Understand Credit Card Features, Benefits and Tips

06 Oct 2023

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Credit cards come with various features and benefits, and when use wisely & cautiously are a great way to manage your finances and build a credit line for your personal & professional aspirations. Before you get a credit card, it's important to understand the features, benefits, and things you should kind in mind while using credit card. What makes credit cards popular is the ability to make payments with the card or through UPI if you have a RuPay Credit Card. This can be incredibly convenient, but it also means you need to be careful to not overspend and rack up debt. Ultimately, it's important to weigh the pros and cons before deciding whether or not a credit card is right for you.

Features of Credit Card

Let us take a look at some features of a credit card that you must be aware of-

● Bank-approved credit limit -

A credit card comes with a bank-approved credit limit which defines the amount spend using that card. The limit on the credit card is approved depending on the cardholder's credit score and credit history

● Pay-back period -

The amount spent using a credit card must be paid back by the cardholder before/on the due date.

● Grace Period -

Each credit card has a grace period, which is the time in which you should repay the amount borrowed from your credit card limit to the bank.

On Bank of Baroda Credit Cards, you get interest-free credit period of up to 50 days. Know More at www.bobfinancial.com.

Benefits of Using Credit Cards

There are several credit card benefits that make it one of the most popular forms of plastic money. Here are some of the advantages of credit cards:

● Purchase Now :

Pay Later: One of the main benefits of a credit card is the fact that you can get access to credit without delay. This type of card works on a basis of delayed payment, allowing you to purchase items now and pay for them later. This means that the money you use does not come out of your bank account, thus there is no immediate impact on your finances with each transaction.

● Build & Maintain Credit History :

Credit cards are a great way to build a good & maintain your credit history. This helps banks to evaluate your credit score by tracking your credit card payments and spending. Credit card utilization is also used to measure the trustworthiness of people who are applying for loans, so possessing a credit card is essential for future loan and rental requests.

● EMI Payment Facility :

Paying through EMI is more affordable than taking out a personal loan to make heavy purchases. If you want to buy something costly and don't want to use up all your savings, you can use your credit card to delay the payment. Furthermore, you can decide to pay for it in equal monthly installments, so you don't need to pay a hefty amount at once and reduce your bank balance.

● Rewards, Offers & Discounts :

With frequent and regular use of your credit card you can earn reward points on every purchase that can later be redeemed while making payments on travel or other e-commerce platforms. Credit cards are generally loaded with cashback and other discount offers depending on the card type.

● Interest-free Period :

Credit cards provide a window of interest-free time, lasting somewhere between 45-60 days, in which you don't need to pay extra for any remaining balance. If the entire amount due is paid before the date specified on your credit card bill, then you can use the credit without having to pay interest.

● Credit Card Statement :

Every purchase made by using a credit card is documented, and the list of these transactions is included in the statement sent each month. This record can be used to monitor and manage to spend, create a budget, and for tax-related matters.

● Secured Purchase :

Credit cards offer a secured way of making purchases as compared to other modes of payment.

Get all of the above benefits & so much more with Bank of Baroda Credit Cards. Apply Now with 100% digital application process at https://www.bobfinancial.com/

Also Read: Complete Guide on Credit Card

Listed below are some of the disadvantages of using a credit card-

● Interest on Due Amount :

When a credit card is granted, it comes with the responsibility of reimbursing the bank for the amount that was charged, plus any applicable interest fees.

● Ruined Creditworthiness :

Missing out on your credit payments to the bank, or even maximizing your credit payments may drop Your credit score may be dropped and this may ruin your creditworthiness if you fail to repay your credit purchase amount.

● Overspending :

The flexibility of using a credit card may tempt you to overspend on purchases and make you pay back more than your income, resulting in debts and high-interest rates on your future payments.

● Hidden Charges :

Taxes and fees, such as late payment fees, joining fees, renewal fees and processing fees are often those hidden charges that you need to bear in case of missing a card payment and repeated late payments.

● Credit Card Frauds :

In this age of technology, it is feasible to reproduce a card and obtain access to private data which allows somebody or something else to buy things using your card.

Also Read: Things to Keep in Mind While Using a Credit Cards

What to look for in a Credit Card

We have already discussed the pros and cons of a credit card. Let us just see things to keep in mind while using a credit card:

● Acceptance -

Prior to deciding on a card issuer, it is advisable to research the scope of their acceptance to guarantee it is widely acknowledged.

● Security -

Always check the security features of the credit card. Banks generally waive off charges in case of proven credit card fraud.

● Charges -

When utilizing a credit card, there may be a variety of fees to be aware of, such as annual charges, foreign transaction fees, balance transfer expenses, and late payment charges. Ideally, by using the card responsibly, certain fees like late-payment charges may be avoided. However, other fees like annual charges may be unavoidable and will have to be paid each year.

Also Read: Different Types of Credit Cards

● APR -

Credit cards can have various Annual Percentage Rates (APRs) such as an introductory APR, balance transfer APR, standard purchase APR, cash advance APR, and penalty APR. To make an informed decision, you should be aware of all of them and evaluate how they differ between credit cards.

● Rewards & Promotional offers -

Credit card benefits come in a variety of forms, ranging from cash returns and air miles to hotel points and store advantages. Every rewards credit card has its own distinct advantages and terms regarding how rewards can be accumulated and cashed in. Promotional offers such as welcome bonuses that give you extra rewards for a limited time, initial APRs, or 0% APR on balance transfers are common ways for card issuers to entice new applicants.

You must check Bank of Baroda Credit Cards as they come packaged with offers on all leading brands, including Amazon, Flipkart, Croma, Swiggy, Samsung, & more. Discover latest offers at https://bobfin.in/Offers


Credit cards have become a necessary part of our lives because of their ease of utilization and comfortable repayment options. The discounts, benefit and offers that a credit card offers are unparalleled by any other financial product and can be extremely beneficial for those who use it wisely. Nonetheless, credit cards can become a source of mounting debt if not handled with caution, or if you spend more than you can pay when it's time to settle the bill.

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    The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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