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Getting a credit card is often an easy way for most people to borrow money over a certain period of time. But like any form of borrowing, it has advantages and disadvantages:


  • Flexibility
  • Spreading the cost
  • Interest-free borrowing
  • Safe spending with Purchase protection
  • Improve your credit rating
  • Managing your current debts
  • Gain rewards
  • Avoid foreign transaction fees


  • Risk of getting into debt
  • Could damage your credit score
  • Penalty fees
  • Penalised for withdrawing cash
  • You won’t always get the advertised rates
  • Promotional offers are only limited

It’s always worth weighing up these pros and cons before committing to borrowing money in this way, as you can figure out whether it really is the right option for you, especially if you’re feeling unsure.

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Types of borrowing

To help you make up your mind, it’s worth outlining the various options available to you when it comes to borrowing money:

  • Credit card – Provides you with a credit limit you can spend but will incur interest on a monthly basis. You can also get promotions that will allow you to borrow interest-free for a certain period of time, otherwise known as a 0% credit card
  • Personal loan – a personal loan is a set amount that you can borrow as a lump sum. You will be given a repayment plan and will be expected to make every payment, otherwise you might face penalties. The interest is worked out in advance and added to the repayments so you know how much you will be paying on top from the start
  • Overdraft – as part of a current account, your bank or building society will often give you the option of an overdraft. This gives you a buffer in case you accidentally have a payment that takes you into minus figures in your account. An overdraft will normally have a fee for using it, but if you’re a student you can often get an interest-free overdraft during the time you’re studying

Whilst a credit card gives you a more flexible type of borrowing, a personal loan allows you to receive a larger lump sum all at once, which comes in handy if you are planning on making a high-value purchase.

Equally, an overdraft gives you a flexible option to overspend, but isn’t necessarily the cheapest way to borrow in comparison.

Advantages of a credit card

  • Flexibility – borrowing this way is very flexible, allowing you to take on a variety of expenses as and when you need to make them. This can be a useful way of organising your finances, as long as you can match repayments to ensure that expenses are paid off
  • Spreading the cost – this is the main reason for most people as it allows them to take a number of expensive items and pay them off over a few months, instead of paying it in one lump sum
  • Interest-free borrowing – with 0% credit card promotions, you can easily borrow money without having to pay interest on top. As long as you stick to the terms of the purchase card or balance transfer card, you can pay off the full amount before the promotion runs out and not pay a penny more
  • Safe spending with Purchase protection – section 75 of the Consumer Credit Act means that any purchase valued between £100 and £30,000 is protected, meaning that if an item is faulty, damaged, or the company you purchase from goes bust, you can claim through your card provider instead
  • Improve your credit rating – they’re a valuable way of improving your credit score too. A credit builder card in particular will make small improvements to your credit score, as long as you can still make monthly repayments
  • Managing your current debts – a balance transfer credit card can help with previous debt that you’re yet to pay off and give you a 0% period where you won’t accumulate anymore debt for a limited time. It can even help pay off multiple debts by combining them onto one card, before making monthly repayments in your own time
  • Gain rewards – it might not be the most important reason to get a credit card, but getting additional rewards can still be a welcome bonus. Rewards might include cashback, air miles, Nectar points, Clubcard points or even concierge services when you travel
  • Avoid foreign transaction fees – this doesn’t apply to all cards, but travel credit cards are ideal for spending abroad as you avoid foreign transaction fees completely, meaning you’re not left with a big bill if you’re a frequent flyer

Disadvantages of a credit card

  • Risk of getting into debt – while a credit card is a very flexible way of borrowing money, it can also easily lead to overspending, especially if you have a big credit limit. The temptation of spending money available to you can sometimes be too much, leading you to struggle in making repayments
  • Could damage your credit score – if you miss or make a late payment, this can actually damage your credit score instead of improving it. This can have a knock-on effect in the future of limiting your access to financial products, unless you take steps to improve your credit score
  • Penalty fees – missing a payment or spending over your credit limit can incur fees or charges that you will have to pay on top of any monthly repayments you’re making. More information about credit card penalties can be found here
  • Penalised for withdrawing cash – unlike a current account, withdrawing cash using a credit card will usually incur an automatic fee. That means paying by cash through the card isn’t really an option
  • You won’t always get the advertised rates – while an eligibility tool such as moneymatcher might point you in the right direction of a credit card, it’s only once you apply will you be able to see the APR and credit limit you will receive. Risk-based repricing occurs when a provider discovers an issue on your credit file, such as missed payments or even a CCJ. You might get a higher APR or even a shorter promotional period, depending on what the provider decides
  • Promotional offers are only limited – while a 0% interest-free card can be enticing, the offer is only for a limited time. This means you will have to pay off the amount within the time given, or face high interest payments after it finishes

Am I eligible for a credit card?

To check if you are eligible, the first step is to find out your credit score. This can give you an early indication of your likelihood of acceptance, based on your previous financial history.

If you’re happy with your score, it’s worth checking your eligibility using our free moneymatcher comparison tool, which will point you in the right direction. Just enter a few personal details and wait for those tailored results to roll in. The best bit is it doesn’t even affect your credit score.

Once you’ve checked both of these things and you have been given some good options that you are likely to be accepted for, you can go ahead and apply. You can browse through our credit cards using the link below. Good luck!