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How to get the most out of your credit card

We checked in with Emma-Lou Montgomery, Associate Director at Fidelity International to uncover the dos and don’ts of credit cards

Credit card on multicoloured background with Invest In You logo© Getty
Barbara George
Freelance Journalist
January 18, 2024
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Sometimes credit cards are perceived to be all bad news with no benefits which isn't exactly true. There are many perks to having a credit card if used wisely. The keyword here is wisely! Only you know if you can be trusted to use one responsibly, so if you don't feel comfortable applying for one, then don't.

A credit card is a good way to manage your cash flow according to Emma-Lou Montgomery, Associate Director at Fidelity International. She says it can boost your credit rating, making you a better prospect for lenders, "which can be particularly useful if you want to get a personal loan or mortgage at some point in the near future."

If you're intrigued by credit cards but don't know whether they're worth it, we've done the hard work for you by exploring the pros and cons of having one in your life.


Credit Score

Credit cards can help build your credit score. How, might you ask? By using your credit card throughout the month to make purchases and paying the full balance once your statement has come through. By doing this, the balance is recorded and shows lenders that you can manage your repayments well.

A good credit score will help you get a personal loan or mortgage in future© Getty
A good credit score will help you get a personal loan or mortgage in future

Cost Spreading 

One of the biggest advantages of using a credit card is being able to spread the cost of an expensive item over a period of time. Credit cards are great, especially in emergency situations where, for example, your boiler has stopped working and needs replacing urgently. If you don't have the cash upfront to cover the cost, you can pay for it on a credit card and make repayments over a number of months.


For big-ticket expenses such as holidays, it’s recommended to always use a credit card. This is because credit cards offer buyers protection. This means your money is more protected in the event of the airline going bust. In Section 75 of the Consumer Credit Act, you are allowed to challenge (via your bank) any merchant for purchases above £100 in value if an issue arises.

Close up woman hands using credit card to buy online on laptop - E-commerce and shopping online concept© Getty
Reward programs are one of the best advantages you get from using a credit card

Reward Programs

Who doesn't love a freebie?! Reward programs are one of the best advantages you get from using credit cards. Cashback, free petrol, airline miles, and point reward programs are just some of the perks you can earn. And once you get used to using credit, strategically using rewards can help you save money in the long run.


High-Interest Debt

If you don't use your credit card wisely and fail to repay the minimum requirements at the end of the month, you could spiral into high-interest debt. This could damage your credit score as there will be penalties for missed payments. A lot of self-control and discipline is needed to make sure the monthly payments are made on time.

Excellent Credit Score with pen and calculator© Getty
Beware of spiralling into high-interest debt


Credit cards extend our purchasing power. We are more likely to purchase things we can't afford because of our credit cards. People see it as "free money", forgetting you have to pay that "free money" back. This is why so many people are in debt over their heads. Use your credit card for things you would have bought anyway, not for things you can't afford.

Hidden Fees

Some credit card accounts have annual fees alongside fees for taking out cash or for using your credit card abroad. Make sure you do your homework on what card is best suited for your needs. Also, you might spend more on fees and interest rates than you earn on discounts and cashback so do check that the benefits of having a credit card outweigh the cost.

View of desk with credit card in the wallet on computer laptop© Getty
Make sure you do your homework about hidden fees


You can apply for a credit card online directly on a provider's website or in a branch. When making an application, the limit and interest rate that you are offered will be decided by your credit score and how much credit you already have out in your name (e.g. existing loans, credit cards and overdrafts). The limit on a credit card determines how much you are able to spend on credit.

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When choosing a card, there are lots to consider and plenty of providers to choose from. Emma-Lou advises: "Look at whether there’s an annual charge and consider cashback or other cardholder perks. Make sure these are useful to you. If you’re taking out a card in order to shift an existing balance to a 0% rate, check how long the rate lasts for and also bear in mind the fee."

Ultimately, credit cards hold a lot of benefits when used correctly so ensure you do your research before applying.

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