Credit cards can be dangerous in the wrong hands and a very powerful tool in the right hands!

Bad usage: I never get a credit card and use it to buy with out a plan of what I'm going to do to pay it back. The interest rates on a credit card can be some of the highest. The only thing that is worse than a credit card for rates is a store card. I avoid store cards at all times, they can have rate at 28% which is not far from a loan shark!

Good usage: I use credits cards the following way. All of these take advantage of introductry offers. Often you see cards that are 0% on all pruchases for the first 6 months, or 0% on balance transfers.

Getting a cheap loan: It is possible to buy large items on a credit card at 0% for 6 or 9 months. For example I personally bought a car for £30000 on a credit card. I made sure the garage dropped the 1.5% surcharge for the credit card purchase. I had the money to buy the car in the bank put decided to delay the payment for 9 months with the use of an introductry card offer. I then set up online 8 minumum payment standing orders and one final payment for the remaining balance. This took 10 minutes online and then the payments happen automatically and before the interest rate offer expires the card has a zero balance. The £30000 then offset my mortgage for 9 months, at 6.25% this means I saved about £800 tax free. The total effort here is the set up of the standing orders and applying for the card. What would you say if someone said they would give you £800 for 1 hours work?

Card Shuffling: I used to have a large credit card bill and I was paying interest each month. I then looked at getting a new card with a 0% balance transfer offer. Once I had the new card I transfered my old card's balance to the new one and then cancelled the old card and cut it up. I payed the same amount each month as I did before before so I was not worse off each month but the debt was repayed faster.

All of these ideas need to be executed very carefully. If I missed a payment or I don't clear the balance before the offer ends I could have lost out. I had to have everything planned and in place. If you have poor self control please do not try any of these ideas! Also look out for balance transfer admin fees, some companies charge a fee even if the rate is 0%. Card companies will also try to sell you payment insurance which may effect how well some of these ideas work.