Credit is the ability to borrow money to purchase goods and services.  A credit card gives you access to credit, and when a credit card is used to make purchases, the amount spent becomes borrowed debt that must be repaid. 

A credit card can be an easy way to pay for things you want or need, especially if you don’t have enough money with you at the time.  However, credit cards can also create the temptation to buy things you might regret spending money on later. Saving money first before buying an item reduces the risk of overspending, can cost much less, and could even earn you a little money, but also means a delay in making the purchases you want.

Usually, when the full balance of a credit card is paid off when the bill arrives, there is no additional cost.  However, when the amount borrowed is paid incrementally, interest will be added to the amount due, and interest can be costly.  

Here are some things to think about before getting your first credit card, or adding another. 

Some advantages:

• A credit card, used wisely, can be a good way to establish credit
• Credit is useful if you need to make an emergency purchase
• Credit allows you to buy expensive items without having to pay for it all at once
• A credit card allows you to avoid carrying cash with you
• Some credit cards offer bonuses, such as cash back or discounts on travel

Some Disadvantages:

• You might overspend
• People tend to buy on impulse, without shopping around or check prices as carefully
• You will pay more for what you buy when interest is considered
• Owing money can be stressful
• Making minimum payments required by credit card companies can mean taking years to pay off the items you are buying

Some things to ask yourself before using credit to borrow money:

• Do I really need this now, or can I wait and save for it?
• How much will this cost me in interest? Is it worth it?
• How long will it take me to re-pay?  Will I need to buy more before I pay it off?
• Can I afford the monthly payment?

Credit, and having a credit card, are privileges that are kept by demonstrating the willingness and ability to pay off any debt incurred. It is important to think through the use of credit and credit cards, and make smart decisions before obligating yourself to pay back large sums of money.