Credit Cards

Credit cards have become a common staple of daily life. They allow purchases to be made with a simple swipe. This can be a slippery slope for some people, where ease of use and minimal monthly payments may allow people to spend more than they should. For the cautious and disciplined consumer, credit cards can be a great tool. In most cases you mist be at least 18 to apply for a credit card.

When most people think of credit cards, they probably think about the ease of use. No need to rifle through your wallet or to count out bills or change. With a simple swipe, you can purchase what ever your credit limit will allow. Credit cards can be extremely convenient, and can making tracking spending very easy with monthly bills and online tools for categorizing and visualizing spending. Many credit cards also offer rewards programs, everything from airline miles to points that can be used for cash or products. Some credit cards also offer other benefits like additional product warranties, insurance for rental cars, and many more.

For many people though, the potential down side of credit cards can outweigh the benefits. Credit card interest rates vary, but are generally between 10% to 20% for customers in good standing, but high risk customers or customers with past due payments can easily reach 30% or more. On top of the interest rates, credit cards can also charge other fees to the card holders, like late fees, annual fees, etc.

Studies have shown that consumers are likely to spend more money. It is not as painful to pay with a credit card as it is cash. This can lead to some people spending more than they should when using credit cards. Some people recommend having credit cards but only using them for emergencies, and others recommend not even having them.

For individuals that can effectively manage the use of their credit cards, they can be a helpful tool. Credit cards generally offer a 20-30 day grace period after the close of the billing cycle, before payment is due. This can allow consumers to make purchases with money that can be interest free, for 1-2 months. Also by paying off balances each and every month, credit cards can be used without any direct fees to the consumer. On credit cards with cash reward programs, consumers can actually make money (generally 1-2%) on their purchases.

Credit cards can also be very useful internationally because many of the major credit cards brands can be processed in countries throughout the world. They can be easier to handle than trying to convert cash into local currency, even though in many cases extra transactions fees and/or conversion fees may apply.