Today, many consumers prefer online shopping, owing to the convenience, discounted rates and the option to compare and choose from a diverse range of products. However, when it comes to making the most of the advantages of online shopping, choosing the correct payment method plays an important role. For this, credit cards come as a great option which can help you optimise your benefits by offering cashback, deals and discounts, rewards and other such perks on every spend you make online. Some credit card providers also offer co-branded cards, like Amazon Pay ICICI Credit Card, in collaboration with online portals and brands, handsomely rewarding consumers for their brand loyalty. If you are wondering how credit cards can help you save more on online spends, let us dive further into detail about what advantages credit cards hold.
Advantages of Shopping Online Using Credit Cards
Cashback Offers
Many credit cards help you save by providing cashback on online spends. Every time you use your credit card online, you can earn back a certain percentage of that spend in the form of cashback depending upon the spending category and card type. For example, Cashback SBI Card offers 5% cashback on all online spends, while HSBC Cashback credit card comes with up to 10% cashback on food delivery and other related spends.
Accelerated Rewards
Credit cardholders can earn accelerated reward points on their online purchases, which can later be redeemed either as statement balance, converted to air miles or used to buy items from the rewards catalogue. For instance, IDFC FIRST Select credit card offers accelerated rewards on all your online spends.
Co-branded Benefits
Some credit card providers offer credit cards in collaboration with popular online brands and portals using which you can avail exclusive offers, rewards, deals and discounts on all your co-branded spends. Most co-branded credit cards provide higher cashback or accelerated rewards on the associated brand, along with general earning across other spends. Some credit cards do not work on the cashback or rewards model. Instead, they give direct discount with select brands, which could help you save on your online purchases. For example, Myntra Kotak Credit Card a flat 7.5% off on your spends at Myntra, up to Rs. 750 per transaction.
Co-branded shopping credit cards may also come with brand memberships and access to loyalty programs which can further help you save on your spends.
Limited Period Offers
Online shopping is usually at peak during festive season and a number of online merchants offer generous discount on select credit cards. Using the right card, consumers can purchase items at highly discounted rates along with earning additional points or cashback, as per their card’s features. Such offers are mostly issuer-based, which means they are applicable to almost all credit cards issued by the partner banks. Those who own credit cards from multiple leading providers like SBI Card, HDFC Bank, Axis Bank and ICICI Bank can make the most of these limited period deals.
EMI Facility to Pay for Big-ticket Purchases in Instalments
Credit cards let you make large online purchases by paying their cost in small instalments over a pre-decided repayment tenure of your choice via the EMI feature. Some cards also offer no-cost EMI feature, which lets you pay for your purchase in instalments without accruing any interest. This lets the cardholders make necessary big-ticket purchases online without straining their budget.
Related Read: Equated Monthly Installment (EMI): How It Works, Formula, Examples
Sign-up Bonuses & Milestone Benefits
Credit cards come with special welcome bonuses and milestone benefits, which you can unlock based on your card spends. You can get e-gift vouchers, complimentary tickets, bonus rewards, fee waiver, etc. on joining as well as on reaching certain spending milestones. Such credit card benefits allow you to increase your savings and rewards based on your overall spends. For example, Axis Privilege Credit Card offers 12,500 reward points as welcome benefit, which is redeemable against multi-brand vouchers worth Rs. 5,000.
How to Choose the Right Credit Card?
Despite their multiple advantages, credit cards can only prove to be profitable when you choose the card that is the most suitable for you. Not every credit card will prove to be beneficial for every individual, as people have different spending habits, budgets, and needs. Some may prefer a particular brand to shop from, while others may prefer cashback over rewards benefits on their purchases.
Another point of consideration is the annual fee charged on the cards. Some may only want a lifetime free card, while others may not mind paying a high annual fee for the right set of benefits. Credit cards also come with spend-based benefits, including bonus deals and fee waivers which you can consider and compare to your spending capacity to determine whether you can maximise your returns based on your spends.
So, credit cards can help you save more on online spends if you choose a card after a thorough cost-benefit analysis depending upon whether the card features, rewards structure, annual fees, charges, and offers align with your spending patterns and needs.
Along with offering rewards and deals on shopping, credit cards also help you build your credit score and history. When managed well with timely repayments and regular use without defaulting on your payments or exceeding your credit limit, you can build a high credit score by using a credit card. A high credit score helps you to secure loans easily in the future at lower interest rates, which can be quite helpful in maintaining your financial health in the long run.
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