Should I get a credit card?

In the adulting world, credit cards are sort of a rite of passage—a proof that you’re already in control of your finances and could go shopping with just a piece of plastic card with your name on it.

But is getting a credit card really a good idea? That depends on how you use it.

Many people have learned the advantages and disadvantages of having a credit card by using it and experiencing the consequences of their actions—falling in debt traps or reaping card rewards and cashbacks.

To help you decide on whether you should get a credit card, we’ve taken the time to list down the pros and cons of getting one:

PROs OF GETTING A CREDIT CARD

• Building credit

If you’re trying to improve your credit score, using a credit card responsibly (e.g. paying your dues in full) will help because it would reflect good financial standing on your part. Having good credit is important because credit companies will check your credit score when you apply for loans.

• Universal acceptance

Credit cards are useful when making purchases, particularly in foreign countries, as these are usually accepted everywhere. Some retail outlets, particularly luxury shops, usually don’t accept debit cards—even those from major banks, for payments. This is when credit cards come in handy.

• Cashbacks and rewards

Most credit card companies offer cashbacks and rewards to its users to encourage spending and this is actually good since you can get free items or experiences but be careful with your spending. If used properly, credit cards can help you gain more financial freedom but it’s important to be wary of debt traps. Bottomline is it’s still best to pay your credit card bill in full.

CONs OF GETTING A CREDIT CARD

• Debt trap

If you haven’t used a credit card before, it’s important to be wary of falling into a debt trap. Sure, it’s empowering to swipe that card when shopping but always be mindful that you still have to pay for your purchases to your credit card company.

• Interest charges

The biggest drawback of credit cards would probably be interest charges. Credit cards usually have high interest charges that could put you in further debt. But the good news is you don’t have to pay for interest charges if you pay your credit card bill in full always.

• Late fees

If you fail to pay your credit card bill on the due date, it’s very likely that you’ll get hit with late fees that could usually pile up if you keep on repeating to pay your dues past the required date. It’s important therefore to keep in mind the due date for your credit card bill to avoid any late penalties.