Pros & cons of credit cards

Pros

• Flexibility. If you have a big purchase to make, a credit card can be a financial "buffer" – letting you buy it and then repay it over time. If it’s used wisely, it can be interest free.

• Convenience. Credit cards allow you to buy what you need, when you need it. You can use them to shop in-store, online and overseas, with security features to protect against fraud.

• Rewards. Everyone loves perks. A credit card can help you get frequent flyer points, cashback on your groceries, flight upgrades or even gift cards.

Cons

• Debt. Credit card interest adds up quickly if you don't pay your balance on time, which could cost you hundreds (or thousands) of dollars and take a long time to pay back.

• Can be expensive. Always compare the interest rate of credit cards with that of personal loans. Sometimes it is better to obtain a personal loan from a bank at a lower interest rate to make a big purchase. 

• Sneaky fees and surcharges. Some businesses add a surcharge to credit card payments, which can be 1–2% of the total purchase cost.

Bottom line? Credit cards have a mix of great perks and understandable risks. A good rule of thumb is to compare credit cards to ensure you get one with the features you need, while having a plan for paying it off and using the benefits.