What are the main advantages to getting a credit card?

There are numerous advantages to getting a credit card and really, every responsible adult should at least consider getting one. Here are a few reasons why:

Advantage 1: Build up your credit score

You need a good credit rating for all sorts of different reasons, any time you want to borrow money your credit history will be considered and having a poor credit rating will hurt your ability to get a mortgage, buy a car on finance or borrow money for anything else.

Using a credit card is a form of borrowing and every time you build up a balance on your credit card and pay it off, that will be added to your credit file and show up as a debt successfully paid off.

Unstructured debt

Credit card debt is particularly helpful for your credit file because it is unstructured debt. Unlike a personal loan, for instance, a credit card means you can take out new debt and pay it off constantly, so it is a very convenient way to build up that credit score.

Advantage 2: Spending convenience & fraud

Credit cards are accepted virtually everywhere in the world these days, they are safer than carrying cash and they come with all sorts of fraud protection that your debit card probably doesn’t have. So in short, they are the easiest and safest way to spend money without fear of reprisal.

Advantage 3: Cash back & rewards

Because credit card companies make money when you spend money (they get a commission from the person you buy from) they like to give you incentives to use their card and to spend lots. Hence, you can get cash back credit cards which give you a small amount of cash back for each transaction you make. It’s not a huge amount, but it adds up and it if you get cash back on things you would buy anyway it’s like getting free money.

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