By Kim Porter
Edited by Michelle TipswordPros and Cons of Credit Cards
By Kim PorterEdited by Michelle Tipsword
Quick Answer
Credit cards offer several perks, like convenience and the ability to build credit. But you could wind up with expensive debt if you don’t use the card carefully. Understanding the pros and cons of a credit card can help you avoid pitfalls.
Credit cards are an easy way to pay, with consumers using them for 35% of all transactions in 2024. They come with a host of benefits, including convenience, consumer protections and possibly even rewards or special financing. But they may get expensive if you don't pay off your full balance each cycle or you miss payments.
If you're thinking about adding one to your wallet, here are some pros and cons of credit cards to consider.
| Pros | Cons |
|---|---|
| Convenient way to pay | Risk of overspending |
| Consumer protections | Potential debt |
| Possible low- or no-interest introductory offers | High interest rates |
| Travel perks | Possible fees, including annual fees, late payment fees and more |
| Rewards, including cash back, points and miles | Can damage credit if not used responsibly |
| Easy recordkeeping of purchases | |
| Build credit with responsible use |
Pros of Credit Cards
Managed responsibly, credit cards have plenty of advantages to offer cardholders.
Convenient Way to Pay
Using a credit card is generally more convenient than carrying cash or keeping enough money in your bank account to cover debit card purchases. The vast majority of merchants accept credit cards in person and online, giving you the flexibility to charge any amount up to your spending limit. You can also repay the balance over time, though you may incur interest charges.
Consumer Protections
Credit cards come with several consumer protections that are activated when you use the card. For example, many credit cards come with extended warranties, which extend the manufacturer's warranty period on eligible purchases. You may also dispute a charge with your card issuer if you buy something that turns out to be unsatisfactory, was falsely advertised or never arrives at all.
And if your card is lost or stolen, you're only responsible for up to $50 of unauthorized charges under federal law. Many credit cards take this protection a step further and offer zero liability when unauthorized purchases are made on your card.
Learn more: What Is a Chargeback?
Potentially No-Interest Financing
Many credit cards offer a grace period, which is the time between the end of your billing cycle and your payment due date. If you pay your statement balance in full by that due date, you can avoid interest on new purchases—essentially allowing you to use the card and pay it off without added finance charges.
Some credit cards also offer a 0% introductory annual percentage rate (APR) for a certain period of time, such as 12 to 21 months. This perk allows you to make purchases and balance transfers without paying interest during the entire introductory period. If you are repaying high-interest debt, a reprieve from interest can save you money.
It's important to understand how the offer works, though. You typically must pay off the balance before the promotional period expires—otherwise, you'll pay the remainder at the card's higher standard rate, and you may even be on the hook for all the past interest that accrued.
Learn more: How Do 0% Intro APR Credit Cards Work?
Travel Perks and Easier Reservations
Many credit cards offer travel benefits, like access to airport lounges, free checked bags and rental car insurance. Some cards also include travel insurance or extended warranties.
Credit cards also make hotel room reservations easier compared to debit cards, which may place a preauthorization hold on the card for the entire amount.
Best travel cards of 2026
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Offers from our partners
Citi Double Cash® Card
Intro APR:0% for 18 months on Balance Transfers
Ongoing APR:17.49% - 27.49% (Variable)
Rewards:2% (cash back)
Annual Fee:$0
Discover it® Chrome
Intro bonus:INTRO OFFER: Unlimited Cashback Match for all new cardmembers. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards.
Intro APR:0% intro APR for 6 Months on Purchases and 0% intro APR for 18 Months on Balance Transfers
Ongoing APR:17.49% - 26.49% Variable APR
Rewards:1% - 2% (cash back)
Annual Fee:$0
American Express Platinum Card®
Intro bonus:You may be eligible for as high as 175,000 Membership Rewards® Points after spending $12,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.
