Why get a credit card? - Here are 5 reasons
Are you wondering “should I get a credit card?” or “is it worth getting a credit card?”, if so, you might have started to think about some of the benefits and reasons for using a credit card.
Oftentimes, many people associate the idea of getting a credit card with being in debt and relying on credit to help you pay for things when you can’t afford to pay for them yourself. While this can sometimes be the reason why people get a credit card, it can also have many other advantages, even if you’re not actually in need of a credit card to pay for things.
In our article about reasons to get a credit card, we’ll take you through all the pros and cons of getting one, how you can benefit from borrowing money, as well as whether it’s actually worth it.
Is it worth getting a credit card?
The reason(s) why you want to get a credit card will depend on whether it’s worth it for you and your personal situation, but more often than not, it can be very beneficial for almost everyone to have a credit card.
Providing that you’re spending responsibly on your credit card and you’re not getting yourself into debt, then having a credit card can be beneficial for many reasons.
Read more: Tips for managing credit card debt
5 reasons why you should get a credit card
There are many benefits of getting a credit card; you can find some of the top advantages and why you should get one below.
1. You can earn cashback and other rewards and discounts
One advantage of getting a credit card is that you can earn cash back and other types of discounts and rewards with some types of reward credit cards.
If you were going to make a purchase for something anyway, then you might want to consider getting a specific rewards credit card in which you can collect points for spending on your card that can then be exchanged for shopping vouchers or discounts across various retailers.
One of the most common types of cashback and rewards credit cards is an airline credit card that allows you to earn air miles every time you fly with a specific airline that can then be used to pay towards future flights.
2. You can benefit from credit card protection
Credit card purchases between £100 and £30,000 come under Section 75 of the Consumer Credit Act.
This means that if something goes wrong with a purchase online, your credit card provider will take on the same responsibility as the retailer and they will be responsible for ensuring that you receive a refund for the good or service.
Learn more: Credit card protection explained
3. It can be cheaper when spending abroad
If you spend a lot of time on holiday or travelling abroad for work, you could soon see large fees racking up if you use your regular credit card abroad as you’ll often be charged high rates to withdraw money from a cash machine, or for simply just spending money using your normal credit card when in another country.
You might want to consider getting a travel credit card that offers little to no fees when you spend abroad and you’ll also benefit from better exchange rates so you’ll get more for your money.
4. A credit card can help to improve your credit score and credit rating
Another common reason for getting a credit card is to try and improve your credit score or to build your credit history.
In order to get a mortgage, apply for a loan or get a car on finance, you will need to have a good credit score, and one of the best and most effective ways of building your credit score is to get a credit builder credit card.
Credit builder credit cards can help to build your credit score as long as you make the repayments each month and never make a missed or late payment (this will have the opposite effect and negatively impact your credit score).
You might like: What factors can negatively affect your credit score?
5. It can help you to pay for big purchases
If you’re planning on making a big purchase such as paying for a wedding or a holiday, then you might want to consider getting a 0% purchase credit card that allows you to spread the cost of the payment with no added interest, providing that you pay the amount off within the 0% introductory period.
You’ll also benefit from credit card purchase protection by doing this, so if you’re making a big purchase that you’re worried about being protected, using a credit card can help to protect your purchase in the event that something goes wrong.
Is it good to have a credit card and not use it?
If you want to boost your credit rating, you'll actually need to use your credit card to make purchases. In fact, if you close your credit card if it’s inactive, you could end up hurting your credit score, so it’s usually best to leave it open and try to use it little and often (you could use it for essential spending on things like food or petrol, for example).
However, it’s important to be aware that some credit card providers will cancel your credit card and close your account if your credit card has been inactive for too long. Therefore, even if you don’t really want to use it for anything other than building your credit score, it might still be a good idea to make little purchases on it each month and pay them off every month so that your card stays active.
However, you should never use your credit card if you’re not able to make the repayments or if you tend to spend more than your credit card limit. This could result in you getting yourself into credit card debt, which in turn could affect your credit score and your future ability to borrow money.