According to the RBI, the total number of credit cards in circulation in India in 2019 was 50.3 million, whereas, there were over 840.6 million active debit cards during the same period. Both payment cards prove useful when it comes to making instant cashless transactions in the most convenient ways. Also, each payment card offers its set of unique features and advantages which set them apart from the other.
Regardless, the question of which one between a credit card and a debit card is more beneficial for regular financial transactions is often raised by individuals. In this regard, the fact that in July 2019, around 10.1 million credit cards were added to the existing number in circulation while there was a decline of over 121.4 million debit cards, definitely adds some perspective. This sharp inclination towards credit cards may suggest that users tend to find credit card benefits more user-intrinsic.
Advantages of credit cards over debit cards
Following is a list of credit card benefits that gives this payment card an upper-hand over debit cards.
- Opportunity to improve credit report
By paying off credit card dues on-time, credit card holders can significantly improve their credit history. Doing this allows individuals to improve their credit score over time and helps to enhance their creditworthiness. Individuals can look into details of how to use a credit card to improve their credit score for a better understanding of the same.
- Earn reward points
Credit card users enjoy the facility of earning reward points on their card transactions, a feature that is not available on debit card usage. Leading credit cards like Bajaj Finserv RBL Bank SuperCard offer 20000 reward points to new credit card users as a welcome gift. It also allows users to earn reward points on almost all transactions and on achieving specific milestones. The same is credited to their card account at the end of every month and can be redeemed to make purchases affordable.
The NBFC also extends pre-approved offers to its customers to provide them with a less cumbersome application process alongside a more fulfilling experience. Typically, such offers apply to multiple financial products, including personal loans, business loans, etc. Check your pre-approved offer in a few steps by simply sharing your name and contact information.
- Bill payment and grace period
When a purchase is made through a debit card, the amount is directly deducted from your bank account. Alternatively, money remains in the credit card user’s account until the credit card bill is paid. Also, the grace period for repayment is one of the most prominent credit card benefits one can enjoy. Such a facility not only offers extra time to credit card users to repay their debt but also allows them to do so without paying off any additional interest on the same.
- Additional benefits
Several types of credit cards are available in the market today. It allows individuals to pick a suitable card that does not just match their requirements but also helps to get the most of credit card spending pattern. For instance, certain credit cards come with exclusive benefits to users like an extended warranty on product purchase, vehicle-fuel refill benefits, and discounts on booking flight and movie tickets, among others.
- Better card protection against fraud
Leading credit card providers offer users with an effective card protection plan to help them secure their transactions significantly. For instance, some credit cards come with fraud cover and follow robust security norms to help lower the risk of cyber threats and scams.
- Loan facility
Unlike a debit card, a credit card allows users to avail of an instant loan against their existing credit limit. Moreover, leading NBFCs extend such a facility against a specific interest-free period at nominal processing charges. This helps users to avail timely financial assistance without undertaking any hassles.
All these credit card benefits offer users of this transaction process advantage over debit card users. Though credit cards come with a pre-set spending limit, certain card issuers allow users to exceed this limit to meet their needs as and when required. Nevertheless, individuals should find out ways to optimize their credit card use to make the most of its benefits.