Do I Need a Credit Card?

Credit cards have both pros and cons, though with responsible use, the benefits far outweigh the downsides. The pros of credit cards range from convenience and credit building to 0% financing, rewards and cheap currency conversion. The cons of credit cards include the potential to overspend easily, which leads to expensive debt if you don't pay in full, as well as credit score damage if you miss payments.

To help you make the most of the positive features while steering clear of the pitfalls, WalletHub put together a list of the biggest pros and cons of credit cards. Hopefully, this will make it clear why responsible credit card use is a no-brainer. You don't even need to make purchases with a credit card to benefit.

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Yes, you should get a credit card. You should get your own credit card account if you're at least 18 years old, and you should get a parent to make you an authorized user on their credit card account when you are too young to get a credit card alone. There are many reasons to get a credit card, including convenience and earning rewards on purchases, but the best benefit is building the credit history needed to eventually land great interest rates when you need to borrow a lot of money, such as for a home or a vehicle.

Why Should You Get a Credit Card

• Credit cards help build credit. Every month you pay your bill on time and keep your account in good standing, credit cards report good information about you to credit bureaus – even if you don't use the card at all.
• Credit cards are convenient. Credit cards – especially Visa and Mastercard – are accepted nearly everywhere in the world, and it's much easier to keep track of a credit card than a wad of paper currency.
• Credit cards are better to use abroad than cash or debit cards. As long as you don't get a credit card with foreign transaction fees, credit cards are a huge asset when traveling outside the U.S. You won't have to worry about changing money into local currency because it happens automatically at a low rate with a credit card.
• It's easier to deal with credit card fraud than debit card fraud. All credit card networks have $0 liability guarantees for fraudulent transactions. When credit card fraud takes place, it's usually a simple matter of calling the card issuer to get the charges taken off your account. Debit card fraud isn't as easy to deal with, because it involves money that was taken from your bank account.
• Many credit cards offer rewards on purchases. Most people welcome free money, and that's exactly what credit card rewards are. With the best rewards credit cards, you can get up to 6% back on some types of purchases, or up to 2% back on every purchase with a flat-rate cash back card.

When used responsibly, credit cards are a win-win situation. Plus, many credit cards give the opportunity to earn bonus rewards and enjoy perks such as free airport lounge access or 0% introductory APRs. There are even credit cards for people with bad credit - some of which can help rebuild damaged credit.

It's reasonable to be worried about the downsides of credit cards – namely, overspending. But don't give up on building credit as a result. Tools like secured credit cards and automatic payment features can help mitigate the risks for people who are new to credit cards, and you don't have to even use a credit card to make purchases for it to build your credit history.

If you aren't quite ready to take on the risk yourself, ask a parent or good friend if they can add you to their card as an authorized user. As long as the primary cardholder uses the card responsibly, authorized users get to build credit history without having to remember to pay the bill.

Ultimately, remembering these three critical rules of credit card use can go a long way toward ensuring credit is a positive in your life: 1) Always pay your bill in full and on-time; 2) Don't spend more than you can afford to pay every month; and 3) Always read the fine print before you apply. Do those things and your wallet will thank you.

Plenty of credit cards are worth getting, since they can save you much more than they cost you if used responsibly. For example, the Chase Freedom Unlimited® card is worth getting if you have good credit because it has a $0 annual fee and offers 1.5 - 5% cash back on purchases, with an introductory APR of 0% for 15 months.

The credit card that is most worth getting for you as an individual will depend on your own needs and wants, as well as what you can qualify for. After checking your credit score, you can narrow down your search to cards you have a good chance of getting. Then, you can pick a card that fits your needs, such as a card that helps you build credit, earn rewards, finance purchases or get the best value at your favorite retailer. For your convenience, below is just a small sample of credit cards that are worth getting for different types of customers.

Credit Cards That Are Worth Getting

To learn more, check out WalletHub's guide on how to choose a credit card. You can also browse our editors' picks for the best credit cards and get personalized credit card recommendations by joining WalletHub for free.

