Credit cards have become a ubiquitous part of our daily lives. With the convenience they offer, it’s easy to see why. They provide a simple way to pay for goods and services without having to carry cash. Additionally, credit cards offer several benefits, such as purchase protection, rewards programs and cashback offers. However, there are also some downsides which should always be considered before deciding on a credit card.
In this article, we will discuss the pros and cons of credit cards and analyze the top credit card bill payment apps such as Bajaj Finserv, Cred, PhonePe, Gpay, Paytm etc., to help you make an informed decision.
Pros of Credit Cards
- Builds Credit Score
Credit cards are a great way to build credit score. When used responsibly and paid off on time, a credit card account will reflect positively on your credit report. A good credit score helps in getting loan approvals or other forms of credit in the future.
- Purchase Protection
Credit cards offer purchase protection. Customers can dispute a fraudulent charge or in case the product is defective or damaged. In most cases, buyers get their refund or a replacement product, which is generally not possible when payment is made through cash or debit card.
- Rewards Programs
Credit card companies offer a variety of reward and cash back programs to their customers. These reward programs help customers save money, earn incentives and points, that can be redeemed for travel, cashback, merchandise, or other rewards.
- Secure Online Purchases
With the rise of e-commerce, online shopping has become very popular these days. Credit cards offer a secure way to shop online. Credit card companies offer fraud protection, encryption and secure payment gateways reducing the risk of identity theft or hacking.
- Convenience
Credit cards provide a convenient way of making payments. A credit card is accepted almost everywhere and can be used for online payments or at a physical store. Furthermore, customer cash withdrawals from ATMs can also be done using their credit card.
Cons of Credit Cards
- High-Interest Rates
Credit cards charge interest on unpaid balances. The interest rates can be high, making it difficult for customers to pay their minimum balances due to the high charges. The interest rates on credit cards can be anywhere between 18-30%, making it a very expensive credit option.
- Late Payment Fees
Credit card companies charge a late payment fee if a customer does not pay their bill on time. These fees can be significant, sometimes more than the minimum balance required to be paid. Late payment also reflects negatively on the credit score.
- Over Limit Fees
Credit card companies charge an over-limit fee when a customer exceeds their credit limit. These fees can be substantial and leave the customer with limited funds to repay.
- Credit Score Damage
Failure to make timely payments on credit cards or exceeding credit limits can damage credit scores. This can make it more challenging to secure loans, insurance or rental applications, and other credit privileges.
- Temptation to overspend
Credit cards can be misused very easily. Due to the convenience of payment, customers tend to overspend beyond their budget, leading to high outstanding balances and interest costs. Credit cards should be used responsibly to avoid adding debt to the customer’s financial burden.
Credit Card Payment Apps: A Comparative Analysis
Several payment apps assist customers in paying their credit card bills online. In this section, we’ll analyze the top credit card bill payment apps like Bajaj Finserv, Cred, PhonePe, Gpay, Paytm etc.
- Cred
Cred is one of the most popular credit card payment apps in India. It allows customers to pay their credit card bills, redeem rewards points, and much more. The app provides real-time credit score updates from a credible bureau. Cred offers a ‘credit line,’ also known as EMI facility, enabling customers to convert high-value payments into installments with tenures ranging between three and twelve months.
- PhonePe
PhonePe is an app that provides a digital wallet, multiple payment options, and credit card bill payment options. PhonePe allows customers to link their credit cards with the app and make payments directly to the credit card company.
- Gpay
Gpay is another popular payment app that customers can use to pay their credit card bills. Gpay offers several features, including instant money transfers, a digital wallet, and bill payments. Customers can add their credit cards to Gpay and make payments using the app.
- Paytm
Paytm is perhaps the most well-known and widely used payment platform in India. Customers can link their credit cards to the app and make payments directly to their credit card companies. The app offers multiple payment options, a digital wallet, and many other features.
- Bajaj Finserv
Bajaj Finserv is also a widely used payment option by customers. The app allows customers to pay credit card bills, make instant personal loan payments, check out loan approvals, and other benefits. The app also has an ‘EMI store’ that provides discounts on product categories such as gadgets, travel, and consumer items.
Credit cards come with several advantages and disadvantages. They provide convenience, purchase protection, build credit scores, and reward programs. However, high-interest rates, late payment fees, and overspending risks can lead to debt and damage credit scores. Before acquiring a credit card, customers should weigh the pros and cons and choose a suitable card for their needs.
Payment apps like Bajaj Finserv, Cred, PhonePe, Gpay, Paytm etc. provide customers with an easy way to pay their credit card bills online. It’s important to research and analyze each payment app’s features, fees, and services provided, to help customers make an informed decision while selecting the app that suits their needs.