Ongoing APR:See Pay Over Time APR
Rewards:1x - 5x (Points per dollar)
Annual Fee:$895
Wells Fargo Active Cash® Card
Intro bonus:Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months
Intro APR:0% intro APR for 12 months from account opening on purchases and qualifying balance transfers
Ongoing APR:18.49%, 24.49%, or 28.49% Variable APR
Rewards:2% (Cash Rewards)
Annual Fee:$0
American Airlines AAdvantage® MileUp® Card
Intro APR:0% for 15 months on Balance Transfers
Ongoing APR:19.49% - 29.49% (Variable)
Rewards:2x (Miles per dollar)
Annual Fee:$0
Citi Strata Premier® Card
Intro bonus:Earn 60,000 bonus ThankYou® Points after spending $4,000 in the first 3 months of account opening, redeemable for $600 in gift cards or travel rewards at thankyou.com.
Ongoing APR:19.49% - 27.49% (Variable)
Rewards:1x - 10x (Points per dollar)
Annual Fee:$95
Costco Anywhere Visa® Card by Citi
Ongoing APR:18.74% - 26.74% (Variable)
Rewards:1% - 5% (cash back)
Annual Fee:$0
American Express® Gold Card
Intro bonus:You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.
Ongoing APR:See Pay Over Time APR
Rewards:1x - 4x (Points per dollar)
Annual Fee:$325
Citi® / AAdvantage® Platinum Select® World Elite Mastercard®
Ongoing APR:19.49% - 29.49% (Variable)
Rewards:2x (Miles per dollar)
Annual Fee:$99, waived for first 12 months
Citi® / AAdvantage® Globe™ Mastercard®
Ongoing APR:19.49% - 29.49% (Variable)
Rewards:1x - 6x (Miles per dollar)
Annual Fee:$350
Credit One Bank® Wander® American Express® with Dining, Gas & Travel Rewards
Ongoing APR:29.74% Variable
Rewards:1% - 10% (cash back)
Annual Fee:$95
Hilton Honors American Express Card
Intro bonus:Earn 70,000 Bonus Points plus a Free Night Reward after you spend $2,000 in purchases on the Card in the first 6 months of Card Membership. Offer Ends 4/15/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:3x - 7x (Points per dollar)
Annual Fee:$0
Marriott Bonvoy Brilliant® American Express® Card
Intro bonus:Earn 200,000 Marriott Bonvoy® bonus points after you use your new Card to make $6,000 in purchases within the first 6 months of Card Membership. Offer Ends 5/13/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:2x - 6x (Points per dollar)
Annual Fee:$650
Discover it® Miles
Intro bonus:UNLIMITED BONUS: Unlimited Mile-for-Mile match for all new cardmembers. Discover gives you an unlimited match of all the Miles you’ve earned at the end of your first year. There’s no signing up, no minimum spending or maximum rewards. Just a Miles-for-Miles match. You could turn 35,000 Miles into 70,000 Miles.
Intro APR:0% intro APR for 15 months on Purchases and Balance Transfers
Ongoing APR:17.49% - 26.49% Variable APR
Rewards:1.5x (Miles per dollar)
Annual Fee:$0
Delta SkyMiles® Reserve American Express Card
Intro bonus:Earn 100,000 Bonus Miles after you spend $6,000 in purchases with your new Card, and an additional 25,000 bonus miles after you make an additional $3,000 in purchases on the Card, both within your first 6 months. Ends 04/01/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:1x - 3x (Miles per dollar)
Annual Fee:$650
Delta SkyMiles® Gold American Express Card
Intro bonus:Earn 70,000 Bonus Miles after you spend $3,000 in purchases with your new Card, and an additional 20,000 bonus miles after you make an additional $2,000 in purchases on the Card, both within your first 6 months. Ends 04/01/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:1x - 2x (Miles per dollar)
Annual Fee:$0 introductory annual fee for the first year, then $150.
