Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.

The pros and cons of owning a credit card

A credit card can give you flexibility, security and rewards, but there are some drawbacks.


Credit cards can be a useful financial tool: They let you pay for goods and services without physically handing over cash or organizing a bank transfer of some sort. But if you’re not careful, you could end up in financial straits from overspending or not managing your debts wisely.

The pros of credit cards

Owning a credit card comes with many benefits and perks, including:

  • Flexibility. Credit cards allow the customer to avoid having to carry large amounts of cash around. They are perfect for those occasions when an unexpected purchase becomes necessary, and sufficient cash is unavailable.
  • Online transactions. You can use your card to safely purchase items and services online even from international retailers.
  • Security. When cash is lost or stolen, there may be no way of recovering it. If it happens to your credit card, the card will be replaced and your maximum liability for fraudulent use is limited by law to $50. However, Visa, Mastercard and American Express all operate zero-liability policies so that the customer is not liable for even a single cent if reported to the card issuer.
  • Spending power. Your card’s credit line gives you extended purchasing power so you can buy expensive goods straight away and pay them off later.
  • Rewards programs. These are made to make your credit card spending worth your while. Depending on your card, you can claim a variety of rewards such as flights, hotel stays, gift cards and cash back.
  • Travel reservations. In today’s Internet age, reserving your flight or booking your hotel stay often requires a credit card to complete. If you don’t have one, you may find it hard to make your travel itinerary.
  • Travel insurance. Most travel credit cards come with a variety of insurance and coverage options, including travel accident insurance, lost luggage coverage, car rental collision damage waiver, trip cancelation and more.
  • Intro offers and rates. Credit card providers will often announce special offers, and regularly allow new or existing customers to make balance transfers and purchases at 0% introductory APR, which can last up to 21 months.
  • Build your credit. Credit cards are one of the most common tools for building credit. All you have to do is get a credit card from a provider that reports to all three major credit bureaus — Experian, Equifax and TransUnion, and make sure you pay your balance in full before it’s due. Also, you may want to Keep an eye on your utilization levels and keep them under 30%.

The cons of credit cards

Even though credit cards come with many benefits, there are some downsides to consider, such as:

  • Overspending. When talking about the pros and cons of credit cards, this is the classic downside. Some individuals can get easily carried away with their credit card, creating a debt that is beyond their means to pay off.
  • High borrowing cost. Credit cards should not be seen as having access to free money. In fact, once the interest rate starts kicking in, you could end up paying more than the purchase price of your goods.
  • Fees. Depending on the card you choose and the way you use it, you could pay an annual fee, foreign transaction fees, late payment fees, returned payment fees, balance transfer fees and cash advance fees.
  • Could damage your credit. If you apply for too many credit cards in a short amount of time, card issuers may see you as someone desperate for cash and could decline your applications. This will lower your credit score. Also, if you don’t pay off your balance on time, your credit score will take a hit.
  • Fraud. Credit card fraud is one of the most common types of fraud. Scammers could use skimming devices, phishing techniques and other tricks to steal your credit card information and your hard-earned money.

Bottom line

If you’re wondering whether getting a credit card is a good choice for you, be sure to weigh the pros and cons. If you do decide you want a credit card, make sure to compare your credit card options before applying.

Back to top

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site