21 NOVEMBER, 2022

Why Prefer A Credit Card Over A Debit Card To Pay Grocery And Utility Bills?

Credit Cards have revolutionised spending because they allow users to spend more than they can afford. Since its introduction in the 1950s, credit cards have become widely utilised. Proper credit card use can make it a highly useful financial resource. Your credit score can increase if you make consistent, on-time payments.

How to Use a Credit Card?

Using credit cards is simple. For instance, if you enter a store, you might be asked to swipe your card at the register or place it in a chip reader. You can also add your card to digital wallet applications for contactless payments in stores.

Entering your details, i.e. card number, date of expiration, and CVV security code on your card, which is usually printed on the back, is how you pay for things online.

Difference Between a Debit Card and a Credit Card

Credit cards and debit cards can make the transaction of purchasing something online simple and convenient.

With debit cards, you make purchases with the money deposited in a bank. With credit cards, you can borrow money from the card issuer up to a predetermined limit to make purchases or cash withdrawals.

Benefits of Using Credit Cards to Pay Utility Bills

Using a credit card to pay your monthly payments might be smart if done mindfully. Always make timely, full payments for your debt each month. Never use a credit card to pay for expenses you can not afford to cover. But is it good to pay bills with a credit card? With many utility bill payment offers, paying bills with a utility payment credit card is wise to get advantages and discounts. The benefits of paying your utility bills with a credit card include tracking all of your transactions in one location, getting extra cashback and reward points, keeping a reliable line of credit, and automatically paying most invoices using an auto-pay feature. The biggest benefit here is how simple it is to pay.

One can use a credit card to guarantee you have the purchasing power necessary to get the groceries one needs when one requires them. With a credit card, you can still buy what you require, even if you are strapped for cash. Additionally, in the odd chance that you do not have enough money in your bank account to pay for your supermarket buy with a debit card, you can still use a credit card to make your transaction. Your pocket will be less crowded and bulky if you use a single credit card rather than a pile of cash. Kotak bank offers the best credit card for utility bill payments and grocery.

Each Kotak card offers a unique set of rewards and bonuses. Some cards provide incredible cashback for various purchases, while others offer redeemable reward points for future Kotak Mahindra promotions.

Why Should You Prefer a Credit Card Over a Debit Card?

Utility bill and grocery bill payment methods have undergone a significant transformation due to credit cards. People have transitioned from using cash to make purchases and withdraw notes to using plastic money for nearly everything. A few factors that make using a credit card more appealing than debit cards are:

  • One-Time Bonus

When you plan to get a new credit card, the chance to receive a welcome bonus is unparalleled. Credit cards tempt prospective consumers to apply by offering bonus points that can be traded for travel, gift cards, merchandise, and bill credits.

  • Cash Back

Cashback is a perk that reimburses a portion of the purchase price to the cardholder's account. Cashback rewards are real money deposited into a bank account or applied to a bill. Credit cards offer more cashback than debit cards..

  • Miles for frequent flyers

Today, major credit card issuers offer at least one credit card through partnerships with all domestic and international airlines.

Cardholders generally accrue miles at a rate of one mile for every dollar spent on net purchases or occasionally one mile for every two dollars for lower-end cards with no annual fee. Depending on the kind of airline ticket you buy with your points or miles, you can determine how useful this incentive is in reality.

  • Safety

In the case of a credit card, there is a certain limit that is set up to which you can make payment. However, in the case of debit cards, there is no such limit.

However, in the case of debit cards, there is no such limit. Therefore, the maximum loss in case of credit card theft can be up to the limit set by the issuing bank.

  • Grace Period

Your funds are immediately spent when you make a debit card purchase. Saving money for this extended time might be useful in two different ways.

The first is that you will save money because money, however little, has a time value. Your purchase is slightly cheaper than it would be if you had postponed making the final payment.

  • Universal Acknowledgement

Making some purchases with a debit card might be challenging. Hotels and automobile rental agencies prefer credit card payments because they make it simpler to charge customers for any damage they could cause to a place or a vehicle.

Another issue is that the merchant is unaware of the total cost of your item unless you have paid in advance for your overnight stay.

  • Easy Tracking

The monthly credit card statements make it straightforward to track your spending on groceries by showing you exactly how much you have spent and where.

Keeping a note of the amount you spend on groceries can be difficult unless you are meticulous and regular with saving receipts and tracking expenses. Most credit cards include online access, allowing you to keep tabs on your most recent purchases.

  • Building Credit Score

Buying groceries with cash or a debit card does not help you build credit; it just increases the amount of food in your pantry. But you also develop a good payment history when you use a credit card to pay for groceries and consistently make on-time payments to the credit card company. It can help you raise your credit score and make you more appealing to other possible lenders.

Bottom Line

Thus we have seen that using a credit card over a debit card has several advantages in reward points, bonus points, cashback, and safety. So, we should use credit cards to make grocery and utility bills.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. 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 Kotak. Kotak, 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.

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.