Should You Get a Credit Card?

Paying with credit is easy and convenient, if you're careful.

A man reaches across a restaurant table to pay with his credit card -- so easy, convenient, and dangerous.

AleksandarGeorgiev / Getty Images

If you don’t yet have a credit card, it’s natural to wonder whether to get one. While some people might recommend sticking with a cash-only lifestyle to avoid going into debt, credit cards have lots of benefits if you use them responsibly.  

Start with these considerations, then weigh the pros and cons of getting a credit card to decide if it’s right for you.

Confirm You Meet the Minimum Requirements

You must be at least 21 years old, or at least 18 if you have your own verifiable income, to qualify for a credit card

Without income, you could apply for an account with a co-signer—which only a handful of credit card companies allow—or become an authorized user on another person’s account. But in both cases, the other user’s credit could suffer if you make purchases you can’t repay. Make sure they understand the risks of co-signing or adding you as an authorized user before moving forward.

Decide if You’re Willing to Pay a Deposit

If you have little or no credit history, one way to start your credit journey is with a secured credit card. You’ll put down a cash deposit, which will also serve as your credit line—a $300 deposit, for example, will give you a $300 credit limit. This protects the credit card issuer in case you don’t pay your bill: The company will use your deposit to cover the amount you can’t pay. 

Over time, with positive payment history, you may be able to transition to a traditional unsecured credit card and get your deposit back.

Make Sure You’re Prepared for the Responsibility

While you may qualify for a credit card, that doesn’t mean you’re ready for one. It’s important to do some soul-searching and consider how likely you are to keep your balance low and make payments on time. Your goal should be to pay your bill in full each month to avoid racking up interest charges. 

Ideally, before getting a credit card, you’ll have regularly paid monthly bills on time and managed a debit card without overdrawing your account. You should also have some experience keeping to a budget so you’re comfortable staying well below your credit limit. 

Pros & Cons of Credit Cards

Now you can make the big decision: Should you get a credit card? Here are the top benefits and drawbacks of credit cards.

  • You’ll build credit history

  • You’ll be shielded from fraud liability

  • You don’t have to carry cash when traveling

  • You could earn cash back or travel rewards

  • You may be tempted to overspend

  • You could feel more overwhelmed by bills

  • You may not be ready for plastic

Pros Explained

There’s no question a credit card can brighten your financial future, save you money, and make everyday life a little more convenient.

You’ll Build Credit History

You must establish a strong credit track record in order to access other lending products you might need in the future, such as a mortgage or auto loan. You’ll get better terms once you have a strong credit record, too. One simple way to begin building a credit history is by opening a credit card, using it sparingly—say, to pay for a monthly subscription service or for gas—and paying the bill in full each month. You’ll then be able to show lenders that you can responsibly manage money and make payments on time.

You’ll Be Shielded From Fraud Liability 

With data breaches frequently in the headlines, it’s important to protect your identity and financial accounts, especially when shopping online. If your account information is stolen, credit cards come with less fraud liability and risk than debit cards. Most credit cards have policies that state you won’t be on the hook for a single dollar if fraudulent transactions are made. By law, you’re liable for no more than $50 worth of transactions that occur before reporting the fraud. 

Debit cards work differently. Depending on when you report the fraud, you could be liable for as much as the entire amount that was stolen. Plus, while the investigation takes place, your checking account funds won’t be available to you.

You Don’t Have to Carry Cash When Traveling

Credit cards are more convenient and safer than carrying a lot of cash in your wallet when traveling or making a big purchase. Some credit cards don’t charge foreign transaction fees, which means instead of taking out cash from fee-laden ATMs or exchanging cash at unfavorable rates, you can use your card to make purchases when traveling abroad.

You Could Earn Cash Back or Travel Rewards

Perhaps the best perk of having a credit card is the ability to earn rewards for the spending you do every day. Savvy users are able to earn cashback or points that can be redeemed for everything from statement credits to free airline flights. Even your first credit card could give you the opportunity to earn rewards, though the most premium cards often require excellent credit. 

The key is still to avoid carrying a balance—that way, your earnings won’t be offset by interest payments.

Cons Explained

Credit cards can be useful, but they can also be the source of financial troubles. Not knowing how to manage credit cards can create a cycle of debt, while paying late and using a large portion of your credit limit can have a negative impact on your credit score.

You Can be Tempted to Overspend

Getting a credit card shouldn’t encourage you to buy things you can’t afford. But without responsible spending habits, you might end up with a balance that’s beyond your budget. A good rule of thumb is to only spend what you know you’ll be able to pay off fully by the due date.

You Could Feel More Overwhelmed by Bills

If you’re barely getting by while covering other expenses—including rent, car loans, student loans, and utilities—a credit card might seem like a lifeline. But if you make purchases and then can only afford to pay the minimum owed, you can quickly get in over your head. Focus on streamlining your expenses and building a budget you can stick to before turning to credit cards.

You May Not Be Ready for Plastic

If you don’t know much about credit scores, credit reports, how interest works, and other key credit concepts, you might want to wait to use credit cards until you’re ready. Improper credit usage could put your credit score at risk, affecting your ability to get more credit when you need it.

If you’re new to credit, a credit builder loan may be a better option than a credit card. You’ll make monthly payments to a lender that go into a savings account, which you’ll have access to at the end of the loan term. You’ll still build a credit history, but without carrying around plastic.

If you determine that the time is right for you to get a credit card, it can serve as a vital building block for your credit file—and a convenient tool to help manage and maximize your financial life.