Why Should You Use A Credit Card In 2021? 5 Reasons


2020 will be etched in the humankind forever. One strain of virus has affected a million lives, and more so, thousand other ways of living. Even though vaccine for the virus has been introduced in certain countries, it’s going to take a good deal of time to immunize 7 billion bodies. 

Alien concepts like social distancing and 20-second hand washes have banned social dinners, festival get-togethers, and in-person shopping for all. The pandemic has forced organizations to shut down businesses, leading to merciless furloughs and unforgiving pay-cuts. 

However, the show must go on. 

The lockdown forced families to use digital mediums for placing everyday orders. What started as a rule eventually progressed into an everyday habit. This move led to a good jump on the chart of people using credit card services in India. We believe this trend to carry forward in 2021. 

As we reflect at the new norms defined by 2020, here’s presenting 5 reasons why you should opt for a credit card to ring in the new year. 

1. Go Contactless, Be Safe 

Before the pandemic, we didn’t think twice before touching anything and everything around us. However, with no cure and set course of treatment diagnosed in the first 10 months, people found themselves trapped in the virus-fear web. Cash entails multiple risks of infection and questions people’s hygiene practices. 

Plus, the strict lockdown enforcements added pandemic stress for all. With no means and will to use cash in this period, credit cards enjoyed their monopoly in the market. 

With the view to fight the virus, banks like SBI are actively promoting Contactless Campaigns. But the question is: How can you use such credit cards?

To complete a purchase, the user is required to tap the SBI credit card on the machine. This move avoids the need to swipe or let a merchant’s foreign hand touch the card (and increase the possibility of transmission). 

Fast forward to the present day, and credit card demand has skyrocketed. A CRIF CrediScape Report (May 2020) projects around 1 million cards to be sourced in the next 5-6 quarters. 

Covid-19 isn’t ending anytime soon. People’s awareness about the virus and the cautiousness to avoid getting sick has exponentially risen. Therefore, it’s just a matter of time when the world will witness the present dwindling cash dependency turn into zero dependencies, globally. 

2. Good Scope of Convenience

The COVID-19 pandemic has imposed multiple bankruptcies and has reduced purchasing powers. Because the fear of robbery has risen, people aren’t willing to carry their credit cards in physical wallets. 

Services like Apple Pay and Samsung Pay support e-wallets, where users can make purchases with their e-credit-cards. These services work by scanning QR Codes, thereby reducing physical contact, facilitating a better shopping convenience, and supporting increased user protection. 

A study by Mastercard global transaction data and consumer research reveals a 15x growth in contactless transactions in India. Given these trends, The Reserve Bank of India (RBI) has allowed the tap-and-go functionality in retail and shopping centres’ credit card bill payments for all purchases starting at minimum Rs 2000. 

3. New Rewards Categories of Everyday Purchases

With reduced purchasing powers influencing consumer behaviour, premium businesses are struggling to stay afloat in deep waters. For brands to churn break-evens and profits, it’s imperative to address the present pain-points and come up with irresistible offers. 

The movement has begun. Banks such as SBI, ICICI, and HDFC have introduced worldwide-accepting credit cards that offer 10x reward points on everyday spending like grocery shopping and dining outlets. 

People love incentives, and these institutions have hit the right spot. With rewards applicable on as low as Rs 100/purchase, these cards have worked their charm in the Indian market. 

4. Relieves Financial Stress and Anxiety 

These tough times have cancelled many plans and wishes. However, it’s not possible to keep deferring one’s needs. Fulfilling needs necessitates financial investments, leading to monetary stress and anxiety. 

The key to breaking this vicious cycle starts and ends at credit cards. With companies offering 0% interest rates in these tough times and gracious buffer periods to make payments, this era serves as a great opportunity to opt and use a credit card’s incentives. 

Moreover, the use of these cards allows the user to make informed financial decisions and gifts enough time to arrange finances. This eases mental pressure, leading to a greater volume of online transactions. 

5. Possibility of Increased Travel Bonuses and Other Interesting Incentives

While the international borders have opened their countries for foreign national’s visits, the walls of apprehension stand strong amongst people’s minds. Given people’s frustration of living inside closed doors for a year, experts predict a strong possibility for travel to resume in a good swing by late 2021. 

Brands are gearing up for this movement. Given the situation, the market speculates creative campaigns like generous mile-offers from brand collaborations between airlines and hotels. Moreover, this is a great time to leverage on sign-up bonuses. With premium businesses taking cuts to drive their revenue, these deals will create a once in a lifetime offer for the creditworthy class. 

Moving ahead, there are many corporations still practising the work-from-home policy. This norm is expected to continue until 2021’s first quarter at least. Given these changes, some analysts speculate the replacement of gas and transit bonuses with the likes of the internet and the cable.  

Final Words 

While the last few months have posed unprecedented challenges for all, it has motivated many to learn how to use credit cards, thereby radically transforming the world into a new way of living. 

The digital space is expanding exponentially. It’s ideal to expect the big business players to dominate the online space. However, with changing times, we’re seeing a surge in the number of registrations of local retailers and small businesses on online business platforms. With these transformations, it’s easy to conclude the sole monopoly of credit cards in 2021. 

To sum up, credit cards in 2021 will help: 

  • Avoid physical contact with unknown hands
  • Practice better financial planning
  • Facilitate convenience with contactless payments
  • Leverage generous rewards from top brands
  • Avoid hefty interests with 0% interest rates
  • Take advantage of new rewards in everyday categories

about CRED

CRED is a members-only platform that rewards the creditworthy individuals of India with exclusive experiences, rewards and upgrades.