Credit cards-give them a chance! (Credit Cards in general)

Member Name: Mabelthemini

Product:	Credit Cards in general
Date:	30/12/08 (83 review reads)
Rating:

Advantages: Can make you money if used properly

Disadvantages: Can cost you a lot of money if not

Credit cards are a brilliant invention-IF and it's a big IF you make them work for you and not the other way round.

0% Deals/transfers.

Generally the first thing you are told if you are in debt is 'cut up those credit cards' which is not always the most sensible thing to do, firstly if you have no balance on them you should cancel the account not just cut up the card and secondly have a look at the interest rates on your other cards/loans-sometimes transferring some or all of the balance to your credit card if its at a lower rate of interest can save you a small fortune, especially if you can nab yourself a 0% on balance transfer deal. These are getting rarer due to the 'credit crunch' but still can be found.

Purchase cover.

Another point is if you are purchasing something big eg a car or household appliance. I was listening to Martin Lewis on Radio 1 the other day and he stated that if you purchase such items on a credit card you are covered if something goes wrong for example if the company goes bust before you get the item. So it makes sense to buy items like that using a credit card, if you have a low interest rate or can pay the balance in full straight away.

Cashback cards.

If you are in the lucky situation of having no debt and a clear credit card then another good option is a cashback credit card,these give you cashback of anything from 2-5% of everything you spend on the card. Therefore just buy what you would normally but put it on the credit card ,making sure you pay it off in full every month,giving you a nice little bit of cashback each month with no interest charges for you.

Quidco.

Another hint is to join a cashback site like Quidco, these sites give you cashback for taking out a credit card-I have taken out 2 through them recieving £25 each time. Only do this if you have the self control not to actually use the cards when you get them, just activate them, wait until the cashback is paid to you and then phone up to cancel.

Get rid!

A mistake I made was to go down the route of consolidating all my credit card debt into a loan. That in itself was not a terrible thing to do but i didn't cancel the cards when they were paid off. After a few months it was a case of..oh i could do with a new something or other and there it goes onto the card and the whole cycle starts again. Some people advise freezing your credit card in a tub of water so you can't get to it quickly...haven't these people heard of microwaves??!! Just get rid of it and quick!

To sum up-yes credit cards can be a nightmare but if you can use them properly you can make money out of them!

Summary: Make them work for you