Credit cards are obviously a boon for business establishments. Less cash is required on business premises. Credit cards encourage consumer spending which adds to profitability for sellers. Transactions can be completed quickly and efficiently and a record of the transaction is easily available. For consumers, credit cards are quick and easy to use at local retail establishments and are absolutely necessary for any purchases that one would want to make over the Internet. They don't require holders to carry cash for immediate payment and they also serve as a source for convenient record keeping. However, what dangers lurk for those that use credit cards?

Since they can be used quickly, one is tempted to make impulse purchases that might be the subject of a second thought if one had to part with cash. If a credit card is not paid-off monthly than interest charges can accrue which adds to the cost of purchases. Interest rates vary widely for credit cards and consumers would be well advised to pay attention to those charges. If an increase is noted, a call to the credit card company is in order to determine what has occurred. Sometimes credit cards in a wallet or purse provide a sense of financial power that might not be present if only the cash that was available for purchases was carried. Credit cards often encourage the holder to buy more than would normally be purchased with cash.

Credit cards do provide a financial cushion if an unplanned event occurs and a purchase is required. Such events might include an emergency car repair, the purchase of items essential for business or personal use that was not anticipated or even the opportunity to take advantage of a special sale or offering. One or two credit cards is a necessity, more than that might introduce problems. Our credit worthiness is often determined by the amount of credit card debt that we carry. Credit reporting agencies monitor our credit card debt on a continual basis and too much debt might prohibit us from purchasing a ?big ticket? item like a car or house. Additionally, too much credit card debt might result in a higher interest rate on our present accounts. It's hard to believe, but the higher our debt, the higher the interest rates on our accounts will be.

Credit cards also offer the opportunity to build a good credit reference. Timely payments and a debt that is maintained within our means will reflect positively on our credit rating. The higher our credit rating is, the lower the interest charges that we pay for credit.

The bottom line is that credit cards are essential, necessary and worthy if the credit that is extended to the user is not abused. Monitoring our credit card debt is critical. Moderation in the use of credit is the watchword as it is with all things in life.