Is Getting a Credit Card Worth It?
Credit cards are one of those things in life that we often take for granted. As kids, we see so many people using them that eventually, they just seem like another part of growing up. If you’re one of these people, it may surprise you to hear that a lot of people around the world today don’t actually own credit cards, while many others tend to see them as a liability. But how can this be? We’re normally told that credit cards are a convenient and hassle-free way of spending money, so why do some people avoid using them? Well, to answer that question, we’ll need to start at the basics and ask ourselves – What exactly is a credit card? How does it work? Is Getting a Credit Card Worth It?
A credit card is a type of payment card which allows you to make purchases using credit from the bank. In other words, instead of going to the bank and applying for a loan every time you want to make a small purchase, you can just swipe your credit card and buy the item using your available credit.
The money used for this purchase can then be repaid at a later date. Credit cards can also be used to make online purchases.

How does a Credit Card Work? – Simplified
The simplest way to think of a credit card is as a type of IOU from the bank. When you want to buy something but don’t have the money to pay for it, you can use your credit card as a stand-in for actual cash.
In effect, the bank is paying for your purchase right now, because it believes that you will pay back the money at a later date (perhaps with some interest).
Credit cards usually have a set credit limit, so you can’t just go out and spend an infinite amount of money by using one. Your specific credit limit will be based on multiple factors such as –
- Your Level of Income
- How Much Debt You Have
- How Much of Your Credit Youre Using
- Other Factors such as the Economy
Each time you use your credit card, your total amount of available credit decreases. You are then given a certain grace period during which time you are expected to pay back the money that you owe. If you repay your debts during this period, you normally won’t be charged interest. On the other hand, if you have not paid back the money on time, you will begin to accrue interest on the amount owed.
Credit Cards – Pros and Cons
As you can see, there are drawbacks that come with the convenience of a credit card. But things don’t end there. There are a few other factors that need to be considered before you start spending –
Advantages of Credit Cards
Money when you need it – There are times when you desperately need to make a purchase, but you just don’t have the money on you. A credit card can give you the break you need by covering the costs and allowing you to pay back the necessary amount later. |
Rewards – Nowadays, a lot of banks offer various rewards for credit card use. If you spend enough credit, you may receive cashback, special points, aeroplane miles, etc. |
Convenience – One little credit card can have the same purchasing power as a briefcase full of money. This aspect allows you to go out shopping without having to physically carry all your money around with you. Additionally, when you run out of cash, you can simply swipe your card rather than frantically search for an ATM. |
Credit Score – When it comes time to make a really big purchase such as a house, you’re probably going to need a loan from the bank. This loan will only be possible if the bank sees you as a reliable investment capable of paying back what you owe. The only way they’ll know this is if you have some kind of credit history for them to go off of. Thus, a long and up-to-date credit history will go a long way towards improving your credit score. |
Sounds great, right? Well, it’s not that simple. There are also a whole lot of problems that can arise when you start using credit cards –
Disadvantages of Credit Cards
Interest – As noted, the banks won’t just let you pay back the money when you feel like it. There’s always a countdown hanging over your head after you’ve used your credit card and you’ll need to pay back the money on time if you want to get rid of it. This may sound easy enough, but debt can spiral out of hand quickly and a few bad purchases on your credit card can end up having dire consequences. Additionally, these interest rates can be much higher than those you’d find on other loans which adds to the potential for financial ruin. |
Overspending – When all you’ve got is physical money in your pocket, it’s kind of hard to go over your limit. When you’ve used all your available cash, there’s nothing left to do but go home. By contrast, credit cards allow you to keep spending money even when there’s none left. This can cause huge issues for people who lack self-control or others who are going through a really difficult period of financial instability. |
Credit Score – Wait a minute, didn’t I just say that credit cards can improve your credit score? Well, they can, if you use them correctly, but constantly spending up to your credit limit or failing to pay back your debts on time can also hurt your credit score. These factors will make investors less likely to give you loans as they feel like you’re less financially reliable. |
Now that we’ve run through the basics, we can get back to our original question.

Is a Credit Card Worth Getting?
As noted, there are benefits and drawbacks when it comes to owning a credit card. You’ll have to consider your own financial situation and your ability to make payments on time if you want to figure this one out.
Do you want the convenience of a credit card? And are you able to control your own spending? Then maybe getting one is the right move for you.
But are you worried about potential debt spirals? And do you wonder if you’ll be able to make payments before they’re due? Then maybe you should avoid getting a credit card and just use cash and a debit card instead.
What’s the Difference Between a Credit Card and a Debit Card?
There are a lot of major (and minor) differences between credit and debit cards but the main thing that you need to remember is this –
When you use your credit card, you aren’t actually spending your own money. You are essentially using the bank’s money and agreeing to pay it back later. By contrast, debit cards are specifically linked to the money in your bank account. When you make a purchase using your debit card, you don’t have to worry about paying it back later since you’re spending your own money.
How can I Manage my Credit Card?
When you have a credit card, it can be difficult to simply ‘‘stop spending money’’.
The necessities in life can pile up and you may even be hit with a few disasters that require emergency purchases. Regardless of the reasons, many of us can quickly end up with uncontrollable debt on our credit cards.
So how do you fix this? And how do you prevent it from happening in the first place?
- Make Payments on Time – It might be tempting to leave some card payments unsettled until you’re in a more financially stable position. Unfortunately, this kind of behaviour can have dire consequences. High-interest rates can creep up on you and your credit score can take a hit, so make sure that you keep up-to-date with all your payments.
- Pay your Debts ASAP – Most banks require a minimum payment towards your debts each month. If you end off a month with money in your pocket, consider paying more than this bare minimum. You’ll reduce the amount you’re paying in interest and you’ll get rid of your debts that much sooner.
- Start Budgeting – Cut out any frivolous spending from your life and figure out when and where you can save money. Create a detailed budget each month and remember to follow it religiously.

What Does it Mean to Have a Good Credit Score?
Having a good credit score means that you are seen as more reliable in the eyes of lenders.
Banks don’t stay afloat for very long if they hand out loans to people who aren’t able to pay them back. For this reason, lenders try to ensure that the people they’re loaning money to, will be able to pay it back on time and with interest.
The metric used to determine this loan worthiness is known as credit score. The higher your credit score is, the more you’re seen as a safe investment for lenders. This means that people with a high credit score can expect to receive loans easily and with favourable interest rates while those with low credit scores are going to have a hard time finding a loan and an even harder time finding a reasonable interest rate for that loan.
In Conclusion – Is Getting a Credit Card Worth It?
Credit cards allow you to make purchases using the lender’s credit and then pay back the money you owe at a later date. In other words, when you run out of money to spend, your credit card allows you to purchase things with the bank’s money and then pay it back later. This can be a very useful tool in the right hands, but it can also be used carelessly and can result in frivolous purchases and uncontrollable debt.
Credit cards may be a worthwhile item to have if you’re good with money and you manage to pay back everything you owe on time. However, impulse buyers and people who struggle to make payments when they’re due might want to avoid credit cards and the added stress that they can cause.
By contrast, debit cards are linked with the actual money in your bank account and don’t result in any debt. You can only swipe your debit card so long as you have money to spend which means that there is nothing to repay at the end of the month.
If you’re struggling with credit card debt, it may be a good idea to begin budgeting correctly while ensuring that your debts are paid off ASAP. It is also important that you do not miss any payments going forward as this can lead to increased costs and a deteriorating credit score.
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