When used responsibly, a credit card can be more beneficial than other forms of payment including cash or debit cards. As long as one has discipline, credit cards make financial sense. Credit cards come with a myriad benefit for the holder as listed below:
A credit card can be a good tool to improve your creditworthiness. This will enhance one’s chance of accessing other classes of loans such as personal and business loans as well as mortgages. Used responsibly they can also help you take out future debt at a lower interest rate compared to someone whose creditworthiness is low. I&M credit cards offer their clients credit enhancement upon renewal of credit cards, subject to satisfactory usage.
A credit card can provide one with quick access to cash in case of an emergency. When savings are inaccessible or non-existent, a credit card can save the day. For instance, if one is stranded in a town far away from home, they can use a credit card to sort out a hotel room.
Credit cards can be a great way of taking advantage of internet sales that one might not have planned for. Not only does this save one money, but it is also convenient as the purchase is delivered to one’s doorstep. Credit cards also offer secure payments for goods purchased over the world wide web. Absa credit cards for instance use verified visa features to provide additional security for internet purchases. KCB’s 3D security features also ensure the card holder does not fall into the hands of fraudsters.
By using a credit card that has rewards attached to it, the consumer can actually earn money. The Equity American Express Green Card for example earns its holder reward points when they spend online. The points can be redeemed for travel offers, retail items, electronics and gift vouchers. The KCB classic card gives holders Simba reward points which they can redeem for airtime and even money.
A credit card can come in handy for those who are poor at keeping track of receipts. The card can give one a detailed and complete summary of spending saving one from having to record every purchase as one would have had to do if they paid using cash. A record like this can be all one needs to create a budget and know exactly where their money goes.
If one loses cash or is robbed, the money is gone forever. However, if a credit card is lost or stolen and the user reports it immediately, one will only incur a replacement fee or noting at all to get another card. Stanbic Bank for instance replaces the card for free and protects the card from fraud the instance the card is reported as lost.
As long as one pays off their balance before the interest free period lapses, then one can enjoy free money to purchase whatever they want. An added advantage is that one’s money continues to earn interest if they have saved it in an interest-bearing account, as they take advantage of the interest free period. The interest-free period is different from bank to bank with Absa for instance giving a 50-day interest-free period while Stanbic provides a 55-day interest-free period.
Most credit cards offer discounts at selected merchant stores which one can take advantage of. The KCB classic card for instance has discounts with more than 200 local merchants. DTB credit cards on the other and expose their clients to European discounts amounting to 15 per cent discount on shopping packages, chauffeur driving experience at participating villages and access to VIP lounges in villages in London, Milan, Munich, Paris and more.
Additionally, if one purchases goods using cash and the merchant fails to deliver, then the one is out of luck. However, if one uses a credit card, there is a good chance of getting the money back and the card issuer will do the heavy lifting.
Many credit cards insure items one purchases. This means if the purchase is lost or stolen, you can always get a replacement or the money back. The Absa credit cards for instance offer protection against theft or accidental damage for up to 180 days from date of purchase, insurance coverage for up to $2,000 (Sh226,100) per claim and a maximum of $5,000 (Sh565250) over a 12-month period, item replacement or compensation of item’s value as per the store receipt in the event of accidental damage and online claim processing initiated via the website.
With a Standard Chartered Gold Credit Card one gets additional insurance including reimbursements for travel expenses caused by baggage loss or baggage delays, flight delays or cancellations of up to $750 (Sh84,787) and free travel accident insurance up to $4,000 (Sh452,200).
Travelling abroad can be an expensive affair. A credit card provides a convenient way to pay without having to carry huge chunks of money. It is also easier to get foreign exchange services whilst travelling abroad and at better rates than if one did not have one. For instance, the NCBA card offers the owner savings on foreign exchange charges when spending in US dollars.
As long as the holder pays off the balance before the interest-free period lapses, they can enjoy these benefits while conserving their available cash in interest-bearing accounts. Used responsibly, a credit card can actually earn you money.