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Credit Pros and Cons

As with anything there are advantages and disadvantages to using credit cards. Your informed use of credit cards begins with understanding these.

Advantages

Immediate Access: Need a new set of tires? Credit can help with an expensive, unexpected emergency and give you the flexibility to pay it over time.

Security: Lose cash, and it's gone. Lose a credit card, and it can be cancelled. Also, if you report a lost or stolen card promptly, you're protected against its unauthorized use.

Record Keeping: Your credit card statement is an itemized list of your monthly expenditures, which can be helpful when it comes to budgeting.

Convenience: Credit cards are accepted at more places than checks, and they're generally faster to use.

Bill Consolidation: Bills can be paid automatically via credit card, consolidating several payments into a single lump sum.

Rewards: Using a credit card with a rewards program may earn you benefits like free travel.

Disadvantages

The main disadvantage to credit card usage is its cost to you in interest and fees. Wise use of credit means understanding those costs and acting accordingly. Keep track of your spending to ensure that you can repay your credit card bill in full when it comes due each month.