It’s always easier to carry a plastic card in your wallet, rather than stacking up a bundle of notes. Which is precisely why millennials use credit cards instead of cash. Credit cards let them maximize their earning potential while bearing numerous costs – which include education, lifestyle costs, or in some cases owning a home or even supporting their families. Possessing a credit card also helps them have access to a source of credit in case of any financial need.
In other words, millennials have good reasons to use credit cards to help them manage their financial needs.
Let’s look at some of the reasons why millennials use a credit card and its benefits:
1. Cash Back on Credit Cards
Several banks provide cash-back opportunities on credit cards that are used to pay any monthly bills – utility bills or monthly grocery shopping, etc. You can also get a certain value back on the amount you spend on buying fuel for your vehicle.
2. Cash Withdrawal Using Credit Card
Credit cards allow you to withdraw cash up to a limit, which is usually less than the actual approved credit limit. These withdrawals attract a significant fee and are not always the best way to withdraw cash. However, with companies like MoneyTap, that offer a credit card along with a personal line of credit, you can withdraw the entire approved limit without attracting huge fees. All you need to do is transfer the amount into your own account through the MoneyTap app and then withdraw it as you would from your own bank account. This is a big benefit of credit cards amongst millennials today.
3. Reward Points On Credit Cards
Many credit card companies give reward points on purchases that you make using your credit card. Credit line companies like MoneyTap give reward points with their Credit Card 2.0. You can then use these points for making other purchases. You can use them for buying vouchers for movie or play tickets from online portals such as bookmyshow.com, avail of various offers at restaurants and dine-outs, access airport lounges, etc. With certain credit card schemes you can enjoy hotel stays with complimentary room upgrades and meals with the card’s hotel partners.
With the MoneyTap RBL reward scheme you can earn reward points on all domestic and international purchases made and redeem them on the products of your choice. For e.g., you can earn 1 reward point for every ₹100 spent on total purchases, which include groceries, travel, electricity bills or even dining.
4. Protection From Fraud
Using a credit card is also safer than a debit card (Link to: https://www.thebalance.com/what-is-a-debit-card-2385853), especially in case of fraudulent activities. You will not be out of money immediately if you are a credit card holder.
5. Converting Credit Card Purchases into EMIs
If you plan to make a huge purchase – example, a television, laptop, or even a car, you can buy it through affordable equal monthly installments, made through your credit card. Financial institutions usually charge some interest for making a conversion into EMIs. With MoneyTap, you can convert huge purchases into EMIs with a few taps on your app at you extra cost. With the help of credit cards, independent millennials are now being able to make big purchases and living good quality lives, which would be difficult otherwise.
6. Zero Interest Period
Another huge advantage for millennials using a credit card is that you can defer your payments till you have billed your dues. Many financial institutions provide a 50-day grace for repayment. In terms of repayment, MoneyTap’s new Credit Card 2.0 feature allows you to make partial repayments for your cash withdrawals, and with low-interest EMIs. This is one benefit that millennials would see as a valid reason to use credit cards.
The benefits that credit cards offer are real and it makes good sense to have one. However, the importance of using credit responsibly cannot be understated and if used carelessly, credit cards can pose a risk to your financial stability. On the other hand, using it with caution and repaying the bills on time, can have huge benefits. It is also important to choose a credit card which has favorable features like the one offered by MoneyTap.
Which is why, credit cards are a rage among millennials.