There’s probably no other word that’s more shunned upon in the personal finance world as credit cards. Yes, credit cards can be intimidating for most but if you use them wisely, they are an excellent financial tool. Otherwise how on earth would you buy the latest iPhone which has 2 additional features than the previous version? (Sorry Apple fans. I use Android)
As long as you don’t overspend and rack up interest in your card, credit cards are great on so many levels.
When we apply for a credit card, we only look at the annual fee and which card has the most offers. But there are so many other credit card benefits that most Sri Lankans have no idea of.
Here are 7 hidden credit card benefits that you can start using right now.
0% installment plans
This is one of the best perks most Sri Lankan credit cards offer. By partnering with different merchants, they offer 0% installment plans on certain products. Lately, this has been gaining popularity in Sri Lanka with the rise in e-commerce and online purchasing.
Usually, credit card interest rates are higher. So whenever you have the option to go for 0% interest rate installment plan, take advantage of it. You also get the benefit of breaking down your total payment to installments so your wallet will not feel the burden at once. Some credit cards offer even 60 months 0% installment plans which are great if you’re buying something really expensive but you don’t have money to pay at once.
Did you know that you can get a cash loan from your credit card? Yes, that’s right. If you suddenly need some money, you can get a loan from your credit card. Usually, most cards offer a 50% loan facility from the credit limit you have. Of course they charge a service fee and interest for your loan but usually, the interest rate is lower than the credit card rate. You also have the option of converting it to installments.
Cashback rewards offer a percentage of the money you’ve spent with your credit card. It’s super simple. For each transaction you pay with your credit card, the card will offer a percentage of the money you spend.
Think about this for a minute. If you’re using your credit card to pay all your bills, Cashback rewards can do wonders. Why? For every rupee you spend, you’re going to get a Cashback. Isn’t that great?
Different cards offer Cashback rewards for different categories. For example, HSBC Platinum Cashback card offers 10% cash back on mobile, supermarket and fuel bills. That’s a huge saving on your bills. Additionally, you will also get a Cashback of 0.1% on every other transaction. If you want to learn more about the HSBC Platinum Cashback card, click here.
Did you know that you can convert any credit card transaction to an installment plan? Yes! Imagine you want to buy a fridge and it’s Rs.70, 000. If the merchant is not offering an installment plan, you can still purchase the fridge using your credit card. Then you can contact the credit card company and ask to convert it to a 6, 12, 18 or even a 24 – month installment plan.
Based on the number of months you select, the interest can vary. But rather than having the entire amount in your statement, going for an installment plan will always offer you a better interest rate. Whenever you can’t settle the entire amount within the interest-free credit period (usually 51 days); you can convert it to an installment plan.
This is something that most of us have heard of but have no idea of!
Many credit cards offer reward points for each transaction you do. For example, your credit card can offer 1 reward point for every Rs.100 you spend. Once you accumulate enough reward points, you can redeem them with their merchant network. You can talk to your credit card provider to know more about reward points and how you can redeem them.
Free travel insurance
If you have ever been out of Sri Lanka, you know that there’s a thing called “travel insurance”. Most don’t know this but credit cards usually offer overseas travel insurance. This can be great because you don’t have to go through the hassle of getting separate travel insurance. Just speak with your credit card company to see if they offer travel insurance. If they do, all you have to do is buy the tickets using your credit card and you’ll be eligible for travel insurance.
If you have overspent and feel like you have no way of paying off your credit card balance, you can simply transfer your balance.
Balance transfers are simple. If you’re stuck with a huge balance in one card, you can get another credit card that offers balance transfer facilities. They will pay off the balance from your first credit card and convert it to an installment plan. The benefit of transferring your balance is you will be paying a lower interest rate than the existing card.
Well, these are some of the lesser known credit card benefits that you can start using immediately. If you have always had a negative notion of credit cards, time to give it a second thought. It’s your spending habits that get you in trouble. Not your credit card. If you’re financially disciplined and you know what you’re doing, credit cards offer fantastic offers that you can benefit from.
Did you like this post? Then add a comment and let us know your favorite benefit. Do you think we have missed anything? Add a comment and let us know.
Image credit – http://www.picpedia.org/credit-cards/credit-cards21.html