Borrow money without paying interest
If you pay off your statement balance in full every month, you’ll have up to 56 days interest-free. This means you won’t pay any interest on what you spend for around 56 days,depending on the date of your purchase date and payment due date.
Some credit cards also come with an interest free purchase offer. This means that by paying at least your minimum payments every month, you could enjoy an extended interest free period on purchases you make. You could reduce your balance quicker if you pay more than the minimum payment each month.
To keep your interest free rates, you’ll need to stay within your credit limit and pay at least the minimum amount on time, or your interest free rates will go up to your purchase rate. Once your interest free offer ends, you’ll pay your purchase rate on any remaining balances, as well as on anything new you buy.
You can still buy things with your Barclaycard, but if you’ve got a balance or money transfer, you’ll be charged interest at your simple standard rate for anything new you buy, unless you pay those purchases off in full by your payment due date or you have a purchase offer.
If you’re unsure, simply refer to either your terms and conditions or the reverse of your statement for further details on the fees charged. For more information, have a look at our section onunderstanding credit card fees.
It could help you build a positive credit history
By paying your credit card balance off in full and on time each month, you could help build a positive credit history. It’s important to do this as lenders will look at your credit history to help them decide whether to lend to you or not. As well as helping you get access to credit, having a good credit history could also help you get a better deal on things like your mobile phone contract.
But it’s important to remember that if you don’t manage your card well it will damage your credit history, which could lead to problems when applying for credit in the future. For more information on your credit history, have a look atour section on credit history.
Keep track of how much you're spending
Every transaction you’ve made is shown on your statements so it’s easy to monitor how much you’re spending every month. This can be a helpful budgeting tool, plus many credit card companies also have online servicing where you can view your last transactions in detail.
Transfer balances so you pay no interest
It’s always best to try and pay off your balance in full every month, however interest free or 0% balance transfer cards could be good when you have a credit card with a balance on it, as they allow you to transfer this balance on to your new card and you could get a breather from paying interest on that balance over a set period of time – just as long as you make your minimum payment on time each month.
Even with a transfer fee to pay, it may work out cheaper over the course of the interest free period. Just remember – this doesn’t mean your minimum payment will be lower each month, it just means it’ll take less time to pay it off, and also, if you only make the minimum payment each month, you may not pay off your balance before the end of the interest free period.
To keep your interest free rates, you’ll need to stay within your credit limit and pay at least the minimum amount on time, or your interest free rates will go up to your purchase rate. Once your interest free offer ends, you’ll pay your purchase rate on any remaining balances, as well as on anything new you buy.
Be prepared for emergencies
Having a credit card could help cushion the cost of life’s ups and downs as it can sometimes be more convenient to use a credit card than take out a loan.
FAQs
Credit card benefits
- Rewards such as cash back, miles, or points.
- Protection against fraud.
- Increased purchasing power.
- Not linked to a checking or savings account.
- Rental car or hotel room holds.
- Credit history building and rebuilding.
5 Disadvantages of Credit Cards
- High-Interest Rates. If you carry a balance on your card, the interest rate can be as high as 30% or more. ...
- Potential for Overspending. It's easy to get caught up in the moment when using a credit card instead of cash or a debit card. ...
- High Annual Fees. ...
- Hidden Costs. ...
- Credit Card Debt.
Biggest Pros and Cons of Credit Cards
| Rank | Top 10 Credit Card Pros | Top 10 Credit Card Cons |
|---|
| 1 | Credit Building | Overspending and Debt |
| 2 | Convenience | Fraud |
| 3 | Rewards | Fees |
| 4 | Pay Over Time | Fine Print |
6 more rowsKey takeaways
- Credit cards can be used for interest free borrowing, as many cards come with a 0% APR period.
- Paying off a credit card in full each month can boost your credit score over time.
- Beyond interest rates, credit cards may have additional charges.
- Missed payments or accumulating debt can harm your credit rating.
Paying with a credit card makes it easier to avoid losses from fraud. When your debit card is used by a thief, the money is missing from your account instantly. Legitimate expenses for which you've scheduled online payments or mailed checks may bounce, triggering insufficient funds fees and affecting your credit.
What is one risk of a credit card? ›
One of the most significant risks associated with Credit Cards is the potential for accumulating debt. Credit Cards make it easy to overspend, and if you're not careful, you can quickly accumulate debt you may struggle to repay. This can lead to high-interest rates, late fees, and damage to your credit score.
What is the dark side of using credit? ›
Key Takeaways. Credit cards make it all too easy to overspend. Buying on credit can also make your purchases more expensive, considering the interest you may pay on them. Getting into too much debt can not only hurt your credit score but also strain relationships with family and friends.
What is one of the biggest dangers in using a credit card? ›
Interest charges. Perhaps the most obvious drawback of using a credit card is paying interest. Credit cards tend to charge high interest rates, which can drag you deeper and deeper in debt if you're not careful. The good news: Interest isn't inevitable.
Is it good to have a credit card and not use it? ›
Not using a credit card isn't necessarily a bad thing. However, it can come with some unintended consequences. Although charging inactivity fees is no longer legal, issuers have other options at their disposal — some of which could affect your credit score, your available credit and more.
What is a positive in having a credit card? ›
With responsible use, credit cards can help you build your credit and earn valuable rewards. Plus, you can enjoy protection against unauthorized charges and other benefits.
A credit card might be the right choice for you, but you have to consider it as a very serious financial decision. Getting a credit card at 18 can help you begin building credit, when used responsibly. However, if you don't keep up with payments, credit card debt will create a big financial mess.
Is credit card use good or bad? ›
If you pay your credit card bills on time, your credit score will remain good. However, if you pay your credit card bills after the deadline, it will impact your credit score in a negative way. Is using a credit card a good thing? Yes, using a credit card is a good thing only if you use it responsibly.
What is a disadvantage of credit? ›
Disadvantages. Overuse. High interest/annual fees. Increase your debt. Establish poor credit if not used wisely.
Why use a credit card instead of debit? ›
Credit cards often offer better fraud protection
With a credit card, you're typically responsible for up to $50 of unauthorized transactions or $0 if you report the loss before the credit card is used. You could be liable for much more for unauthorized transactions on your debit card.
What are three advantages of using a credit card over a debit card? ›
Credit cards help build your credit history. They offer rewards like cash back, miles or other rewards for your purchases. Offers better protection from fraudulent charges. When a fraudster uses your credit card, they are taking money from the issuer, instead of stealing directly from you and draining your bank account ...