If you need a credit card today, you should apply for either an American Express card, a Capital One card or one of the store cards that offer instant use. While it's pretty common to get approved for a credit card the same day if you apply online, you'll still usually have to wait another 7-10 business days before your card comes to use it.

All American Express cards give you the potential for an instant card number after approval, which will give you access to part of your credit line until your card arrives. Capital One cards also provide instant use through the Capital One app, but that's only possible if you're an existing Capital One cardholder. Store cards, such as the Target Credit Card, may give you an instant number or code to use as a temporary version of your card.

Some of the Best Credit Cards You Can Get Today

The Amex Blue Cash Everyday offers $200 statement credit after spending $2,000 in the first 6 months. The card also gives 3% cash back at U.S. supermarkets, U.S. gas stations and on U.S. online retail purchases (up to $6,000 spent per year in each category), as well as 1% back on all other purchases, earned as statement credits. This card has a $0 annual fee.

The Costco Credit Card offers 4% cash back on eligible gas and EV charging purchases (up to $7,000 spent per year), 3% back on restaurants and travel, 2% back on Costco and Costco.com purchases, and 1% back on all other purchases. This card has a $0 annual fee but you must be a Costco member to get it. Th card gives a temporary code to scan at checkout until the actual card arrives.

The Capital One QuicksilverOne offers 5% cash back on hotels and rental cars booked through Capital One Travel, as well as 1.5% cash back on all other purchases. This card has a $39 annual fee. Must be an existing Capital One customer to see your card information through the app.

The Capital One Platinum Secured card requires a minimum security deposit of $49, $99 or $200. Your credit line will always be at least $200. This card doesn't offer rewards. Capital One Platinum Secured has a $0 annual fee. Must be an existing Capital One customer to see your card information through the app.

The Target Credit Card offers 5% discount at Target and Target.com. The card has a $0 annual fee. Target Credit Card gives a temporary number after approval to use until your card comes.

While there's no guarantee these options will get you a credit card today, they'll certainly give you your best chance. Don't forget that if you get approved for a Capital One card you'll need to both already have another Capital One card open and have downloaded the app. Unfortunately, this option isn't available to every Capital One customer, but Capital One doesn't disclose who is eligible for instant card information. In the same way, all Amex cards give the potential for instant numbers, but aren't guaranteed to give you one.

And if you're interested in a store card, make sure to ask if they offer instant use first. Lastly, when your physical card arrives by mail in 7-10 business days, be sure to activate it right away.

To get a credit card, you need to be at least 18 years old and have an SSN or ITIN, a non-P.O. Box U.S. mailing address, and some form of income. If you're under 21 years old, you will need your own independent income, rather than shared income, to get a credit card. Your legal name, phone number, email address and date of birth will be required, too.

Here's What You Need to Get a Credit Card:

• Social Security number. ITIN or passport is acceptable, in some cases.
• Street address. P.O. Box addresses are not accepted.
• Annual income. For applicants under 21 years old, this can't be shared income.
• Age. You must be at least 18 years old. If under 18, you can become an authorized user.
• Credit history. You don't need credit history to get a credit card, but a good credit score will make it possible to get the best cards.

You can get a credit card with just the bare minimum qualifications, but you may not be able to get any credit card. There are credit cards for all categories of creditworthiness, so approval criteria vary significantly from card to card.

To see what credit cards you might qualify for, start by checking your credit score for free on WalletHub. You'll also get personalized offers for credit cards that suit your personal financial situation, with approval odds included.

What to Do if You're Too Young

Even though people who are under 18 years old can't get their own credit card account, they can easily become an authorized user on an adult's account. This enables the authorized user to get a card with their name on it and to begin building credit, but they won't be responsible for paying bills.

