Real Talk: Do You Need a Credit Card?

At some point in early adulthood, someone will ask: “Do you have a credit card yet?”
It might be a friend, your bank, or that Buy Now, Pay Later checkout screen tempting you with interest-free options. But before you click “Apply,” let’s slow down and talk about what credit cards actually are — and whether you really need one right now.

💳 What Is a Credit Card (and How Does It Work)?

A credit card lets you borrow money from the bank to pay for things — up to a set limit — as long as you pay it back later.
You’ll get a monthly bill for your purchases, and if you don’t pay the full amount by the due date, you’ll be charged interest. Most credit cards in Australia have interest rates between 12%–22%, which can add up quickly.

There are also annual fees (often $30–$400), late fees, and sometimes charges for international purchases or cash advances.
The upside? If you manage it well, a credit card can help build your credit history — which comes in handy later when applying for loans, renting a place, or buying a home.

🧠 Reasons You Might Want a Credit Card

• Building a credit score: Making small purchases and paying them off in full shows lenders you're responsible.
• Emergency expenses: A credit card can be useful if you don’t have savings and need to pay for urgent repairs, travel changes, or medical costs.
• Travel perks or rewards: Some cards offer frequent flyer points, cashback, or free travel insurance — but only if you use them smartly and pay off balances monthly.

These benefits only count if you use the card responsibly. Carrying a balance month to month? The interest can wipe out any “rewards” fast.

⚠️ Reasons You Might Not Need One Yet

• You’re not confident with budgeting: If you’re still figuring out money basics, a credit card can easily lead to overspending.
• You already have other debts: Adding more debt to the pile won’t make things easier — even if the bank says you’re “eligible.”
• You’re living paycheck to paycheck: The last thing you need is to owe money you didn’t mean to spend.

Plus, you can still build a good financial record using debit cards, paying bills on time, and saving regularly. You don’t have to start with credit.

💡 Alternatives to a Credit Card

• Emergency savings: Set up a rainy day fund so you don’t have to rely on credit in a crisis.
• Debit card: You can still shop online and travel using your own money, without the risk of debt.
• Buy Now, Pay Later: Only if used carefully — and always check the late fees or credit checks involved.
• Secured credit card or low-limit starter card: Some banks offer cards that are easier to manage while still building your credit history.

Remember, not all debt is “bad,” but taking on any kind of credit requires planning, discipline, and a good understanding of your own spending habits.

Final Thoughts

Credit cards aren’t evil — but they’re not free money, either. If you’re just starting out financially, it’s okay to take your time before applying. There’s no rule that says you must have a credit card by a certain age.

The real flex? Being in control of your money, whether that’s with a credit card, a debit card, or no card at all.