Use a Credit Card to build credit 

Used well, credit cards could help build your credit and credit score. When you spend with your card regularly and make all repayments on time, it demonstrates financial responsibility to potential lenders.

Boost your spending power

With a credit card, you’re not limited to the funds in your current account. If used responsibly, credit cards can increase your spending power. They allow you to cover larger purchases when you need to, and repay the balance over time in more manageable instalments.

Be prepared for emergencies

No matter how carefully you manage your money, unplanned expenses are always possible. A faulty boiler, a broken down car or a packed-up washing machine, for example. With a credit card, you have the flexibility to cover those surprise costs and repay them later – making emergencies more manageable.

Book your travels with confidence

When you’re booking accommodation or car hire, some hotels and rental companies will ask you for a credit or debit card to hold funds for the reservation.

These amounts can be quite large. And all the time the funds are being held, they’re not available for you to use. With a debit card, you may not have immediateaccess to the amount you need. One of the benefits of using a credit card, however, is that you have a line of credit you can use straight away, up to an agreed credit limit.

Booking by credit card also gives you more protection when things go wrong. For instance, if a travel company goes bust before or during your trip and you need a refund. Getting your money back through a debit card is possible, but it’s a more complicated process.

Earn credit card rewards

Many credit cards allow you to earn rewards with every purchase made on your card. With an American Express® Rewards Card (E.g. American Express® Preferred Rewards Gold Credit Card, 75.2% APR variable), these rewards could be cashback, air miles or rewards points, which you can spend on retail and travel treats as well as other special experiences. 

Earn cashback with your credit card

Cashback is one of the most common benefits of paying with a credit card. It allows you to earn money back on purchases with the relevant card – effectively giving you a small rebate on all eligible payments. It’s a straightforward way to earn cash rewards for your everyday purchases, big and small.

With an American Express® Cashback Credit Card (E.g. Platinum Cashback Everyday Credit Card, 30.7% APR variable), you’ll receive a percentage of each Card transaction back as a reward.

The more purchases you make, the more cashback you can earn. This then accumulates in your account and is paid to you as a statement credit every year, around the anniversary of your account opening.

Discover more about cashback and how it works here.

Get security with Credit Card protection

From account monitoring to online safety protection and fraud alerts, American Express gives you the peace of mind to shop confidently. Read more on our Card security features here. 

Another advantage of being with American Express is 90-day Purchase Protection. That means if your eligible item is either stolen or accidentally damaged up to 90 days after you've bought it, we'll reimburse you up to £2,500 (Excess of £50 applies and terms, conditions and exclusions apply).

Collect air miles 

Love to travel? Air Mile Credit Cards (E.g. American Express® Preferred Rewards Gold Credit Card, 75.2% APR variable) can take you places. They allow you to earn Frequent Flyer points on every purchase, which you can redeem for flights, hotel bookings and car hire. Many of our Credit Cards also offer luxury travel benefits, such as complimentary lounge access and travel insurance.

American Express® Cards can be used around the world – the ultimate travel companion.

Benefits of having multiple Credit Cards

It can be beneficial to have more than one credit card, provided you use them correctly and responsibly. Having multiple cards allows you to:

• Maximise your rewards: Different Cards have different benefits, allowing you to adapt your use and reap rewards that suit your lifestyle.
• Increase the credit limit available to you, which could be useful in emergencies.
• Lower your credit utilisation rate: A high credit utilisation rate could indicate to lenders that you’re relying on credit. This is calculated as a percentage by dividing your total debt by your total available credit. It’s recommended that your rate stays under 30%.

Remember: when weighing up the benefits of getting a credit card, take time to consider the fees and possible interest charges, as well as how much you can afford to repay each month.

Disadvantages of multiple Credit Cards

On the flip side, keeping on top of multiple cards could become confusing and lead to a build-up of debt. It is important to be disciplined and organised if you intend on having multiple cards to ensure payments are not missed and credit limits are not exceeded.

While having more than one card can aid your credit utilisation score, it could also impact it negatively if you don’t carefully monitor your spending and repayments. Borrowing too much or missing payments will affect your credit score which means you may find it difficult to borrow in the future.

Remember that applying for multiple credit cards in a short space of time could negatively impact your credit score, too.

How to use a credit card responsibly

Before you apply for a credit card, it’s important to carefully consider:

· How much you can realistically afford to borrow.

· How you plan to repay all your purchases in a reasonable timeframe. Paying the minimum every month will therefore   take you longer to repay what you owe and will ultimately cost you more.

A credit card can be a flexible way to pay for expensive items and emergencies – as long as you borrow within your means and make your repayments on time.

Make sure you’re fully aware of any fees and interest charges before you apply for a card. And don’t use the card for expensive items without a plan for how you’ll repay the balance promptly.

Find the right Credit Card to suit your lifestyle

As well as thinking carefully about what you can afford to borrow, it’s also important to consider your lifestyle when choosing the right card for you.

Are you a frequent traveller? If so, you might want to look at a Card that gives you reward points to spend on hotel stays, flights and transport.

Do you make lots of small, regular purchases? A Cashback Credit Card could help make your everyday spending more rewarding.

Or do you enjoy living life to the full? Then a Card offering rewards – to exchange for travel perks, treats and experiences – could be right for you.

Discover more about our different Card types and find out how to apply here.