Credit cards have often received a bad wrap over the years.

If not used responsibly that can certainly cause long-term debt for those who may be spending more than they can repay. However there can be a number of benefits to owning a credit card if used smartly.

Save interest on your home loan

If you have an home loan offset account, using your credit card for everyday expenses means you keep more funds in your offset account, saving you interest on your home loan. Similarly, if you have a savings account, using a credit card means you have the potential to earn more interest on the amount that's in your savings. Just be sure to go with a credit card that has at least 44 days interest-free, allowing you time pay off the balance each month.

Large purchases

A credit card can also be beneficial for larger one-off purchases. If you need to make a purchase on a large item or even a small home reno project, then a credit card can be ideal when you know exactly how much you'll be spending and how much interest you'll likely be paying.

Improve your credit score

Most people will generally have a credit score (or rating) which is based on your loans and debts – how much you borrow and your repayment history. Owning a credit card can help to improve your overall credit score, if used correctly. Through making repayments on time, managing your limit and paying more than the minimum repayments, you can prove to a lender you are a great applicant for credit, helping you to secure other financing such as a home or personal loan.

Read our article What is a credit score and does everyone have one?


An emergency fund may not be something you had considered but can be lifesaving when you need it most. While it's always helpful to have some of your own savings split out separately into an emergency fund, you may not have enough when the time calls. A credit card can be a helpful resource to have when you need cash quickly.

Earn rewards

Depending how much you spend, a credit card with the ability to earn points and rewards may be a suitable option. Generally speaking, for every dollar you spend you can earn points that go toward cheaper air fares, cashback on purchases or deals on entertainment.

Be sure that this is the right card for you though as reward cards can often have higher interest rates and fees.

Learn more about Auswide bank's range of credit cards

Auswide Bank Ltd Australian Credit Licence 239686 is the credit issuer. This is not an offer to lend – approval is subject to credit assessment criteria. Terms, conditions, fees and charges apply – full details on application. This information provides general advice only. We do not provide advice about this product based on any consideration of your personal objectives, needs or circumstances.

Published: Thursday, 12 May 2022