Why Is a Credit Card Better for Online Shopping? - Kotak Bank
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31 MAY, 2022

Most of us use credit cards to maintain our cash flow and meet emergency financial needs. Credit cards are essential when it comes to shopping. Gone are the days when only online shopping could be done via a credit card. At present, many merchants have started accepting credit cards at physical stores. The best credit card in the market will offer several benefits to regular shoppers.


Read to know why a credit card is perfect for online shopping.


How to use a credit card for online shopping?


It is easy to find the online payment option with a credit card on digital marketplaces. After selecting the product, enter the credit card details on the payment gateway. The user will most likely receive an OTP on the registered mobile number to complete payment via the credit card. Once the OTP is entered, the online payment is processed from the credit card. The amount for any product is deducted from the available credit limit. If a user does not have a sufficient credit limit, online payment will be declined. The amount deducted from the credit card will be delivered to the respective merchant. Also, the online order will be confirmed after the credit card payment is processed. The user will also receive a message on the registered mobile number regarding the order confirmation and online payment. Users can complete the online shopping via their credit card by following the simple process.


Pros of using a credit card for shopping in 2022


There are numerous benefits of shopping via a credit card. For example, almost all online shopping websites allow customers to pay via credit cards. It is because more and more people now prefer a credit card for online shopping. Some advantages of using a credit card for shopping are as follows:


Get rewards, loyalty points, and many other benefits


Whenever someone completes an online payment via their credit card, they are most likely to receive a benefit. For example, a credit card may offer cashback for shopping more than INR 1,000. A cashback is a small amount returned to the user after online payment. While the cashback amount may not be substantial for a single online payment, it is worth remembering – every penny saved is a penny earned. Additionally, when the total cashback after multiple payments, the return may become a significant amount.


Some credit cards offer loyalty points to users for online shopping. The credit card issuer provides loyalty points to customers making online payments regularly. Consider loyalty points as a bonus for trusting the same credit card issuer or bank. With the help of loyalty points, users get a discount on their next online order. In addition, many credit cards offer additional benefits to users for making online payments. For example, there are credit cards that offer lounge access, air miles, and other such benefits.

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Many users specifically apply for a cashback credit card for online shopping. A cashback credit card will guarantee some cashback for every online payment as other mode of payments do not get this advantage. Storekeepers will not offer cashback to shoppers for making payments in cash. Debit cards also do not provide so many benefits to users for making online payments. Some credit cards offer 1x or 2x rewards on online shopping. Credit card payment offers may change from one card to another. Make it a habit - check for the online shopping benefits before applying for a new credit card.


Enjoy a better credit score and history


When a user pays for an item using their credit card, the amount gets deducted from the credit card limit. Even if the user has no money, a credit card enables them to browse and shop online. Once the payment is made to the one retailer, it is followed by payment to the credit card company as per the deadline. Inability to repay as per the deadline will lead to a penalty, which can increase the financial burden of the user. When someone keeps repaying their credit card bill timely, the credit score increases. Along with shopping, users will also boost their credit score and build a healthy credit history.


There is no boost in the credit score when shopping at physical stores with cash. When you pay in cash, your credit history is uninterrupted. However, making several purchases in a month with a credit card and paying the outstanding amount on time positively impacts the credit score. Over time, such users can possess a healthy credit score and a larger credit limit. A larger credit limit can be used for meeting any urgent financial obligation.


Benefit from EMIs


Consider someone who has to buy an expensive item via their credit card. The user can easily purchase a costly item using the  credit card and repay the amount through pocket-friendly EMIs. Most merchants offer EMI facilities only on for credit card . In contrast, debit cards cannot provide such advantages to users.


Maintain security


Credit card users have leverage against fraud or unauthorised usage. Even if the credit card details are stolen, the thief cannot make an online purchase. It is because most credit card issuers use two-step authentication to prevent unauthorised usage. Also, if a credit card is stolen, other activity on the card can be prevented by informing the credit card issuer. For online payment, the CVV on the credit card is required along with an OTP received on the registered mobile number. All this will protect fraudulent transactions on a credit card.


International shopping


One of the biggest advantages of using a credit card is that it enables users to shop at international stores with no limitations. Many credit card issues enable payment processing allowing users to order the latest fashion, book tickets, and even order electronic equipment online.


There are many benefits a user avails when they apply for a shopping credit card. Apply for a credit card now at Kotak to get excellent credit card payment offers.

Also Read: Best Laptop Brands in India (2024) at No Cost EMI

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.