Credit cards are a definite necessity especiallly since so much is now done online with regards to payments of accounts and shopping. Perhaps, someone could give first time applicants some tips.

Just watch out you don't go mad with one, that's all!!

I agree that a credit card is a good tool for quick and easy purchases and to build up your credit score as well. The most important thing is to pay off your balance every month when the bill comes in. There is NO sense in having interest added and paying even more money for your purchases. Also, don't get more than 3 credit cards. That is enough.

The consumer protection that credit cards offer is the reason I got one - after getting shafted by Comet when I bought a widescreen TV and home cinema sound system - which was all recommended by the salesman but not properly comptible, and suffered quality issues. I paid by debit card so Comet could be as difficult as they wanted to be. If I'd have paid by credit card, I would have been in a better position of control to demand a refund.

If you need a card then at least know your limits!! One card should be enough otherwise you can really pile on that debt!

If you are looking for a low interest rate offer (i.e. 0% for 12 months) then make sure you don't use the card during that 12 months period. The credit card company piles on all the interest and fees on any purchase after a balance transfer and will not apply any of your money to those purchases until you balance transfer debt is taken care of. Either use a different card, cash or check. A higher interest card shouldn't be a concern if you are disciplined enough to pay it off each month.

Credit cards work well, but research shows people are more likely to overspend when they're not using actual cash. It's harder to plop down some cold hard cash than it is to simply sign for a purchase.

lyricb,

You're right - if we have the cash we often think twice, but if it's a card then we spend freely. The card is a good tool for an enhanced credit report. If a person can be disciplined enough to use the card only on planned purchases and pay it off at the end of the month, it can help to track expenses and show up favorably on a credit report. Cash doesn't typically have the capability of doing that.

The conundrum will always be how disciplined a person actually is.

Yeah I'd say limiting yourself to one card only and never using it to the hilt is the best advice when it comes to these cards. Theyre too easy and you tend to spend too much without noticing. Plus interest rates are often so high that its almost funny

No one NEEDS a credit card. People survived for years with out them. As for consumer protection, most banks offer something similar through their debit cards (check with your local bank to see what protections they offer).

If you are going to get a credit card then remember two things:
1. Don't spend the money unless you already have the money.
2. Always pay off your card before the end of the billing cycle.

In the voice of Yoda. Kelkat - wise they are. Good advice and voiced susinctly. Kudos!!!!

Actually, I disagree Kelkat - debit cards simply don't offer the same levels of consumer protections that a Credit Card does.

Last year I got badly burned at Comet when mis-sold a home theatre system that wasn't probably compatible. I bought it on a debit card, and because Comet played close to the line, rather than over it, I couldn't demand a refund without taking the matter to court.

However, if I'd have bought it with a Credit Card, I could have taken the issue to the Credit Card company, who would have been much more likely to ensure I received a refund.

Credit Cards really do have extra consumer protections over a debit card, and personally I always make large purchases on a credit card these days - to be cleared at the end of the month - simply for those extra protections.

Once I got burned spending a couple of grand on a debit card, I don't plan to ever repeat that.

ADDED: - Also, using a credit card is a useful way to develop a credit history, especially if you feel a need to develop one.

I was unemployed for years and couldn't get any credit, even though I could put funds towards repayments - so once I went self-employed one of the first things I did was ensured I got a company credit card in my name, so as to develop a credit history to allow for a credit record to develop.

Brian,

Good point. I love using my debit card, but especially for online purchases I would never use it. I need the protection the credir card can provide. Nice distinction made in your post.