Is a credit card right for you?

Credit cards can be a convenient way to spend when you need to and pay back later, and as a backup when you’re travelling. They can be useful in emergencies and many also offer great rewards and other benefits. But they can also have some downsides that you need to be aware of before applying for one.

In this article we’ll look at some of the benefits and potential pitfalls, to help you decide whether a credit card could be a good option for you.

It’s reassuring to have access to a credit card in emergencies – for example if you need to pay for an urgent flight home for you or a family member, and you have a plan to repay it.

Many cards offer interest-free days, which means you effectively have access to interest-free credit on purchases for a short time – as long as you pay your card off in full by the due date each month. 

Some cards offer additional benefits such as Airpoints or cash back.

If you don’t pay your balance in full each month, you’ll pay interest—. Even if you pay some of your balance, you’ll still pay interest. It pays to have a plan in place so that you can always repay the balance in a short time period, to avoid paying more interest than you need to. 

Having access to credit can be very tempting. So if you think you’ll find it hard to avoid those temptations, a credit card may not be for you. If you use it to buy things you haven’t budgeted for your balance can quickly mount up and make it difficult to pay off – which means you’ll incur interest that could make that ‘bargain buy’ more expensive than you thought.