Should You Get a Credit Card? Weighing the Pros and Cons

Have you ever wondered if you should get a credit card? Credit cards offer some nice perks, like rewards points and fraud protection. But they also come with risks, like high interest rates.

So how do you decide if a credit card is right for you? Here, we’ll walk through the pros and cons so you can make an informed decision.

What Is a Credit Card?

First, let’s cover the basics. A credit card is a payment card that allows you to borrow money from the card issuer. You can use your credit card to make purchases, and then you’ll pay back the money you borrowed plus any interest or fees.

Credit cards differ from debit cards in an important way. With debit cards, purchases are deducted directly from your checking account. Credit cards let you borrow money that you’ll have to pay back later.

Cash and credit cards also work differently. Cash is a one-time payment. With a credit card, you can carry a balance from month to month, essentially taking out a loan from the card issuer.

Now that we’ve got that covered, let’s look at why someone might want to get a credit card in the first place.

The Pros of Credit Cards

Here are some of the biggest advantages of using a credit card responsibly:

Rewards and Cash Back

One of the best perks of credit cards is the ability to earn rewards like cash back, points, or miles. Many cards offer 1-5% cash back on purchases. With rewards cards, every dollar you spend gets you closer to free flights, hotel stays, gift cards, and more.

I put nearly all my monthly spending on rewards cards. Last year, I earned over $800 in cash back with very little effort. As long as you pay your bill on time and in full, rewards cards are an easy way to get something for nothing!

Fraud Protection

Credit cards also offer stronger fraud protection than debit cards or cash. Under federal law, you’re only liable for $50 of unauthorized credit card charges. And most card issuers waive this fee.

So if someone gets ahold of your credit card number, you can simply report the charges as fraudulent. The card company will refund the charges, and you won’t be held responsible.

With a debit card, you could be liable for up to $500 of unauthorized charges. And if someone steals your cash, it’s gone for good. So credit cards give you an extra layer of protection against fraud.

Building Your Credit

Here’s another big benefit of credit cards: they can help build your credit score. Your credit score is a number that tells lenders how reliably you pay back borrowed money.

The easiest way to build credit is by using a credit card responsibly. Make sure to pay your bill on time and in full each month. When you show a pattern of on-time payments, your score will start to climb.

A higher credit score makes it easier to get approved for loans, rent an apartment, get lower interest rates, and more. So credit cards can be a useful tool for establishing good credit.


Carrying a credit card is often more convenient than cash. You don’t have to stop at the ATM as often. Cards are widely accepted both in stores and online. And you can make returns and exchanges more seamlessly with a card versus cash.

Plus, credit cards offer benefits like rental car insurance, extended warranties, and purchase protection. So they provide greater convenience and perks than other payment methods.

Record Keeping

Finally, credit cards can help with record keeping. Your monthly statement shows all your purchases in one place. This can make it easier to track where your money is going and stay on budget.

Statements also come in handy at tax time. The records can help you take applicable deductions and maximize your refund.

The Cons of Credit Cards

Of course, credit cards have some downsides too. Here are the biggest risks to watch out for:

High Interest Rates

The main pitfall of credit cards is high interest rates, usually 15-25%. If you routinely carry a balance, interest can quickly add up and become expensive.

For example, a 1,000 balance at 20% interest would cost you 200 a year. And that’s on top of having to pay back the original $1,000!

The takeaway here is that credit cards make borrowing very easy. So only charge what you can realistically pay off each month. The interest can erase any rewards you earn if you carry a balance.

It’s Easy to Overspend

Studies show people spend 12-18% more when using credit instead of cash. With a seemingly endless spending limit, it’s easier to overspend without thinking.

Say you’re shopping online and put a $400 purchase on a card. That might give you pause if it were coming straight from your checking account. But with a credit card, it feels less painful since you don't have to pay right away. This can lead to overspending without realizing it.

It takes extra diligence to avoid overspending with credit cards. Set a budget for each category and stick to it. And review statements regularly to make sure your spending aligns with your actual financial situation.

Risk of Fraud

While credit cards offer strong fraud protection, the risk isn’t zero. Sophisticated hackers can still gain access to card information and make fraudulent charges.

Make sure to monitor account activity frequently. Report any unknown transactions right away. Also be cautious when entering card details online to avoid your information getting into the wrong hands.

Following basic security practices can help minimize your risk of credit card fraud. But it's still possible, so vigilance is key.

Tips for Using a Credit Card Responsibly

If you do decide to get a credit card, using it responsibly is crucial. Here are some tips:

  • Pay the balance in full each month - This avoids interest charges which can negate any rewards you earn.

  • Create a budget - Decide how much to allocate to each spending category. This helps avoid overspending.

  • Review statements regularly - Check for errors, fraudulent charges, or overspending. It's easier to resolve issues when caught early.

  • Set up autopay - This automates payments so you never miss the due date and hurt your credit score.

  • Report unauthorized charges quickly - Notify your card issuer of any fraudulent transactions right away.

Following these practices will help you maximize the benefits of credit cards while minimizing the risks.

Finding the Right Card for You

If you want to enjoy rewards and other credit card perks, make sure to choose one that fits your spending habits. Here are some popular types of credit cards:

  • Cashback cards - Earn a percentage back on everyday purchases. Great for groceries, gas, dining out, etc.

  • Travel rewards cards - Rack up points or miles for free flights and hotel stays. Perfect for frequent travelers.

  • Business cards - Offer benefits tailored to small business owners like insurance and employee cards.

  • Student cards - Help students build credit with responsible use. Often have lower credit limits.

  • Secured cards - Require a refundable security deposit for those with poor/no credit history.

Compare cards in your chosen category to find the best rewards rate and benefits. And opt for no annual fee cards unless the perks justify the cost.

The Bottom Line

So should you get a credit card? Here's the bottom line:

Used properly, credit cards offer valuable benefits like rewards, fraud protection, and credit building. But they also pose risks like interest, overspending, and fraud vulnerability if mismanaged.

Weigh your personal habits and financial discipline. If you stay organized and make payments on time, a credit card can be a useful tool. But if you struggle with debt or overspending, the risks likely outweigh the rewards.

Think carefully about your situation and research card options thoroughly before applying. Used wisely, credit cards can enhance your finances. But be cautious, as the consequences of irresponsible use can be costly.