If you’re asking yourself whether you should get a credit card, the chances are you’re looking for your first credit card. But whether it’s your first card or you’re thinking about opening an additional line of credit, here’s what to consider when you’re weighing up the pros and cons of applying for a credit card.
Pros of getting a credit card
Let’s start with the upsides to owning a credit card – because there are a few of them!
A balance transfer can help reduce interest payments
There are many types of credit cards out there. By performing a balance transfer, you can reduce interest payments, which can lower the cost of borrowing.
It helps you manage your money
Paying off your credit card balance each month teaches you how to budget. You’ll learn how to manage money by setting aside a portion of your income each month to pay your bill.
It helps you prepare for emergencies
Although it’s great to have an emergency cash fund, some people find it helpful to have a credit card available too. For example, a credit card might help you pay an unexpected bill if you’re short of cash ahead of payday.
It helps to build a healthy credit rating
If you use a credit card responsibly and always pay your bills on time, then a credit card can actually help you build your credit score in the long term. And if you don’t have much credit history yet, you can build up your rating with a credit card.
When is it a bad idea to get a credit card?
Although credit cards have their upsides, there are times when they might be best avoided. Here’s when you might want to hold off applying for a card.
- You’re struggling to pay your existing bills. Adding another bill to the mix could push your finances to the edge.
- There’s a good chance you might overspend. Although credit cards can teach you how to manage money, if you’re really worried about your spending habits, you might want to learn more about budgeting before applying for a card.
- You’re unsure how credit cards work. Applying for a credit card is a big financial decision, so spend time learning how credit cards work before applying.
Should I get a credit card if I already have a debit card?
If it makes sense for your finances, sure!
Credit cards and debit cards are totally separate products. Debit cards allow you to pay for things with your bank account, whereas credit cards let you buy things on credit up to a pre-agreed amount.
So, depending on your circumstances, you might want (at least) one of each type of card. See our guide on how to choose a credit card for more information.
If I already have a credit card, should I get another one?
Sadly, no one can answer this question for you – it all comes down to your personal circumstances. However, here are some points worth considering:
- Missing a credit card payment could damage your credit score. So, make sure you can afford the monthly repayments before applying for another card.
- Applying for a credit card can lower your credit score in the short term, so bear this in mind if you think you’ll need another line of credit soon (e.g. car finance or a mortgage).
- Do you have a low credit score? Although you can get credit cards for bad credit, it might be worth building your credit rating first.
Weigh up the pros and cons carefully before applying for a new credit card.
How do I pick the right credit card for me?
If you think a credit card is right for you, then here are two key points to bear in mind when you’re shopping for a new credit card:
- Different credit cards come with different pros and cons. Consider why you want a credit card before you apply – this will help you determine which card you might apply for.
- Your credit score affects which cards you can apply for and how much interest you might pay. So, browse different cards to help ensure you find the best match for your needs.
Our list of rewards credit cards is a great place to start looking for the right credit card for you.