Yes, there are several must-have credit cards right now. The Wells Fargo Active Cash® Card, for example, offers 2% cash rewards on all purchases and has a $0 annual fee. It also offers an introductory APR of 0% for 15 months from account opening on purchases and qualifying balance transfers (subject to a fee of 3% intro for 120 days, then up to 5% (min $5)). The card's regular APR is 19.99% - 29.99% Variable. 

No matter what gets charged to the Wells Fargo Active Cash card, it will provide a lot of rewards in return, and that makes it a good staple in any wallet. But there are plenty of other must-have credit cards available right now on the market. So, make sure to pick the card that best fits your individual needs.

Top Must-Have Credit Cards in 2023

These are must-have credit cards because they top their respective categories. If you can afford more than one credit card, make sure you space out your applications at least every 6 months to avoid credit card damage. With multiple credit cards, you can also adopt WalletHub's Island Approach. That way, you can compartmentalize their use based on each card's strengths.

The biggest benefits of credit cards are interest-free financing, $0 fraud liability, and the opportunity for credit building. There are also so-called “secondary credit card benefits,” which may include things like price protection, rental car insurance, and extended warranty protection. In other words, the right credit card can give a cardholder much more than simple spending power.

Some people find it easier to avoid credit cards out of fear of making credit mistakes. But the more you learn about how credit works, the more you'll see how credit cards are tools that can help you save money and gain access to great things, as well as make life all-around easier. Here are nine of the best credit card benefits to get you thinking.    

Here are the 9 top benefits of credit cards:

1. Built-In Card Network Perks The four major card networks – Visa, Mastercard, Discover, and American Express – offer baked-in benefits that many cardholders simply aren't aware of. Visa and Mastercard have different tiers of benefits for their cards. Visa's tiers include Visa Platinum, Visa Signature, and Visa Infinite benefits. Mastercard offers Mastercard Platinum, Mastercard World, and Mastercard World Elite benefit tiers. Here are the card networks' benefits at the standard level, but keep in mind that more benefits come with higher tiers. Visa: Emergency card replacement and cash disbursement, rental car insurance, $0 fraud liability, and roadside dispatch. Mastercard: $0 fraud liability, purchase protection, discounts on car rentals and hotels. Discover: $0 fraud liability, free overnight card delivery, free credit score, year-end summary, the ability to freeze your credit cards, Social Security number monitoring and new accounts alerts, and the option to get cash over your transaction total during checkout. American Express: Extended warranty, purchase protection, return protection, baggage insurance, rental car insurance, Global Assist, roadside assistance, trip delay insurance, and trip cancellation/interruption insurance.
2. Fraud Protection Credit cards are the safest method of payment when shopping. All major card networks – Visa, Mastercard, Discover, and American Express – offer zero fraud liability, so you can shop knowing you won't have to pay a single dollar for fraudulent charges. And if you lose your card, it's easy to cancel or lock it by calling the card issuer. When it comes to theft, stolen cash and debit cards have a much more difficult process, and it may take a long time to track and recover the missing money.
3. Opportunity for Credit Building Building good credit is essential to opening doors financially. Having better credit demonstrates to lenders that you are a low risk investment, which, in turn, provides access to better interest rates and loan terms. Having good credit can help you get an apartment lease, or even a job, too. If you don't intend to finance anything, you will still benefit from having good credit available as a backup for when you need it.
4. Peace-of-Mind for Potential Emergency Expenses Credit cards are great for emergencies when funds are short. They can essentially act as a small loan for when you're caught off-guard by a car breakdown, emergency trip to the vet, or whatever life throws your way. You can pay a credit card balance on your own timeline as long as you make the monthly minimum payment.
5. Ongoing Rewards & Initial Bonuses Initial bonuses are a popular perk of signing up for a credit card. You can get a set amount of cash back, miles, or points for spending a certain amount within the first few months of opening certain credit card accounts. Many credit cards also reward users with cash back, points, or miles for every purchase they make. Cash back is typically applied as a statement credit or can sometimes be redeemed as a paper check or bank account deposit. Points can be used for cash back, merchandise, experiences, gift cards, or travel. Miles can be limited to just flights on certain airlines, at least for the best redemption value. Or, they can cover a range of travel purchases like hotels, cabs, cruises and more. For all the purchases you're making anyway, there's no reason to not earn a little extra back.
6. Potential for a Flexible Payment Schedule Being able to carry a balance for a week or two allows for flexible budgeting. You can use credit cards to pay for everyday purchases, or even bigger bills, which lets you hang on to your cash longer. Many credit cards even let you pick your payment due date, which can be great if you sometimes need wiggle room with monthly expenses.
7. Free Credit Score Access Practically every credit card offers free access to your credit score now. Though the free credit score services offered by card issuers aren't updated as often as WalletHub's free credit score – and they don't give personalized credit advice – it's still nice to see your credit score when you log into your credit card account.
8. Possibility of Interest-Free Financing When you get a new credit card with a 0% APR period, you have the freedom to make large purchases and not worry about interest for a while. The average intro APR lasts roughly 12 months, ranging from 6 to 21 months. Balance transfers are also an option with most credit cards. This allows you to pay down debt faster by transferring at least some of what you owe to a credit card with a better interest rate.
9. International Acceptance It's a no-brainer to take a credit card on an international trip. Credit cards are accepted everywhere. And when your credit card has no foreign transaction fee, you'll save up to 9% in fees and currency exchange costs. Credit cards are also a good way to keep your funds safe, and they're a solid backup source of money if something goes wrong. Plus, hotels and car rental agencies often require temporary holds on funds as deposits, so using a credit card for these expenses leaves your real money available when you need it.  

