First rule to follow: protect your credit score. When you use your credit card to make purchases, you have a certain amount of time (usually one month) to pay that card off or you will be charged interest. If you are late making the payment you're then charged late fees. Also, any late payment lowers your credit score.



Another term that you need to know when dealing with credit cards is grace period. A grace period is the time that you have to pay off your monthly statement before you will got charged for interest. There are three types of grace periods commonly associated with credit cards. They are: a typical grace period, a full grace period, and no grace period.

With a typical grace period, you pay interest on all new purchases unless you have paid off your previously monthly balance. A full grace period means that you never pay interest on new purchases regardless of weather you paid off your balance the previous month. No grace period means that you pay interest on new purchases weather or not you have paid off your previous months bill. The way you can figure out this information is to call your bank and ask. If you don't have a credit card yet, it's always better to apply for one with a full grace period.

If you like to shop online, it's really easy with credit card. When you use it online you do not have to worry about people stealing your credit card information anymore. Many credit card companies give you a different card number for online purchases so that your real credit card information is not on the Internet.

Another feature of credit cards you can take advantage of is they can protect your large purchases. Let's say you go to the store and buy a flat TV panel. Some credit cards have 'extended warranty' option. It means that if your flat screen has 1 year of warranty, (if you purchased it with your credit card) visa or mastercard could add another year of warranty to your purchase. If your flat panel breaks one month after your manufacture warranty expired, you can pay the repair with the same credit card and apply for deduction at "claims department" of your bank. But before doing that, check with your credit card company, if your card has this option (its usually default with high range cards like: gold or platinum).

When used the right way a credit card can be a good thing to have. But you have to be responsible and use caution.