Credit cards are often painted as being, more than anything else, the bringer of debts and misery to consumers. They have remained a popular product for many years, though, not because they are sometimes used badly but because they are often used well.
Know what you're doing and what you want and cards can be an excellent supplement to current accounts, personal loans and even to your everyday purchases. When you go to compare plastic you'd be forgiven for thinking that they are for one things and one thing only: borrowing money in the short term.
This is because laws on advertising cards mean that they have to advertise the typical variable APR, that is, the interest rate on borrowing more prominently than any other offers.
There are even rules on how much bigger the font of the interest rate needs to be. However, since most credit cards have an interest free period of around fifty days there is no need to pay interest at that high rate when borrowing in the very short term. Since that's much cheaper than going into most planned overdrafts and all unplanned overdrafts this is the first way that credit can help your finances.
A second way should be on your mind when you compare personal loans. In this case, some loans can be paid back early without there being a penalty to the holder of the loan for doing so. If you go for this sort of loan then you could use a super balance transfer offer to pay off the loan and then pay the balance transfer back at 0%, potentially saving hundreds in interest fees.
The third point is that cards can be used to make money and thus to supplement income in a similar way to investments and savings accounts. For example, when you go to compare savings accounts it might be the case that you could spot one offering a high rate for the length of an interest free offer. In that case, while the money is the savings account earning money it isn't accruing interest for the borrower.
The forth and final point is that credit cards can make money in another way: through rewards. This will only be relevant to those who spend a lot of money throughout the month and it'll be especially relevant to those who spend a lot of money in just one store which has its own rewards scheme.