Having a Credit Card has become a necessity in the present times. The excellent benefits and rewards offered by Credit Cards make them a potent financial tool to enhance the value of your hard-earned money.
Now, as the needs of the users are evolving, so are the Credit Cards. Banks and credit card issuing companies are launching customised Credit Cards that maximizes the advantages for the users based on their lifestyle. You can apply for the most suitable Credit Card in a few simple steps and enjoy a great shopping experience. But do you know that you can fight an emergency effectively with your Credit Card? Read on to know more.
While the naysayers might dissuade you from using a Credit Card during exigencies, you must know that, when managed carefully, cards can be one of the most reliable allies during the times of emergency. Whether it be an online transaction or an offline transaction, Credit Cards allow you to pay for transactions even if you do not have enough money in your bank account. The interest-free period that you get with your Credit Card allows you to take care of immediate expenses. You get enough time to plan for the repayments.
Here are 5 ways Credit Cards can help you during an emergency:
If you are stuck somewhere and need cash urgently, then you can use your Credit Card to withdraw the required cash. Every Credit Card comes with a credit limit, but this total credit limit also has a sub-part, which is a cash advance limit. This limit specifies the amount of cash you can withdraw against your Credit Card. You can use an ATM belonging to any bank for this transaction. Your Credit Card issuer will levy cash advance charges and interest charges when you use this facility and will reduce the available cash advance limit accordingly.
Though, it is essential to mention here that the rate of interest levied against cash advance is very high. It hurts your CIBIL score. So, you must use this facility only during emergencies and repay the amount as soon as possible. When you make the repayment, the cash advance limit will be restored accordingly. But do remember that the repayments will first be adjusted against the old Credit Card dues, if any, and then against the cash advance limit.
It is recommended to swipe the card for online payment rather than withdrawing cash from the ATM. For, the latter would attract a hefty charge, which you should avoid at all circumstances.
Many banks offer an instant unsecured loan on Credit Card for their existing cu Under this facility, a pre-approved loan is sanctioned to a customer based on his/her past credit usage behaviour. This facility is offered to select customers at the discretion of the issuing bank and is in no way a right of the Credit cardholder. To avail of this facility, the customer needs to log-on to the internet banking account and accept the terms and conditions of the loan. The amount will be transferred to the bank account of the customer almost instantly. Customers can avail of this loan on Credit Card through mobile banking and phone banking, as well.
For instance, when you avail of a Loan on the HDFC Bank Credit Card, the bank will create a separate loan account for you, different than your Credit Card account. This loan account will have a separate account number and EMI payment schedule. The maximum amount available as a Personal Loan on HDFC bank Credit Card can be higher than your existing credit limit.
Urgent requirements do not wait for emergencies to get over. You can use your Credit Card to purchase any products that you require, online as well as offline, and then convert the transaction into EMIs. Many online stores and retail outlets now offer the facility of No Cost EMI or low-interest rates for purchases against Credit Cards. This allows you to fulfill your requirements immediately, without any need to pay the down payment, and repay the amount over a period of up to 24 months, reducing the stress on your finances. For instance, when you covert a purchase into an instant Loan on ICICI Bank Credit Card, you can opt for a repayment tenor from 3, 6, 9, 12, 18, or 24 months. The rate of interest applicable is just 1.33% per month on reducing the balance.
Additionally, if your Credit Card has some outstanding dues, then you must be serving high-interest rates against those dues. To reduce the interest burden, you can convert the total outstanding dues into a Personal Loan and repay it through EMIs. The rate of interest against this loan is much lower than what is levied against a Credit Card.
If you are travelling to a foreign country and have forgotten to carry the required foreign exchange, you can use your Credit Card to complete the transaction in the respective local currency. Your Credit Card company will levy a foreign exchange mark-up fee for this service, but during times of emergency, your Credit Card could be a lifesaver. Though, you must activate foreign country usage on your Credit Card and also inform your bank regarding the upcoming visit to avoid any hassles. You can also use your Credit Card to withdraw cash from foreign ATMs.
If you or any of your family member(s) have suffered any injury or critical ailment and require instant hospitalisation, you can use your Credit Card to pay for the hospital bills as well as the cost of the medicines. This facility comes in extremely useful when you are short of cash, and the insurance company has denied your claim for cashless treatment. In such a situation, rather than facing the stress of asking your friends or family for a loan, you can easily settle the hospital bill with your Credit Card. Subsequently, when the insurance company reimburses your claim, you can settle the Credit Card dues easily.
The benefits on offer with Credit Cards are numerous, but you need to be a financially disciplined individual to make most of the available credit limit.
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