What are the benefits of having a credit card when the interest rate I’ve to payback is so high?

Hi anon,

Credit cards are a way to capture value that is otherwise left on the table.

Think about it this way: If you're going to pay $5 cash for that Filet O Fish meal, that's $5 gone. If you use a credit card, you'll get points/miles or cashback, and when the bill comes, it's still only $5 that you have to pay.The miles/points/cashback can be accumulated for redemptions or something similar. So you're really maximizing things when you pay with a credit card.

The danger is if you cannot repay in full. That's where the interest really hurts you. Most cards have an interest free period of around 30 days where you can settle the payment, and if you don't settle in time, you get trapped in a vicious cycle.

If you have a habit of not paying in full, or can't see yourself paying in full, a credit card would probably be more harm than good.

You will only need pay the interest if you are late for repayment.

Benefits:

1. More secure than debit cards as money is not directly deducted from transactions (able to dispute and cancel if fraud)

2. More rebates/rewards than debit cards

3. Build credit score