The only thing good about a credit card, is it allows you to buy things with a convenient form of payment, and it allows you to spend in an emergency.
If you learn nothing else from this thread, learn this please:
NEVER EVER Carry a balance on a credit card.
I use one all the time however, as it's how I buy things online. It's also a lot faster to swipe a card at a fast food restaurant then it is to pay with cash. I almost never have cash on me anymore.
Just make sure you pay the full balance every month.
So, how it works:
You get a line of credit, usually for your first card, it will be between $500 and a few thousand dollars. As you show responsibility, that number climbs. I think mine is at $15,000 or something.
They will give you a ridiculous interest rate most likely. Something in the high teens after the in introductory rate expires (if there is one). What this rate means, is that's how much they will charge you each month for whatever balance you carry. Some cards have a annual fee. Stay away from those.
So let's say you have a card with a limit of $2000, and you spend $200 on it. When you get your bill, you pay the $200. I use my credit cards site to pay from my checking account. I can pay the bill in seconds, know the latest amount, and it's free (no stamp).
when you get your bill, they might say you only need to pay $20. If you do, you will carry a balance of $180. If your interest rate is a 20% APR, That will be $180 * 20% / 12 months. That's $3. Doesn't seem like much, until you get in the routine of this, it creeps up $1,800, and your now paying $30 a month just to keep it from going up.
If you pay off the entire $200 in the payment cycle it's due, there is no charge to you.
I hope that helps.
