Updated September 2026: in 2018 I shared my view that credit cards are a financial risk, because their "discounts" come with minimum spends and low caps, and their charges are high. I have rewritten it into a guide to reading card offers and using a card safely.
I held two credit cards from major banks. My view was that a credit card is one of the riskiest parts of a financial plan. You expect freebies, but each offer comes with terms, and the charges on transactions can be high. A typical example: "50% off on all clothing and electronics", but only on orders above a minimum amount, with a small maximum discount per card, so you spend a lot to save a little, and only within a set period.
How should you read a card discount offer?
- Minimum order value: the spend needed to qualify.
- Maximum discount: often a small fixed amount, whatever the headline percentage.
- Frequency limit: once per card, per month, or per offer period.
- Eligible merchants and dates: and whether EMI purchases are excluded.
What charges catch people out?
Interest on unpaid balances, which is high and often charged on the full amount from the purchase date once you pay less than the full balance. Also late payment fees, cash withdrawal fees with interest from day one, foreign currency markups, and fees on some wallet loads or rent payments. The bank's schedule of charges lists them all.
Is a credit card always a risk?
Not if you pay the full statement balance every month. Used that way, a card gives an interest-free period, purchase protection and sometimes useful rewards. The risk comes from carrying a balance or spending more because it feels free.
How many cards should you have?
Enough to cover your needs and a backup, and no more than you can track. Each card is another statement to check and another set of terms to know.
What is the simplest safe habit?
Set up auto-pay for the full balance, and check each statement for charges you do not recognise.