Credit Cards are an expensive way to obtain long term credit. They can, however, be very convenient for short term cash shortages. They have their uses and never overlook some of the benefits that credit cards can provide. By law the credit card supplier must offer additional protection to the consumer using their card. This can be reassuring if you are spending a lot of money with a supplier you are not familiar with.
Have you ever bought a product and then had problems with the supplier? If you purchase goods or services and you paid using a credit card then the credit card company may be held responsible along with the seller for the supply of the goods or services. If the supplier were to go bust before they have supplied you with the goods you ordered then the credit card company should either reimburse you the payment or supply the goods you ordered. This would usually mean you should not lose money.
There are some conditions for you to get this additional protection and you should check to establish what the current legal situation is where you live. Always consult with a qualified professional before taking any action where you consider the legal or financial situation to be important. As a general guide it seems to be that if an item costs more than £100 you would be covered by the credit card company.
The greatest other benefit of credit cards is their flexibility for obtaining credit and in how you go about repaying the debt. You have a constantly available credit facility in your wallet so that should your car break down or you need to find a plumber to fix a leking pipe in your home then you don't need to wait until you have the cash. Very fortunate if you have water pouring out of the pipe. You don't have to repay the debt over any specific timeframe. There is no payment plan, other than making the monthly minimum payments so you can decide how quickly you repay the debt.
Another big benefit of using a credit card is that should you find that you can afford to pay off the whole outstanding balance then if you do so before the payment date is due then you will have had a period of interest-free credit on your purchase. It's also worth looking out for what is known as a cashback credit card whereby you would get a refund of a small percentage of the amount you have spent.
Sidney Winthrop is a regular contributor to the <a href=http://www.moneywell.co.uk/>personal finance</a> website and blog at http://www.MoneyWell.co.uk. The original article can be read at <a href=http://www.moneywell.co.uk/CreditCards/Benefits-creditcards.html/>Moneywell Personal Finances Guide</a>