Bottom Line

Credit cards open the door to convenience and savings, especially as you build better and better credit. The flipside is that if you're not careful with your finances, it's easy to get into debt and pay extra with interest. So, again, credit is a tool that can make your life easier, but your best bet to succeed with credit cards is to learn how they work and how to use them responsibly.

Before applying for a credit card - especially if it's your first one - you should know that credit cards are the best way to build credit and save money on everyday purchases. But it's also good to know that credit cards can lead to bad outcomes, such as overspending and racking up expensive debt, if used irresponsibly.

The potential for bad outcomes is why you should learn the basics of how to use a credit card responsibly before you apply for one. It's also good to know what you're going to use the card for and what your credit standing is before you apply. That will make it easier to get approved for the best deal.

We've outlined some tips below to help you maximize the pros of credit cards, while minimizing bad outcomes.

What to Know Before Applying for a Credit Card:

• Credit cards are the best way to build credit. For that reason, everyone should have at least one credit card for credit-building purposes. You don't even need to make any purchases to benefit from a credit card, if you are concerned about overspending.
• Shop around before you decide on a credit card. There are more than 1,000 credit card offers available, from rewards cards to travel cards, store cards to charge cards. So it pays to comparison shop.
• Approval can take some time. It may take up to 10 business days to receive a decision after applying for a credit card. It depends on how well you qualify for a credit card, how you apply, and how fast the card issuer can verify your information. Some applicants may get instantly approved or rejected, though.
• Use credit cards responsibly. All major credit cards report account information to at least one of the three major credit bureaus each month. On-time payments and low credit utilization will help you build a good credit score.
• Once you turn 18 years old, you are eligible to apply for a credit card. But you can only use independent income as your annual income on the application. You'll be able to use shared income, such as from a parent or spouse, when you turn 21.
• Be careful to avoid spending more than you can afford to repay. Overspending on a credit card is a recipe for debt. Credit cards have high interest rates, and we already owe more than $1 trillion in credit card debt overall in the U.S.
• If you're a first-timer, you may have a harder time getting the credit card you want. If it's your first time applying for a credit card, you may be starting out with limited credit history, so the best of the best credit card offers won't be within reach yet. Students with no credit history will have easier approval odds with student credit cards, and many credit card companies offer them. Secured credit cards are also available to people with limited or damaged credit, and can help you build up your credit score.
• Know what you want to use the card for. This will tell you what type of credit card to look for. Cash back credit cards are good for everyday purchases, while travel rewards credit cards can pay off for people who travel. If you want to finance a big purchase, look for a 0% APR credit card.

