To be used responsibly! (Credit Cards in general)

Member Name: ItalianFran92

Product:	Credit Cards in general
Date:	08/01/09 (60 review reads)
Rating:

Advantages: No need for cash, safer shopping, buy things when you need them

Disadvantages: Interest rates, debt, addictive, to easy to apply for one

Credit cards, are they useful or harmful?

There are many reasons why credit cards are a good idea. Firstly, when you're out and about it's safer to carry cards rather than money as if you lose your purse/wallet or it gets stolen, there are many companies and the credit card companies themselves that will cancel your cards as soon as you report them lost. Marks & Spencer offer a service (or at least they did the last time I looked) that allow you to cancel all your cards at the same time instead of cancelling each card individually, other places offer similar services.

Credit cards are also good if you have your eye on something you want to buy or need to buy sooner rather than later. If you know that when you get paid you'd be able to purchase the product but at the moment you have no money, you can buy it with your credit card and have it as soon as, then when you get paid you can simply pay off your credit card bill. Plus, if you pay it off by the end of the month that you used the card, you pay no interest.

Credit cards also provide safer shopping. When buying something like a sofa or something online, things can go wrong and you need proof of your purchase. If your order has to be cancelled because the company goes bust (which is rather topical now due to the Credit Crunch) etc. then by having used your credit card you will get a refund. If you had purchsed by cash or debit card, then getting a refund may have been harder or you might not have got all or any of your money back. Credit cards can definitely give you peace of mind especially on bigger purchases such as a holiday or furniture.

However, credit cards have their dark side too. Interest rates can be high, very high and the more months that go by without you paying your bill the higher the interest and the more money you have to pay. Plus, credit cards can be very tempting when you have no money but really want something. It's very easy to just use your credit card, anyone can apply for one, it isn't until you get the bill you can't pay until you start to worry.

To sumarise, credit cards are good if you know by the end of the month you can pay you bill, there's no point getting into debt. Credit cards should allow you to spend the money you know you will have before you get it, to allow you to buy things a few days/weeks earlier than pay day. Like alcohol, use credit cards responsibly :)

Summary: Only use if you know you'll be able to pay the bill when it comes!