• Spend now pay later
  If you pay off the full balance at the end of the month then you've earned 'free' money because Credit Card bills are settled about a month in arrears, the so-called grace period. Time your purchases right and it's possible to get up to 50-60 days of interest free credit. See - How Credit Card APR works
  
  
• Purchase Protection
  Buy some faulty goods with your credit card and they'll normally be 100% insured for a specific period. Insurance also sometimes offers cover if the item is lost or stolen. It is important to check to see what cover is available because some Cards are far better than others, with some companies offering no protection at all. See - What is Section 75 and how it protects credit card purchases
  
  
• Loss Protection
  There is far more security for paying for goods with a credit card than with cash. Should your card be stolen it just takes a simple call to your provider who will put a stop on it and issue a new card. See - Your rights to compensation
  
  
• Use a card to rebuild your Credit Rating
  Having a good credit file is so important as it offers you financial options. Financial options improve your chances of being offered loans or finance for a mortgage, a loan, another credit card, 0% deal on a TV etc. One way to improve a credit rating is to ensure that your monthly repayments on a credit card are always up to date, so building up a responsible profile with the credit rating agencies - See help on improving your Credit File. Also Secret 7 - Protect your credit rating with your life - which is one of this site's 10 Secrets to Good Personal Finance

See also - Credit File Help section

• Security
  If you lose your Card or it gets stolen you are by law only liable for the first £50 if the card is used by a third party. However your PIN number should be kept safe - the best place is in your head - and not written on the back of the card. Amazingly some people actually do this.
  
  
• 0% Balance transfers
  These enable you to transfer a balance from one Credit Card to a different one that perhaps is charging less interest, usually for a specified period of time. Note there is a one-off fee charged, normally 2.5% of the amount being transferred.
  
  
• Free travel insurance
  Often when you buy an airline ticket or a holiday using your credit card you'll get free travel insurance. Always check what's on offer with your individual Card as the insurance offered is normally not as comprehensive as if a separate stand-alone policy is bought.
  
  
• Travel Advantages
  Spending money when abroad via a credit card is normally far cheaper than using cash obtained from a cash machine, but it can still be expensive if you don't have the right card - See this FAQ for more information. Also, when you use your card abroad there is the added bonus of protection should the goods be faulty or lost.
  
  
• Monthly Spending Analysis
  It is far easier to monitor how your money is being spent by analysing your credit card statements, rather than trying to keep a track of where your actual cash went. This makes it possible to see if you're spending too much on certain goods and services, perhaps for example you can cut your weekly supermarket bill by 10%. See Secret 8 - 10-30 minutes a week is all you need to be financially organised - which is one of this site's 10 Secrets to Good Personal Finance.
  
  
• No plastic = No sale
  Many purchases these days such as Car rentals or Hotel bookings won't accept your business unless you have a Credit Card. You can of course always settle your bill in cash but the Card is needed as a deposit.
  
  
• Points and Rewards
  Many cards offer cash back or points such as Airmiles or gift vouchers. These often are not that much of a selling point if you spend only a few hundred pounds per month but if you're a big spender then reward style cards can be great. See what are Reward style Credit Cards.

See also

• Why we like and use these 3 Credit Cards