Credit card debt has become a massive feature of UK society.  In December 2008 the UK credit card debt totalled over £65.5 billion.   

Most households have at least one credit card and many have far more than that (there are 67 million credit cards current in use).  As a nation we have become reliant upon credit cards to help fund our spending habits.  But are they a good idea?

Here we take a look at the advantages and disadvantages of using credit cards.

Advantages

• Purchase large items.  It can be difficult to save for expensive items, such as computers, TV's etc.  Using a credit card allows us to pay it off bit by bit, over a number of months in a much more affordable way.
• Deal with emergencies.  It is ridiculous to save funds to cover every single eventuality. Things go wrong and credit cards are great to have available to cover emergencies such as paying for plumbing or electrical problems that need fixing urgently.
• Safety.  Many credit cards offer card protection against fraudsters and stolen details.  When you are internet shopping, or even buying from shops, this added protection can provide real peace of mind.
• Rewards.  Credit card companies offer many incentives to using their card to shop with. Including such things as Air Miles, money back offers, vouchers for use in certain shops, prize draws and many more.  These are things that you don't get when using debit cards or cash.

Disadvantages

• Interest.  Because of credit card companies charging interest (usually described as an APR figure – Annual Percentage Rate) you will be paying off more than you borrowed, and if you are only making the minimum payments you will be paying off a lot more than you borrowed.
• Future earnings.  By using credit cards you are basically borrowing against future earnings, assuming that you will be able to pay off that amount in the future.  If you lose your job, become ill etc you may well not be in a position to pay off the amount borrowed.
• Legal work.  If you are unable to make the regular payments owed, for what ever reason, you can be faced with legal consequences.  Baliffs looking to rclaim money, solicitors looking to take you to court, CCJ's.  This can cost you money, stress and have a real impact upon your life.
• Credit rating.  If you miss any payments it can have a negative impact upon your credit rating.  This rating is used to determine if you are able to get loans, credit cards and mortgages.  Having a positive credit rating is considered vital in modern times, the last thing you want is any negative impact.