• Seasonal and festive offers
Many credit cards run promotions during festive seasons. It can be a higher-than-usual percentage of cashback or reward points if you make the purchases during the specified time. I’ve noticed that a lot of us usually don’t usually open the messages or mails that come from the banks which provides details about such promotions, and thus they tend to miss out on these offers.
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