Wait a minute. How can credit cards be both great and dangerous? It all depends on how you use them.

But when you look at the commercials on TV, you never get the feeling that having all that fun with credit cards will actually put you in debt. The ads only show you the glamour of credit. Airplanes flying toward sunny beaches. Fancy dinners. Cool home entertainment systems.

There’s not a word about the 12-20% interest rate you’re charged for borrowing money. No one mentions $25-$35 penalty fees for late monthly payments.

The advantages:

Smart shoppers take advantage of the many benefits of credit cards:

1. You don’t have to carry lots of cash in your wallet, which might get lost or stolen.
2. You have the power of money in an emergency. For example, you get a flat tire and have to call a tow truck.
3. You may be able to use the credit system to get a free loan. Some credit card companies allow you to borrow money for about four weeks. And you pay nothing, not a cent for using this money if you pay it all back on time.
4. By owning a credit card, you can build a good reputation for paying your debts on time. A good payment record will qualify you to take out loans for cars or borrow money to buy a house later in life.

The disadvantages:

1. Credit cards give you the freedom to buy things you really can’t afford.
2. Credit cards tempt you to buy on impulse because you always have the power to spend.
3. Credit cards can fool you into spending money on “great deals.”
4. Credit cards can tempt you to spend so much that most of your cash is going to pay your credit card bill. Then what happens? You begin charging everyday items because you don’t have any money in your pocket. It’s like being caught on a merry-go-round – one that you can’t get off. Each time you “go-round” you charge more and owe more.

Whatever it is, be wise in spending, be a smart shopper.

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