Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

Recently, a 30-year-old posted on Reddit asking if his fear of credit cards was holding him back. He said he’s married, owns an inherited home, and shares one vehicle with his wife. While he said he has used a Buy Now, Pay Later service in the past, he’s steered clear of credit cards because he remembers his grandparents complaining about credit card debt.

So, should he pass up on cards or would he be better off signing up for one?

Not getting a credit card can be a wasted opportunity

The question of whether or not to get a credit card comes down to one single factor: Can you use the card without carrying a balance?

If you are likely to end up charging more on your card than you can pay off at the end of the billing cycle, you will get stuck paying interest at a high rate, as the Federal Reserve reports the average card issuer charges 21.76%.  No rewards or cardholder perks make paying such a high rate worth it.

If you are not likely to carry a balance, on the other hand, then passing up a card out of fear is a shortsighted choice that causes you to miss out on all kinds of benefits including:

• A credit-building opportunity. You build credit when you use cards, keep your balance low, and pay them responsibly. Good credit makes other borrowing, like a car loan or mortgage, cheaper. While this Reddit user has an inherited house, he and his wife do share a vehicle. If he decides to borrow to buy another car someday, he could benefit from a higher credit score.
• The chance to earn rewards. The Reddit user could sign up for a cashback credit card or a card that provides miles or points for spending. This makes every purchase a little cheaper. If you get 2% back on all that you buy, you effectively get a 2% discount, which adds up over time.
• Borrower protections. Many cards offer protections to borrows such as an extended manufacturer warranty or return protection if a company gives you a hard time returning an item. If you are the victim of a fraudulent merchant, you can also get help from your card company, which can potentially take the money back that you paid. This helps you to avoid financial loss.
• Other cardholder perks. You can look for cards offering a variety of different perks. This could include access to airline lounges, free rental car or travel insurance, or even a concierge service that can help you book tickets or get restaurant reservations.

Since the Reddit user didn’t say he has a lot of debt or a lot of financial struggles, it may be worth trying out cards and making sure to use them responsibly from day one. If he discovers he is overspending, he can always stop — or limit his use, such as by charging only one or two small purchases each month and paying the money back right away.

Credit cards could be a better choice than Buy Now, Pay Later

The Reddit poster made another comment about his use of credit that is worth mentioning. He said he has bought items on credit using a Buy Now, Pay Later service. Unfortunately, this is usually a bad idea. It’s often an expensive approach to financing that can trick you into thinking you can afford something when you really can’t.

If you want to make a larger purchase, your best bet is to save up for it in a high-yield savings account. If you really can’t wait, then you may want to look into a credit card offering a 0% introductory APR instead. These cards usually give you 12-15 months to pay for purchases without paying interest. This can be a better option than BNPL since you won’t add to the cost of the item — as long as you can pay enough each month to pay the card in full before interest comes due.

Ultimately, credit cards can be really useful for all the reasons mentioned above and for the chance to get a 0% APR deal. The Reddit user should consider signing up for a card and making sure he pays the balance to get the benefits without the downside.

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

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