Credit cards (Credit Cards in general)

Member Name: jennikitten

Product:	Credit Cards in general
Date:	16/12/08 (35 review reads)
Rating:

Advantages: Easy to get refunds and earn freebies

Disadvantages: Easy to get carried away with

Credit cards generally tend to have a bad reputation but like all things they have advantages and dsadvantages.

I personally have not owned a credit card (I'm 22), but having had friends and relatives who have as well as reading a lot of infomration about it on the Internet, I feel less biased and have considered both sides.

Firstly the most important point is not to get over your head in debt if you can possibly help it. A lot of people criticise or look down on people this happens to, but it isn't always easy to avoid. This is especially true in countries like America where health care has to be paid for.

Secondly is the impact it has on relationships with couples, families etc. as money is a big cause of arguments and stress, and particularly debt.

Credit card companies are also set up to work against you, especially when you look at interest rates and how they try their best to get the better of you in terms and conditions, enticing you with special offers etc. The worst thing, however, is how credit cards are used in part to calculate your credit score. I think this is wrong because it encourages you to get into debt for something you don't need. If you're getting a mortgage or a car loan, for example, then it can help your credit but also has an additional point of mobility or living space. Getting a credit solely to increase your score is sadly a good way to do it, and many find it just too tempting. This is especially true as many shops now have credit cards associated with them to earn extra points, and standard credit card companies also have various prizes and points on offer.

It can be very difficult to resist spending when it seems like 'free money'. I have heard that it is a good idea to have a bit of activity on a few cards (but not too many) to 'prove' you can handle debt. Some people resort to cutting up cards or freezing them in ice to stop using them but keep the credit line open.

I have had a couple of friends in uni who have successfully managed cards and kept them open purely for the credit score, paying them off in full each month. However I'm scared to go down that route as you never know what will happen and at the moment I prefer to save where I can just in case. I prefer using my debit card; I know that this isn't as safe as using a credit card in terms of refunds etc. and being overcharged or wrongly charged by companies, but for now I'm prepared to take that risk.

Summary: I'm scared, are you?