Free Credit Card Benefits and Risks: What You Need to Know

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You may be charged a joining or annual fee when you get a credit card. However, some financial institutions offer credit cards without these charges. Such cards are known as lifetime-free credit cards.

Free credit cards have many advantages similar to regular cards, such as helping you build a credit history, offering cashback incentives, etc. However, if you don’t use them responsibly, they can also negatively impact your credit score.

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Pros of Using Lifetime-free Credit Cards

Here are some exciting benefits you get to enjoy when you use these cards:

Building Credit History

Free credit cards offer no annual fees and up to 60 days of interest-free periods. However, the grace period varies from one issuer to another. When used responsibly, they can help you build a good credit history, enjoy better interest rates on loans and get quick approval on credit card applications.

Rewards and Cashback

Some credit cards offer cashback on every purchase and provide additional benefits, such as insurance and travel perks. While they help you earn rewards on your regular spends, some also offer sign-up bonuses when you meet specific spending limits.

Line of Credit

A lifetime-free card also offers instant access to funds, helping you manage unexpected financial emergencies. You can enjoy these benefits without thinking about annual fees.

Cons of Using Lifetime-free Credit Cards

While these cards offer exclusive benefits, they have certain drawbacks as well. Here are some disadvantages of using these cards:

Chargeable Upgrades

Some issuers may offer this benefit of free access only for a specific timeline, mainly to attract customers. In such cases, you may have to pay a fee after the offer ends. The best option is to review the terms and conditions before you apply for a card.

Changing Terms

If you’ve had a credit card for a few years, you may have noticed that the card’s benefits change over time. This happens because people’s needs and spending habits change. Banks adjust their benefits to avoid losses as more people make online transactions. So, there are chances that issuers may start levying charges on these cards.

Discontinuation

Credit cards expire for a reason, and issuers usually discontinue them after a period of 3 to 5 years. It becomes difficult in such instances, as you may lose out on benefits and other pending offers.

Impact on Credit Score

Using a credit card irresponsibly can affect your credit score, even if you use a lifetime-free credit card. Some mistakes that can hurt your credit score include:

Paying your bill late
Not paying your bill at all
Using too much of your available credit

Credit cards provide simplicity in the digital world and are critical for transitioning to a cashless society. The One Credit Card, one of India’s best rewards credit cards, is notable for its versatility in online and in-store transactions.

To avoid unmanageable debt, keep track of your credit cards and manage them responsibly. The One Credit Card mobile app helps you track your finances effortlessly and pay your EMIs on time. Apply now and avail yourself of this free credit card to achieve your financial goals.