I’m so conflicted about whether to get a credit card. I’m considering it to accumulate points for flights and to build my credit score.
However, my concern is that it might create a false sense of security with spending, making me more likely to disregard the strict budget I’ve set for myself.
What should I do?
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Just…don’t spend more money then you have. It may not be easy, but it’s incredibly simple.
In the States, credit cards are a great tool for increasing your credit score, building a credit history, not using a debit card and thus putting your bank account at risk for fraud, and for the perks you mention.
The only trade off is they force you to have a bare minimum amount of self control.
Based on the most helpful WSO content, credit cards can be a double-edged sword. Here's the breakdown:
Yay (Pros): - Building Credit Score: Responsible use of a credit card (paying off balances in full and on time) is one of the best ways to build a strong credit score. - Rewards and Points: If you're disciplined, you can leverage cashback or travel rewards to save money on flights, vacations, or other expenses. - Purchase Protection: Credit cards often provide an intermediary in case of vendor disputes or fraud, which is especially useful for large purchases.
Nay (Cons): - Psychological Spending Trap: Studies show that swiping a card (or using app-based payments) reduces the "pain" of spending, making it easier to overspend. This could conflict with your strict budget. - Debt Risk: If you don't pay off the balance in full each month, interest charges can quickly snowball, negating any rewards or benefits.
Advice: If you decide to get a credit card, set strict rules for yourself: 1. Treat it like a debit card—only spend what you already have in your checking account. 2. Automate full balance payments each month to avoid interest. 3. Use it strategically for planned expenses (e.g., bills, groceries) to accumulate points without overspending.
If you're worried about losing control, it might be better to stick to cash or debit until you're confident in your budgeting discipline. Remember, the key is to use the card as a tool, not a crutch.
Sources: Managing Your Money - Building a Personal Financial Model, I cant save money, Managing Your Money - Building a Personal Financial Model, Anyone Churn Credit Cards?, The Last "what should I do with my money?" Thread (hopefully)
you need to have revolving credit. free float buddy.
Get a card and don't spend more than you would otherwise.
In addition to what CRE said, it's easier to dispute fraudulent charges on a credit card than on a debit card.
Use the card and pay it off before the statement date. As long as your only spending money you have, you can build credit and accumulate points.
Go on Credit Karma and do what it says to build an 800+ credit score.
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