Practically everyone who has a decent job carry a credit card in his or her wallet. Even for teenagers who have no income can carry a supplementary card. Everywhere we go we see credit card ads in the television, radio, newspapers, billboard advertisements, etc. Some credit cards are even pre-approved and mailed directly to your homes. But what are credit cards and why should you have one?

A credit card is a financial arrangement between you, the consumer or the card user, and an institution (in most instances a bank), which you can borrow instant money from the institution with the promise that you will repay them back in the future. The institution expects you to pay back over a certain time period, like on a monthly basis. Your payment will include not just the entire money you owed the institution but also an additional charge that is known as an interest rate, if you are unable to pay your full balance on time monthly.

A credit card can be an indispensable tool for today's consumers. Here are the reasons why:

1. Convenience.

You pushed a cartload of grocery to the cashier in the supermarket, only to find that you have a few dollars in your wallet. Thanks to your card, you just let the cashier swipe it and sign on the receipt to complete the transaction. Credit cards give you that freedom not to bring that much cash. In addition, many of the online-based shops and stores, such as Amazon.com, mainly accept payment using credit card.

2. Emergency Protection.

Credit cards can be an extremely helpful tool in an emergency situation such as unexpected hospitalization due to accident. You can use your card to pay for the medical bill first. Some cards even come with insurance and you may be able to claim back such expenses. Other benefits may include quick-response car towing service which can come in handy when your car conked out in the road.

3. Expense records

Have difficulty keeping track of your expense? Each month, you will receive the card statement which list the details of your expenditures. This makes it easier for you to track you monthly expense. A few card companies even offer online expense tracking and management, which is available to you round the clock.

4. Security

Carrying large amount cash in your wallet can be a problem. If your cash gets lost, there's no way you can retrieve it. However, if your card is lost or someone stole it from you, you can always ask the card company to do a termination or cancellation immediately. Most of the time, you will have a new replacement card mail to you in a few days.

5. Hassle Free Traveling

If you're a frequent traveler, whether across the town or country, or internationally, a credit card is an indispensable tool. Many card benefits are related to travelling, including car rental, frequent air miles, late check out of hotel room, fine dining, etc. In fact, many hotels required you to have a credit card for ease of room reservation and checking in. Without a card, you need to pay a heft deposit during the check in process, which means you need to carry a large amount of cash of you every time you travel. This is risky and may attract unwanted attention from snatch thieves or robbers.

When used responsibly, credit cards can help improve our daily lives. Life could be so much easier when you know how to make your card work for you.