Published Article Details

How to take advantage of credit cards

Posted by: Arti Bhargava on Sep 25, 2017, 06.30 AM IST

Anupama has just started working. She is aware of the dangers of indiscriminate credit card use and the fact that it can lead people into debt traps. She uses a debit card linked to her bank account and finds it a good alternative to a credit card.

However, she is flooded with offers from credit card companies and finds the convenience being pedelled quite attractive. She wonders if a credit card will add any value to her ability to manage her financial situation efficiently.

Anupama should know the role a credit card can play in her financial life depends upon her ability to use it to her advantage. She can manage her cash flows conveniently by using a credit card (thanks to the credit cycle) to meet her regular expenses.

Making payments for regular expenses through a credit card is also a good way to keep track of expenses. Credit cards will also help her meet expenses in an emergency if she is short of funds. Overdrawing her bank account or a personal loan in such a situation will come at a higher cost. There are some situations when using a credit card is more advantageous than a debit card.

Making payments online using a debit card carries a greater risk since an online fraud can cost Anupama her entire bank account balance. Similarly, an error in charging a purchase to a debit card will mean that the amount will be debited to her account immediately and take time to reverse during which time she may fall short of funds. In the case of a credit card, she can appeal against the error and may not be required to pay.

Credit cards give her the facility to make a large purchase even if she does not have the funds immediately. At times, there may be the facility to convert large purchases into EMI payments, in which case it will not attract rolling credit charges provided she makes the EMI payments regularly.

Last but not the least, a credit card is the easiest way for Anupama to build up a history of good credit behaviour based on which her credit score will be assigned. A good score will help her access loans on good terms when she wants it. By being fully aware of the pros and cons, Anupama is very likely to use a credit card responsibly.(


The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.) This article appeared in Economic Times dated Sep 25, 2017, 06.30 AM IST

Online Courses

Capital Markets
Basic Level
BANKING AND CAPITAL MARKETS

Get the training you need to work in the Banking and Capital Markets industry through this intensive course

Capital Markets
Basic Level
SECURITIES AND OPERATIONS PREPARATORY

This NISM preparatory training is designed to help students whowant to take the securities and operation ex

Capital Markets
Basic Level
DEBT INSTRUMENTS - BASICS

Get a complete understanding of debt instruments in India. This course is ideal for professionals who want

Capital Markets
Basic Level
EQUITY MARKETS BASICS

More people in India are investing in equities and shares creating a need for more skilled equity managers

Capital Markets
Advance Level
EQUITY LINKED STRUCTURED PRODUCTS

Structured products are used to introduce tailor-made investment options in the world of finance. Our cours

Capital Markets
Advance Level
DEBT INDICATORS

What factors affect the debt market? Learn all about debt market indicators to understand the world o

Capital Markets
Advance Level
DEBT MARKET ANALYTICS

Need help to understand the bond market? This bond valuation course simplifies debt bonds, bond yield

Capital Markets
Intermediate Level
CREDIT RATING

Poor credit ratings indicate risky investment opportunities. Learn about the concept of credit rating, its

Capital Markets
Advance Level
EQUITY VALUATION PRINICIPLES

Learn the different principles of equity valuation along with their real world applications.

Capital Markets
Advance Level
EQUITY MARKET INDICATORS

Reinforce your stock market basics by learning about equity market indicators through our online course.

Capital Markets
Advance Level
DEBT MARKETS LEVEL - 2

Understand the structure of debt capital markets and the structure of its primary and secondary markets.

Capital Markets
Intermediate Level
FINANCIAL PLANNING AND MUTUAL FUNDS

Learn to invest based on investment goals and objectives through our Intermediate course on Mutual funds.

Capital Markets
Advance Level
EQUITY MARKETS -II

Learn advanced methods of fundamental and technical analyses of financial statements in capital markets.

Other Financial products
Basic Level
BANKING AND SAVING PRODUCTS

Banking is a highly respectable career choice in India today. It is a growing sector which translates into

Other Financial products
Basic Level
DEPOSITS AND BONDS

The bond market is considered to be one of the safer avenues for investment, providing reliable and consist

Other Financial products
Advance Level
ALTERNATE ASSETS - COMMODITIES AS AN ASSET CLASS

Understand commodities as alternate assets for investing and their different types through our course.

Other Financial products
Basic Level
PERSONAL LOAN AND BUSINESS LOAN

Learn the working behind the process of issuing unsecured business and personal loans from our basic course

Other Financial products
Advance Level
BILL DISCOUNTING AND SUPPLY CHAIN FINANCING

Learn what bill discounting and supply chain financing is and its different features with our online course

Other Financial products
Intermediate Level
INTEREST MARGIN AND LENDING PROCESS

Learn how lenders make pricing and margin decisions during the corporate lending process through our course

Other Financial products
Advance Level
COMMODITIES TRADING

Learn the basics of commodity trading along with how commodity markets function via our beginner's course.<

Other Financial products
Basic Level
MORTGAGE FINANCE

Understand the need for mortgage finance along with the need, EMIs, pricing factors and repayment options.

Other Financial products
Intermediate Level
MATHEMATICS OF LENDING

Understand the concept of impaired loans and the mathematics behind lending through this online course.

Other Financial products
Advance Level
PORTFOLIO MANAGEMENT SERVICES - 1

Learn about the structure, features, operational aspects and positioning of the products on the PMS platfor

Other Financial products
Advance Level
PORTFOLIO MANAGEMENT SERVICES - 2

Learn how to construct individual portfolios and analyse risk and performance to meet investment objectives

Other Financial products
Intermediate Level
LEASE FINANCE & FUNDING

Understand the benefits of leasing assets and different types of lease finance options through our online c

Other Financial products
Intermediate Level
LOAN AGAINST SECURITIES AND INSURANCE

The course guides you to understand its types, eligibility, margins and pricing on loanagainst securities a