1. Free credit if used correctly

• Most Credit Cards don't charge an annual fee, although some are starting to levy them
• If your provider wants to charge you an annual fee consider taking your business elsewhere

2. 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

3. 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

4. Loss Protection

• Get 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

5. 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

6. Good 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)

7. 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% - 3% of the amount being transferred

8. 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

9. 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 -
• Also, when you use your card abroad there is the added bonus of protection should the goods be faulty or lost

10. 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.

11. 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

12. Points (and Rewards) means prizes!

• 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