The world of credit cards can be exciting and maybe a little overwhelming, especially if you're just starting out as a credit card user. If you're having trouble digesting all the options, WalletHub's CardAdvisor can be a great tool to help you decide which credit card is right for you. Or, sign up for a free WalletHub account for more personalized credit card recommendations.

The best credit card for emergencies is a no annual fee Visa or Mastercard with a high spending limit, like the Wells Fargo Active Cash® Card, so you know you'll be able to handle a big expense if need be. Visa and Mastercard credit cards are the best because you can use them anywhere. And no annual fee (or at least a low one) is important because you probably don't want to pay for a card you're not going to use regularly. Just bear in mind that cards with fees tend to have much higher limits.

Best Emergency Credit Cards

If you have good credit, you should definitely opt for a card with no annual fee, so you won't have money drained from your account each year for nothing. And if your card has rewards on top of that, all the better.

The best credit card benefits are airport lounge access, statement credits for certain types of purchases, concierge services, hotel perks, initial rewards bonuses, and price/purchase protection. Not all of the best credit card benefits are available on every card, however. The higher your credit card's annual fee, the more likely it is to contain these top-tier benefits.

Large complimentary benefits packages used to come standard with many credit cards. But card issuers have been cutting out these perks in recent years, citing low usage. When shopping for a credit card, it's a good idea to check the card's latest benefits guide before applying. Below, we'll cover the top perks to be on the lookout for in a bit more detail.

Here are 6 of the best credit card benefits:

1. Airport lounge access
   A handful of travel credit cards have this benefit, which is well worth an annual fee – if you actually use it. Cards with lounge access will grant you free entry into various airport lounges. And depending on the lounge, that could mean free food, drinks (including alcohol), Wi-Fi, charging stations, and even showers.
2. Statement credits for specific purchases
   Some credit cards reimburse cardholders for certain expenses, such as TSA PreCheck application fees, airport incidentals, restaurant purchases, subscription streaming services, and more. There's nothing better than free money. That said, credit cards that offer statement credits for these things usually charge annual fees. So if you're paying an annual fee on your credit card, don't forget to check the benefits guide to see what purchases you might get reimbursed for.
3. Concierge services
   Though concierge service is among the lesser-used credit card benefits, many cards come with it. Depending on the concierge, they can help you make reservations at elite restaurants (even abroad), send you detailed maps of cities you plan on visiting, suggest places in a destination to store your luggage, or reserve presale tickets to events. Higher-end credit card concierges can do more, like help you find a sold-out gift for your spouse, or send a limousine to pick up your kids from school. No kidding.
4. Hotel perks
   If you're a brand-loyal person who loves climbing the ladders of hotel loyalty programs, consider a branded hotel credit card. Some of these credit cards come with complimentary “elite” status, which can give benefits like free hotel nights and room upgrades.
5. Initial bonuses
   Some credit cards offer a rewards bonus for spending a certain amount in the first few months after opening an account. The average bonus amount is about 29,788 points or miles, or $231 in cash back. Spending thresholds for these bonuses usually range from $500 to $3,000. If you're going to spend that much money on the card anyway, why not earn some extra rewards for it?
6. Price and purchase protection
   Though price protection and purchase protection benefits are becoming rarer these days, they're still great perks to have on a credit card. Purchase protection basically insures certain purchased items in case of theft or damage for a number of days after you buy them, as long as you make the purchase with the covered card. Price protection, on the other hand, does the job of price-matching after you make a purchase. In other words, if you find an item advertised for a lesser price than what you paid for it within 60-120 days of your purchase, the card issuer will refund you the difference.

Those are just a handful of the many benefits that credit cards provide. Be sure to research and compare credit card benefits before sending in an application.