Given what we have to say about the vagaries of consumer debt, you may think that we’re always against using credit cards. Actually, used properly, besides the convenience credit cards offer, there’s another benefit: free use of the bank’s money until the time the bill is due. (Some cards offer other benefits, such as frequent-flyer miles or other rewards — for more details on reward cards, see Chapter 6.) Also, purchases made on credit cards may be contested if the sellers of products or services don’t stand behind what they sell.
When you charge on a credit card that does not have an outstanding balance carried over from the prior month, you typically have several weeks (known as the grace period) from the date of the charge to the time when you must pay your bill. This is called playing the float. Had you paid for this purchase by cash or cheque, you would’ve had to shell out your money sooner.
If you have difficulty saving money and plastic tends to break your budget, forget the float and rewards games. You’re better off not using credit cards. The same applies to those who pay their bills in full but spend more because it’s so easy to do so with a piece of plastic. (For information on alternatives to using credit cards, see Chapter 5.)