4.3 Credit cards

In this section:

• 4.3.1 How credit cards work
• 4.3.2 Benefits and risks of credit cards
• 4.3.3 Compare credit cards to debit cards
• 4.3.4 Prepaid cards
• 4.3.5 Choosing a credit card
• 4.3.6 Cost of credit cards
• 4.3.7 Case study: Credit card use
• 4.3.8 Credit card statements
• 4.3.9 Tips for credit card use
• 4.3.10 Video: Using credit cards wisely
• 4.3.11 Credit card fraud
• 4.3.12 Video: Debit and credit card fraud
• 4.3.13 If you are a victim of debit or credit card fraud
• 4.3.14 Summary of key messages

Introduction

Credit cards offer great convenience. They allow you to avoid carrying large amounts of cash, put off paying for purchases until a later date and participate in rewards programs.

But credit cards also make it easy to let debts pile up, resulting in steep interest charges. And failure to pay your credit card bills on time can saddle you with a poor credit history, making it more difficult to get credit in the future.

This section is about credit cards. In it you will learn:

• how credit cards work
• how to choose a credit card that is right for you
• the consequences of late or minimal payments, and how to avoid them
• how to understand your credit card statement
• how to keep your credit card safe from frauds and scams.

By the time you finish this section, you will know how to use your credit cards responsibly and safely. You will be better able to use a credit card to help you reach your financial goals, while avoiding the pitfalls that can result from irresponsible credit card use.