What are the benefits of using a credit card online?

Credit card aren’t just safe and convenient for online shopping worldwide. They also help you earn rewards

Credit cards have proved their worth over the past year as more people in the UAE have begun purchasing goods and services over the internet. This shift in consumer behaviour has led to a corresponding upsurge in digital payments as fewer people head to stores for groceries, medicines, and other necessities. Credit cards are among the easiest and convenient ways of making payments now in the UAE.

But aside from their practicality, for residents of the UAE credit cards come with a host of other benefits when used for online purchases. In many cases, paying with a credit card may even work to your advantage as compared to debit cards. Let’s take a look at some of these benefits, and how you can make the most of them with a few astute financial management strategies.

Earn rewards every time you spend

The best credit cards in the UAE today offer account holders the opportunity to earn points per dollar spend online and offline(in stores). Some cards will also rack up bonus points on categories such as groceries or food and beverage. These points are designed to work like cash, so you can redeem them for gifts, air tickets, restaurant vouchers – or even return a percentage of your spending in the form of cashback. When using cash or paying with a debit card you often don’t get any type of rewards, so keep that in mind if you want to collect points towards a goal.

Credit cards come with deals for account holders

Banks in the UAE often provide additional benefits for credit card holders. Buy-one-get-one-free movie tickets when booking in advance are common, and some banks even offer credit card holders deals on restaurant takeaway and delivery. These offers usually apply in addition to any rewards attached to card spending. For those with a large family, these deals can result in considerable savings.

Credit cards are safe and convenient

Credit cards have become the default payment method for online shopping, not just because they are so easy to use, but also because they are among the safest financial instruments around. Since the card is not directly linked to your current or savings bank account, scammers who manage to obtain your card details, the money in your bank account won’t be touched. Nevertheless, it is important to remain alert to how and where your credit card details are shared to prevent misuse.

You can track your expenses and budget

When you pay for online purchases with cash on delivery, it can be hard to remember where the money went. And although you are usually emailed a receipt for each individual purchase, you still need to account for everything manually to figure out if you’re sticking to your budget. On the other hand, when you make a purchase against a credit card online or offline (in stores), the transaction automatically shows up in your account almost immediately. This allows you to track your expenses on a periodic basis, so you have an overview of your financial situation.

Travel bookings can be made easily

Now that travel has begun to rebound, you’re probably thinking of booking hotel rooms or air tickets again. In most cases, you will need a credit card to secure a hotel room when making an online reservation – even here in the UAE. While debit cards may be accepted in some cases, this is usually not the norm, and hotels or smaller accommodation venues may ask you to pay an advance by bank transfer instead. But when travel is uncertain because of constantly changing regulations, getting a refund can be a tedious and cumbersome process. With a credit card, the process is often easier and smoother.

Credit cards can improve your credit score

In the UAE, the Al Etihad Credit Bureau assesses your monetary dealings and creates a report or score that indicates how likely you are to fulfil your financial obligations. A good credit score makes it easier to get loans and even open bank accounts in the UAE.

One of the most important factors in your credit report is how well you manage your current financial obligations. You don’t need to have a credit card for a good credit score but using your credit card carefully and responsibly can have a positive impact on your credit-worthiness.

With the combination of safety, and rewards points, credit cards carry several benefits over debit cards for online shoppers in the UAE. Using credit cards can work in your favour.

This article is part of a series of features on spending responsibly while making the most of life in the UAE. Consider sharing it online with friends and family.