Credit cards have their place in personal finance and it is not in stretching your credit limit. Here are pointers on how to maximise the value of credit cards (and the not):

A) Their value is in:

• Receiving 21 days credit free on the purchases you make;
• The starter gift most banks offer you;
• Consolidating your monthly spending;
• Maximising the discounts credit cards offer on shops, restaurants, and gas stations you patronise; and
• Enjoying 0% interest on purchases you make (although most have an addendum that you cannot cancel the card until the period is over, e.g. 24 months so read the fine print carefully.

B) Their value is not in:

• Buying that big ticket item, car, downpayment on house you can't afford;
• Rolling over every month and paying only the minimum sum;
• Not paying off the full amount every month.

Should you already find yourself in B, your aim should be:

1. Pay off as much as you owe every month.
2. Transfer as much if not all to a lower or even better, 0% interest rate account.
3. And then, go to 1.

If you live in the UK and wish to shop for the best deals on credit cards, check out the Credit Card Store. There, you can compare credit cards, review the reward credit cards and cash back credit cards, and if you're already in dire straits, consider switching to one of the 0% balance transfer credit cards.

This post was kindly sponsored by the Credit Card Store, which has done all the work for you already. :)

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