Should I be afraid to use credit cards?

Sometimes you will need to budget for a major life event, like buying a car or setting up a business. Regardless of how well you have your spending under control, you will probably need a bit of extra help to raise the larger sums of cash needed for these investments.

We’ve spoken to Catriona, who works in retail. Catriona is saving for her dream wedding, and balancing the pressure to spend thousands on the ‘perfect day’ with ambitions to start her own business in the future. She’s set a sensible budget for her wedding and is apprehensive about debt, but wants to find out whether getting a credit card could actually prove a wise move.

To give her some clarity, we’ve enlisted money expert Iona Bain to explain when borrowing can be smart and how to approach taking out credit.

There can be social pressure to have a 'perfect' wedding day.
Catriona asks for advice about using credit cards and getting into debt.

Let's recap - credit cards

  • A credit card allows you to make big purchases by borrowing money (credit) from your bank.

  • When you take out credit, you agree to pay the money back within an agreed timescale and with interest.

  • As far as possible, only borrow what you can afford and aim to pay off the balance in full every month (not just the minimum repayments).

  • Banks will look at your credit score when they decide whether or not to lend to you. Your credit score shows how good you have been at paying back previous loans.

  • If you’ve never borrowed before, you can build up your credit score by taking out a credit card, borrowing money and paying it back on time.

Catriona bought her wedding dress for £5 and is embroidering it by hand.

Iona’s top tips

  • Borrowing is not always bad, as long as it’s done responsibly and for a specific purpose.

  • Always try to use savings instead of debt wherever possible.

  • You do not need to get into debt to have a wonderful wedding day. Nobody will care about the bill if your day is filled with happiness and love.

So what did Catriona make of Iona's advice?

"I will definitely consider a credit card in the future as it seems that it is necessary to get a good credit rating, and I will take on board the tips on how best to use a credit card."

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