Delta SkyMiles® Platinum American Express Card
Intro bonus:Earn 80,000 Bonus Miles after you spend $4,000 in purchases with your new Card, and an additional 20,000 bonus miles after you make an additional $2,000 in purchases on the Card, both within your first 6 months. Ends 04/01/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:1x - 3x (Miles per dollar)
Annual Fee:$350
Hilton Honors American Express Surpass® Card
Intro bonus:Earn 130,000 Bonus Points plus a Free Night Reward after you spend $3,000 in purchases on the Card in the first 6 months of Card Membership. Offer Ends 4/15/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:3x - 12x (Points per dollar)
Annual Fee:$150
Delta SkyMiles® Blue American Express Card
Intro bonus:Earn 10,000 bonus miles after you spend $1,000 in purchases on your new Card in your first 6 months.
Ongoing APR:19.49%-28.49% Variable
Rewards:1x - 2x (Miles per dollar)
Annual Fee:$0
Marriott Bonvoy Bevy® American Express® Card
Intro bonus:Earn 175,000 Marriott Bonvoy® bonus points after you use your new Card to make $5,000 in purchases within the first 6 months of Card Membership. Offer Ends 5/13/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:2x - 6x (Points per dollar)
Annual Fee:$250
One Key™ Card
Intro bonus:Limited Time Offer: Earn $300 in OneKeyCash™ after you spend $1,000 on purchases in the first 3 months. OneKeyCash is not redeemable for cash and can only be used on Expedia®, Hotels.com® and Vrbo®. To learn more, please refer to the One Key Terms and Conditions at www.expedia.com/one-key-terms.
Ongoing APR:18.49%, 23.49%, or 28.49% Variable APR
Rewards:1.5x - 3x (Points per dollar)
Annual Fee:$0
One Key+™ Card
Intro bonus:Earn $350 in OneKeyCash™ after you spend $3,000 on purchases in the first 3 months. OneKeyCash is not redeemable for cash and can only be used on Expedia®, Hotels.com® and Vrbo®. To learn more, please refer to the One Key Terms and Conditions at www.expedia.com/one-key-terms.
Ongoing APR:18.49%, 23.49%, or 28.49% Variable APR
Rewards:2x - 3x (Points per dollar)
Annual Fee:$99
See all our best travel credit cards for 2026.
Rewards
Many credit cards come with rewards programs where you earn cash back, free hotel nights or airline miles every time you make an eligible purchase. Redemption options depend on the card issuer and the credit card, but there's a lot of flexibility. You can use the rewards to get ahead, for example, like paying down debt with the cash back you earned. Or you could spend your airline miles on your next vacation.
It's worth noting that some of the most generous rewards programs come from cards with an annual fee. And, if you typically carry a balance, be aware that any rewards will not outweigh the interest rate of the card. These cards should be paid off every month to get their full value.
Easy Recordkeeping
Your credit card statements are an easy place to keep track of purchases or understand where your money is going each month. Some credit cards also come with built-in tools, like online accounts and mobile apps, that allow you to view spending summaries and set up alerts.
Potential to Build Credit
Credit cards are a form of borrowed money, so they help you build credit in several ways. First, opening one adds a new account to your credit history, which could help diversify your credit mix. Your new credit limit also increases your available credit, potentially reducing your credit utilization ratio and helping your scores.
To maintain healthy credit, you must make on-time payments each billing cycle and try to keep your balance low. Keeping your account open also helps lengthen the average age of your accounts, which is also good for your credit scores.
Learn more: How to Use a Credit Card to Build Credit
Cons of Credit Cards
Credit cards also have their drawbacks, which mainly center on their financial risks.
Risk of Overspending
It can be easy to lose track of how much you've spent when you're using a credit card instead of cash. The convenience coupled with the ability to spend up to your credit limit can be helpful, but these perks could also work against you if you're tempted to overspend.
A high credit card balance can become expensive quickly, especially if you get into the habit of making only minimum payments as your debt grows. Maintaining high balances on your credit cards can also do serious damage to your credit scores.
