Credit Cards

A credit card allows you to borrow money on a monthly basis. Credit cards are accepted as a means of payment for goods and services in most  places around the world. However, you need to be disciplined in ensuring that your level of spending in in accordance with your income and that you are in a position to pay the accrued charges each month. Otherwise, you incur penal rates of interest that can quickly add up on unpaid balances.

One advantage is that there is no interest charged on borrowings if you pay your full bill within a set number of days. Credit cards are flexible and can be used to pay for items and services that you may buy on-line or by telephone. They are also useful if you need to access cash in another country.

They are not suitable for long-term borrowing as interest rates are high. Loans taken out on credit cards are economical only if you pay your bill in full and on time every time you receive a bill. Credit cards can be useful for consumers if you have a problem with an item you have purchased. In this situation your credit card bill or statement can be used as proof of purchase.