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Credit Cards – The Good, The Bad & The Ugly

Take a look in your wallet. If you’re like most people, you have a credit card or two (or three) and even a store card or two to your name—shiny pieces of plastic that can have a tremendous impact on your financial well-being.

Credit cards can be a fantastic financial tool when you are disciplined and manage them well. Managed incorrectly, credit cards could cause major financial strain and stress.

Let’s look at the good, the bad and the ugly of credit cards.

The Good:

When a credit card is used properly and responsibly, it may have many advantages for the cardholder. Some advantages to using a credit card may include:

  1. Credit cards are very useful for emergencies
  2. Credit cards are often required to hold a reservation
  3. Many credit cards offer great bonuses and rewards, such as cash rebates and frequent flyer miles (you automatically get these bonuses for just using the card!)
  4. And perhaps most importantly… if credit cards are used responsibly they can help you establish a positive credit history

The Bad:

If a credit card is used irresponsibly, it may have many disadvantages and cause the cardholder financial distress. Perhaps the most devastating result of using a credit card irresponsibly is the effect it may have on your credit record or score.

If you do not use credit cards properly and miss payments, you can develop a negative credit record. A negative credit history can prevent you from qualifying for loans including home loans and vehicle finance. A poor credit record or score could also influence many other areas of your life you have difficulty renting property, pay higher interest rates, pay higher insurance rates, and have difficulty obtaining a job.

The Ugly

Most consumers are found to carry a credit card balance month over month. Carrying a large balance can take decades to pay off.


Here Is How To Use Your Credit Cards Responsibly


  1. Pay your credit card balance in full every month
  2. Pay your credit card bills on time
  3. Apply for only credit cards that are needed
  4. Keep track of all your credit card charges by keeping receipts
  5. Check your monthly credit card statement for errors


  1. Making late credit card payments
  2. Paying only the minimum payment
  3. Exceeding your card’s credit limit
  4. Charging items that you can’t pay off immediately
  5. Owning too many credit cards

If you have gotten yourself into financial trouble and you need help to get out of debt have a look at our 5 Steps to financial freedom or sign up for our next budget training session.


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