Free money anyone? (Credit Cards in general)

Member Name: jonnythurston

Product:	Credit Cards in general
Date:	11/11/09 (14 review reads)
Rating:

Advantages: Rewards and bonuses can be great.

Disadvantages: Can ruin your life before you know it if you are not extremely careful

Credits Cards

This is a tricky topic to discuss really, becuase these things can cause major-major problems for some, but if handled correctly can be really great.

Credit cards work by buying things on credit, so you buy whatever it is you want and don't have to pay for it until the end of the month. This is fine if you afford to pay off whatever it is you bought that month with your wages, but if not, then you area starting down a slippery slope.

The main flaw with these cards is that the people that really need these cards should not be the ones to get them. If you cannot afford to buy something, you shouldn't be buying it in the first place. You should NOT be buying it on credit. Once you are in debt on a credit card you are in major trouble, as the interest on these card can be huge(easily 30%+) on some cards. If you miss these payments, you can quite easily get to the point where all you are doing is paying off the interest rather than the actual capital, so you will never get debt free. It is usually better to get a cheap loan than try and battle with credit card interest.

However if you ALWAYS pay off your monthly debt and only spend what you can afford, then these cards are great. They offer you protection on any purchases over £100, and many offer cashback deals and rewards when you spend money on them.

Overall I think credit cards have their place, but unfortunatley the people that should steer well clear of them don't and extreme caution should be used when going near them.

Summary: I am still undecided, they can do serious harm to some