Potential Debt
Overspending on your credit card can lead to carrying a balance, which means paying interest and potentially falling into debt. In some cases, juggling multiple cards or making only minimum payments can create a debt spiral, where high interest charges make it harder to catch up. You may end up taking on even more debt just to stay afloat.
Tracking your spending and sticking to a budget can help you use credit responsibly and prevent financial stress.
High Interest Rates
Credit cards charge some of the highest rates among the different types of credit. If you carry a balance from month to month on your cards, you could pay 20% or more in interest on your balance depending on the card. This could make it harder to budget or pay off your card.
If you have a card with a 0% intro APR, you'll pay no interest during the promotional period, but that rate will increase to the standard rate once the intro period ends.
In addition, credit cards typically have variable interest rates, which fluctuate based partly on the federal funds rate. This means your credit card APR may rise or fall periodically. The new APR usually applies to new charges, not your current balance.
Fees
Your credit card may come with several types of fees that cost you money or eat into the rewards you earn. For example, many premium credit cards come with an annual fee, and some cards charge when you add an authorized user or take out a cash advance. Paying late—even by just a day—can also result in late fees and potentially a penalty APR.
It's smart to familiarize yourself with fees and what triggers them. You may decide fees are worth it, but you might also look for ways to avoid them if you don't think you're getting value from them.
Learn more: When Do Late Payments Get Reported?
Potential Credit Damage
Using a credit card can help you build healthy credit, but it can also have the opposite effect in some cases. First, opening the account shortens the average age of all your accounts and adds a hard credit inquiry to your credit reports. Both events can negatively impact your credit scores, though the impact of a hard inquiry is typically temporary and minor.
And because payment history is the most important factor of your credit scores, missing a credit card payment by 30 days or more can cause your credit scores to significantly drop. Maintaining a high credit card balance relative to your credit limit can also cause your credit score to drop.
How to Use a Credit Card Responsibly
A credit card can be a useful tool when used responsibly. Like every tool, it works best in skillful hands. Here are some ways to avoid some of the potential pitfalls of credit card use:
- Set up alerts so you get a text or email when a credit card payment is due or your balance reaches a threshold you select.
- Use autopay to cover either your minimum payment or the entire balance by the due date. Just make sure there's always enough in your bank account to cover the payment.
- Spend only what you can afford to pay back each month. And if you've taken out a 0% intro APR credit card, pay off the balance before the promotional period ends.
- Pay on time each month to prevent late payments from blemishing your credit.
Alternatives to Credit Cards
It's hard to beat credit cards for convenience and perks, but if you're unsure about getting a new card, there are other options.
- Debit cards: A debit card withdraws funds from your linked checking account, so you can only spend the money you have available. These may help you avoid debt, though you won't usually build credit in the process.
- Personal loans: A personal loan may offer higher borrowing limits and lower interest rates than a credit card, and you can build credit if the lender reports your account to the credit bureaus. Consider using one for large purchases or for consolidating debt.
- Buy now, pay later (BNPL) services: BNPL services typically allow you to finance purchases with fixed installment payments—with no interest if you follow the payment schedule. While they offer convenience, you typically won't build credit with them.
- Community help: If you're considering a credit card because you're having trouble making ends meet, check if you qualify for government assistance or dial 211 for guidance. You may also be able to borrow money from family or friends.
Frequently Asked Questions
The Bottom Line
A credit card can be a great convenience, and rewards cards can help you stretch your travel dollars or offer cash back on purchases. They also offer consumer protections and some perks that cash does not.
But credit cards can tempt you to overspend and don't offer the same sort of feedback that an empty wallet or low bank balance does. It's easy to get yourself into serious debt, and fees plus higher interest rates can make it difficult to climb out.
If you believe a credit card is the right choice, Experian's card comparison tool can help you sift through the possibilities to find one that is right for you and fits your unique credit profile.
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About the author
Kim Porter
Kim Porter began her career as a writer and an editor focusing on personal finance in 2010 and has since been published everywhere from Yahoo! Finance to U.S. News & World Report, Credit Karma, USA Today, Fortune and more.
Read more from Kim