Silly question – we all know what a credit card is – don't we? Or do we?

Oddly enough many of us don't. So many people don't really understand the concept of credit cards. They treat their credit cards as free money that is never to be returned. Thus all the discipline, which would otherwise have been exercised with spending hard-earned money, flies out the window

On the surface of course a credit card is a small piece of plastic that fits easily in our wallet and is always ever ready to help us out when we've run out of the folding stuff. Well, of course. it may be just a 'piece of plastic' but it's a very powerful piece of plastic – it's virtually a compressed form of ready cash. Let's define it as the outward manifestation or token of a credit system that allows us to borrow money from a bank or similar institution 'on the fly' so that we can shop without messing with those old fashioned greenbacks.

To get a credit card all you have to do is fill in a simple agreement with your bank or card supplier who will then smilingly and perhaps a little smugly hand you that wondrous scrap of plastic – the credit card. This innocuous little card contains a magnetic strip cunningly encoded with all your personal details deemed necessary to protect, not yourself, but the supplier.

You have a wide choice of card suppliers – it is after all a highly lucrative business for these people and there is no shortage of takers. They have become, unfortunately, household names: American Express, Citi, Diners Club, Discover, JCB, Mastercard and Visa card, all of which will be happy to provide you with their colorfully branded piece of shiny near indestructible plastic. In addition your local corner banks are in on the game, tied up with these major players and issuing their own cards.

Thus armed then you are authorized to make payments wherever and whenever you wish – for shopping at the local mall, buying your airline ticket to Europe, bidding in the auctions at eBay, you can use it with any retailer who has a merchant account with the bank or organization issuing the card. And or course, any of the thousands of ATMs that litter our highways and byways, will happily disgorge real money whenever you feel like slumming with the cash crowd.

Trouble is of course, it is not, as many users kid themselves, your money. It belongs to the bank and, come the end of the billing period, they will, not unnaturally, want all or most of it, back. If you give it back to them in full, all well and good, you pay no interest. But if you can't repay it on the day they specify, then they will be somewhat peeved and hit you with a late payment fee if applicable and a sizable swag of interest. And, of course, still want the bulk of their money back. Well, banks are like that aren't they?

And there's the rub as Shakespeare might have said if he'd had one. They tend in the beginning to lull you into a false sense of nouveau-richesse. However -- nouveau it may be but it's not exactly real riche. Illusory might better describe it.

Take great care with credit cards – they have sharp edges.