Despite the bad rap that credit cards have gotten over the years, there are many reasons why having credit cards is a 'good idea'. Credit cards not only act as a form of payment for goods and / or services, but they are also an important source of identification, and they allow you to create a credit history that will improve your opportunities to obtain loans for larger items such as homes and automobiles. Of course, if your credit cards are used unwisely, they can harm your credit history.

Some of the benefits of having and using credit cards wisely:

. Save $ On You Future Loans
. Convenience
. Safety
. Identification
. Saves you Money
. Security
. Necessity
. Independence
(See below for more information.)

• Save $ On You Future Loans - creating a good credit history is important if you would like to make a major purchase in the future such as a home - the quality of your credit rating (FICO score) is used to determine the interest you will pay on your loans - so a good credit history can save you thousands of dollars over the years
  
• Convenience - credit cards allow you to purchase goods or services now and pay later. The convenience factor however must not be abused or you can quickly establish large credit card debt.

A few good questions to ask yourself:

» Do I need - or do I simply want this item?
» Do I have the money in the bank to cover this purchase?
» Will I have the money in the bank to cover this charge when it is due?
» Would I be buying this item if I had to go to the bank and get the money to pay for it - or is this an impulse purchase? If you are not sure - wait 24 hours before making the purchase.

• Safety - credit cards are often safer to carry than cash. If you lose cash - it is gone. However, if you lose your credit card, you can contact the credit card company and cancel the card so no one else can use it.
  
• Identification - many vendors accept credit cards as a form of identification. In certain situations you may be asked to provide multiple pieces of id, beyond your driver's licence. Credit cards not only show who you are, they are an indication that you are financially sound enough to have credit.
  
• Saves you money - many credit card companies now offer reward incentives just for using their credit card. These rewards can save you money - you might receive valuable travel discounts, automobile discounts etc. depending on the offer.
  
• Security - credit cards can offer security in the times of an emergency. Keeping your credit cards up to date and paid - will enable you to have hundreds or thousands of dollars available to you for emergencies.
  
• Necessity - There may be times when you are unable to use any other form of payment. In many cases it is impossible to make a hotel or flight reservation without a credit card.
  
• Independence - having a credit card means having both enhanced independence and increased personal responsibility for controlling spending.

Credit cards, when managed properly, are a vital, almost essential, part of modern living that can improve the quality of your life. However, poorly managed credit card debt can quickly destroy your financial security. They are a powerful financial tool that can benefit or harm you - depending on how you choose to use them.