What is a credit card in simple words? 

 March 13, 2022

What is a credit card?

A credit card is a sort of payment card that uses a line of credit rather than the account holder’s cash deposits to make purchases. When someone makes a purchase with a credit card, their account accumulates a balance that must be paid off each month. While not paying off a credit card on time can result in interest and late penalties, credit cards can also help users establish a good credit history.

Know about “what is credit card”. In simple words, a credit card is a tool that can assist you in borrowing money, covering unexpected bills, and building a positive credit history.

You can borrow money from a bank or another issuer up to a specific limit, with the expectation that you would repay the borrowed amount as agreed in the future.

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Credit card risks and benefits are determined by how well you utilize and manage them. You may be aware of one of credit cards’ primary drawbacks: overspending. Spending more than you can afford can result in difficult-to-pay debt. A credit card, on the other hand, can be useful and helpful when utilised properly.

More about credit card

Credit is a measurement of a person’s capacity to repay the debt on time, as reflected in a credit history recorded by a credit agency and expressed as a three-digit number known as a credit score. 

The most popular method of obtaining a line of credit is through the use of a credit card. Credit cards, which are often issued by a bank or financial services organization, allow account holders to make purchases on credit without having to pay cash.

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When a credit cardholder pays off her statement debt in full each month, her credit score will improve. She’ll be more likely to qualify for higher-interest loans and be authorized for credit-required activities like renting an apartment. If the account holder does not pay on time, interest may begin to accrue on the outstanding sum. 

Top 3 methods to get rewarded for paying your credit card account on time

You can now earn rewards simply by paying your credit card bills on time. Are you curious as to how? Take a look at the following payment methods to see how you can get great rewards, savings, and other benefits.

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1. Use the PhonePe app to make a payment.

PhonePe, one of India’s most popular payment apps, has lately launched a tempting cashback offer. According to the terms of the promotion, you can use this app to pay your credit card account in exchange for a scratch card. You can earn up to Rs.1,000 in cash back with a minimum transaction of Rs.500.

2. Use the Paytm app to make a payment.

Paytm features a dedicated cashback section, which you can activate on your app to begin getting weekly, daily, or monthly discounts for a variety of transactions. Paytm normally demands you to do many transactions of the same kind on a regular basis in order to obtain a reward.

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To qualify for the current deal, you must pay 5 consecutive credit card bills totaling Rs.3,000 in order to receive a reward. These offers change on a regular basis and will also change according to your consumption. Keep a lookout for these credit card payment offers in your alerts, and use Paytm to pay your bills to get extra points.

3. Make a CRED payment

CRED is a fantastic software that rewards you with gift cards, rebates, and discounts for paying your credit card bills using it. When it comes to paying your credit card, this variety of incentives allows you to accomplish a lot more. For example, when you pay bills on CRED with a partner bank’s debit card, you can obtain complimentary cinema tickets.

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CRED offers a variety of appealing rewards; all you have to do is look through them to see which ones fit you best, and then use them to pay your credit card bills!

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