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Do I need a credit card?

Last Updated: January 16, 2024
4 min read

Key points about: How to decide if you need a credit card

  1. You may need a credit card to make a large purchase securely, or if you don’t have the cash you need on hand.

  2. Many credit cards allow you to earn rewards like Miles or cash back on your purchases.

  3. If you want to raise your credit score, you can build your credit history with a secured card.1

At its most basic level, a credit card is simply one of many forms of payment, such as cash, debit cards, and checks. Credit cards can offer a convenient way to pay for everyday purchases. Not only that, but some credit cards also come with rewards and benefits for spending. Still, you should weigh the costs and benefits before choosing a credit card for you.

Reasons you might need a credit card

Many credit cards offer helpful features and benefits not available with other forms of payment. You may need a credit card for several reasons, from the rewards you can earn to the security that credit cards can provide.

You’re interested in credit card rewards 

Credit cards can offer generous rewards programs. For example, if you want to earn cash back on your purchases, you can get a cash back rewards credit card. If you want to want to earn Miles on your purchases, you can choose to go with a credit card that offers travel rewards, like the Discover it® Miles Travel Credit Card. You should compare the benefits and features of different card offers to choose the best credit card for you.

See if you're pre-approved

With no harm to your credit score.*

You want to build credit 

For those with no credit score, a student card or secured credit card is a great way to start building credit history. If you want to raise your credit score, The Discover it® Secured Credit Card helps you build your credit history.1

Unlike a traditional credit card, a secured credit card requires you to put down a security deposit before you start using it. The amount that you put down is your credit limit. Then, you’ll use the card to make purchases just as you would a traditional credit card. You're responsible for making at least the minimum payment each month. Secured cards may also come with rewards on purchases. Wise use of your card may help you get other forms of credit in the future, like unsecured credit cards, auto loans, and home mortgages.

Credit cards offer you security

Credit cards may offer you more security than simply having cash on hand. Many card issuers—including Discover®—have a $0 liability policy if your credit card is lost or stolen. You’re never held responsible for unauthorized purchases on your Discover Card.2 In addition, credit issuers monitor transactions and can flag something that seems suspicious and alert you, which could help protect your account.

Things to keep in mind with a credit card

Despite all the advantages of having a credit card, there are factors that you may want to consider before getting one.

Credit cards may impact your credit score

Credit card users have the potential to accumulate too much debt if they don’t manage their accounts responsibly. That's because, according to the Federal Deposit Insurance Corporation (FDIC), your payment history and your credit utilization makes up a large percentage  of your credit score. If you have too much credit card debt or make late payments, this may impact your credit.

Credit card fees can quickly add up

Credit card accounts may come with fees and interest payments. For example, you may be charged a late fee if you fail to make the minimum payment required by the due date. According to the Office of the Comptroller of the Currency (OCC), if you use your card to get cash, your credit card issuer may charge a cash advance fee (this fee may be greater than what you might pay when using a debit card to get cash). You may also face interest charges according to the account’s cash advance APR. While Discover has no annual fee on any of our cards, other credit card companies may charge an annual fee that may cost more than the rewards you earn. If you carry a balance month-over-month, you may pay interest charges on your outstanding balance.

Many people find that the rewards and benefits of cards outweigh the costs and risks. Ultimately, credit cards can be valuable financial tools when used responsibly. By understanding how a credit card differs from other forms of payment, you can make the right choice for your needs.

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  1. Build/Rebuild Credit History (Secured Card): Discover reports your credit history to the three major credit bureaus so it can help build/rebuild your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build/rebuild credit.
  2. $0 Fraud Liability: An “unauthorized purchase” is a purchase where you have not given access to your card information to another person or a merchant for one-time or repeated charges. Please use reasonable care to protect your card and do not share it with employees, relatives, or friends. Learn more at Discover.com/fraudFAQ.
  3. *Card: No Credit Impact for Pre-Approval: There is no hard inquiry to your credit report to check if you’re pre-approved. If you’re pre-approved, and you move forward with submitting an application for the credit card, it will result in a hard inquiry which may impact your credit score. Receiving a pre-approval offer does not guarantee approval. Applicants applying without a social security number are not eligible to receive pre-approval offers. Card applicants cannot be pre-approved for the NHL Discover Card.
  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.