CREDIT CARDS: FRIEND OR FOE
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Also a very good opportunity may come, and you need money to utilize it. It may be an IPO, or something that is in your budget, and is now suddenly on sale or half price, you can grab it, and quickly pay back without incurring fees.
The best way to use a credit card is for things you can afford. And then when the bill comes, pay off everything. You will not incure any charge.
In Nigeria, credit cards are new, and banks charge you for using the card (if you spend 50K on your credit card, and pay back immediately you bill arrives, you still get charged. I guess when things settle down, this will stop). When you use credit cards to pay for things on your budget that you can afford, and pay back immediately you get your bill (or by standing order), you are virtually using your banks money to manage your cash flow, free of charge. It can be a veritable tool to acquire assets, if you do your homework well.
Credit cards are necessary in mordern economies, and are critical in building credit histories for individuals for banks and institutions to use in evaluating individual risk profiles in transactions. Consumer spending is now funded by banks which boost demand for goods and stimulate economic growth and industrial capacity utilization.
In the western world, credit has been more of a curse (to individuals, and blessing to the economy) than a blessing. Credit card debt is at an all time high, and rising year on year. Some folks who get swamped by credit card payments take the easy way out and declare bankruptcy, wrecking their credit history almost for good.
If you don't want to join the statistic, stick to your debit cards, and use credit cards sparingly, for things you can afford to pay for when the bill comes and transactions that you need to protect yourself if you get what you did not bargain for.
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