What Are the Main Advantages of Getting a Credit Card in the UK?
Published 12th of January 2013·Updated 21 April 2026
Reviewed by: Reviewed for accuracy April 2026
Credit cards offer genuine advantages over debit cards and cash when used responsibly: stronger fraud protection, a way to build your credit score, legal consumer protections under Section 75 of the Consumer Credit Act, and in some cases cashback or rewards on your everyday spending. The key is using them correctly so the benefits are not cancelled out by interest charges.
Short Summary
Section 75 of the Consumer Credit Act 1974 makes your credit card provider jointly liable with the retailer for purchases between £100 and £30,000. This protection does not apply to debit cards.
Using a credit card and paying the balance in full each month costs you nothing and builds a positive credit history that lenders look at when you apply for a mortgage or loan.
Cashback credit cards from providers including American Express, Barclays and John Lewis pay you a percentage of your spending back as cash or rewards, effectively giving you a discount on purchases you would make anyway.
The advantages only apply if you pay on time. Interest at 20 to 35 per cent APR quickly outweighs any reward or benefit if you carry a balance.
How does a credit card help build your credit score?
Every time you use a credit card and pay it back on time, that behaviour is recorded by Experian, Equifax and TransUnion, the UK's three main credit reference agencies. Lenders view this track record when you apply for a mortgage, car finance or personal loan.
Credit card debt is particularly useful for building your credit file because it is revolving, meaning you can borrow and repay repeatedly. A personal loan, by contrast, reduces each month and ends. Using a credit card for regular purchases and clearing the balance each month creates a continuous positive record.
What is Section 75 protection and why does it matter?
Section 75 of the Consumer Credit Act 1974 is one of the most powerful consumer rights available in the UK. If you pay for any item costing between £100 and £30,000 with a credit card, the card provider becomes jointly liable with the seller if something goes wrong. This means you can claim a refund from the card provider directly if:
- The retailer goes into administration before delivering your goods
- The product or service is not delivered as described
- The company refuses to honour a refund you are owed
This protection applies even if you only pay a deposit on the credit card and the remainder by other means. It does not apply to debit cards, bank transfers or cash.
What are the cashback and rewards benefits?
| Card type | Typical reward |
|---|---|
| Cashback cards | 0.5% to 1.5% of spending returned as cash |
| Supermarket rewards cards | Points convertible to vouchers (e.g. Tesco Clubcard, Sainsbury's Nectar) |
| Airline miles cards | Air miles per pound spent (e.g. British Airways American Express) |
| Retail rewards cards | Store credit or vouchers (e.g. John Lewis Partnership Card) |
Cashback and rewards cards make most sense if you spend regularly and pay in full each month. American Express offers some of the highest cashback rates in the UK, though it is not accepted everywhere. Barclaycard and Halifax also offer cashback products.
Are credit cards safer than debit cards?
Credit cards offer better fraud protection than most debit cards. If your credit card details are used fraudulently, you are generally not liable for the transactions under the terms set by major card networks. You report the fraud, the card provider investigates, and the disputed amounts are refunded while the investigation is underway.
With a debit card, fraudulent transactions come directly out of your current account. Whilst your bank will usually refund confirmed fraud, the money is missing from your account during the investigation, which can cause cash flow problems.
Can you use a credit card for free?
Yes, entirely. Paying your credit card balance in full by the due date each month means you pay no interest. Most UK credit cards include a 0% interest window of between 30 and 56 days on purchases. If you only spend what you would have spent on your debit card and clear the balance in full each month, a credit card costs you nothing and delivers all the advantages above.
Set up a direct debit for the full balance to ensure you never miss a payment and never pay interest unintentionally.
Frequently Asked Questions
Do credit cards affect your credit score?
Yes, positively if used correctly. Paying on time and keeping your balance below around 30 per cent of your credit limit builds a strong credit history. Missing payments or consistently maxing out your limit damages your score.
Is Section 75 protection available on all credit card purchases?
Section 75 applies to purchases of individual items costing between £100 and £30,000 made on a UK credit card. It does not apply to purchases made through third-party payment platforms such as PayPal, as there is no direct debtor-creditor-supplier relationship in that case.
Which credit card gives the best cashback in the UK?
As of April 2026, American Express cards offer some of the highest cashback rates available in the UK, typically 0.5% to 1.25% on all spending, with higher rates in the first few months. Barclaycard Rewards and Chase Bank's debit card are also worth comparing. Rates change regularly, so check a comparison site for the current best deal.
Can I get a credit card if I have no credit history?
Yes. Credit-builder cards from providers including Capital One, Aqua and Vanquis are designed for people with little or no credit history. They typically have lower limits and higher APRs but are accessible to most applicants. Use one responsibly for 12 to 24 months and your credit score will improve.
Is it better to use a credit card or a debit card for everyday spending?
If you can pay the balance in full each month, a credit card is better for everyday spending. You get Section 75 protection on eligible purchases, the possibility of cashback or rewards, and you build your credit history. If you are prone to overspending or cannot reliably pay on time, a debit card is safer.
What happens if I can't pay my credit card bill?
Contact your card provider immediately. Most lenders including Barclays, Halifax and HSBC have hardship teams who can arrange a payment plan. Missing a payment without contacting your lender will result in a late payment marker on your credit file and a penalty charge. The longer you leave it unaddressed, the more damage accumulates.