7 Ways Credit Cards Can Be Good For You

You read a lot these days about the debt crisis in our country and how many people have way too much credit card debt (often, on top of house payments they can't afford). I'm going to take a little different approach in this article. Yes, if you let them get control of you, credit cards can cause you much grief. But if managed properly, credit cards can be beneficial to you. Here is my list of the top seven ways that credit cards can be good.

1. Credit cards provide security in case of emergencies. There are going to be times in your life when you have to make an emergency payment. Or maybe it's not an emergency, just something that needs to be paid for which you absolutely don't have the money. In these instances, having a credit card can be a life saver.

2. They can help you build your credit rating. Of course, they can also help you ruin your credit rating. The key here is discipline. You must make it a priority to make timely payments on your card. Don't be late a single time. Paying your bills online may help you stay on top of things.

3. Credit cards travel light. They mitigate the need to carry excess cash. It is much more convenient, and safer, to walk around with a credit card in your wallet than it is a lot of cash. You are much less likely to get mugged over a credit card than cash.

4. They can be canceled. If you lose or have stolen a credit card, you can call your credit card company and cancel the card. No harm done. Try doing that with cash. It just doesn't work. Who would you call? Cash is what you might call a bearer security - whoever has it in his hands, owns it.

5. They give you flexibility. Credit cards give you the ability to make a purchase now and spread payment out over time. Unfortunately, this feature of credit cards is what gets most people in trouble. You are best served by exercising great discipline when it comes to buying things that are not necessities.

6. Credit cards can generate rewards. These can come in all kinds of different forms. Some credit cards give cash back. Some give airline miles for reduced or free flight time. Some let you earn free stays in hotels. But don't get caught up in using your credit cards just to earn rewards. You're better off using your card lightly and paying your balance every month than you are spending more than you can afford just go get a reward.

7. They can provide you with business funding when there are no other sources available. Many businesses have been started with credit card debt. It's definitely not the cheapest form of financing, but it's there if you need it.

So there you go - seven reasons why credit cards can be good for you. There was never anything inherently bad about credit cards. The problem is that people get carried away. It is very easy to forget that you are borrowing money when you use your credit cards. Debt is best left for times of emergency or when making major, important purchases. If you maintain your discipline, your credit cards can be very strong allies. If you find yourself crushed by credit card debt, then it might be time to consider a consolidation loan, in which a loan is taken out to pay off all of your credit card balances. Once that is done, forget about using your credit cards and just concentrate on paying off the loan.