Credit cards have been abused, misused and maligned a lot but fact is that if used with care and caution, it is actually an instrument with many advantages.

You don't need to carry surplus cash and can practically manage anything with just the credit card, especially during travel.

In emergencies like a medical one, it is the credit card which comes to your rescue and speeds things up.

Large transactions like air ticket purchases, expensive electronics can be planned better using the credit card as it buys you some breathing time before the date of settling the bill.

Online transactions can be done only with credit cards or debit cards.

Good loyalty and rewards programs floated by the card companies gets you special treatment and benefits like frequent flyer miles, access to airport lounges among various other offers.

The history of your credit card usage defines your credit score and a high score will get you loans approvals and favourable terms much more easily.

Finally, while a number of the above mentioned benefits are available on debit cards as well, the main benefit that only the credit card allows you is that of a 30-40 day interest free period for you to settle your dues.

All that you need to remember so that you get only the advantages of using a credit card and none of the advantages is that ultimately you are spending your own money - it is either money you have already earned or money you will earn tomorrow - it is not your guardian angel who will bestow the money needed to settle the credit card bill!
So stay within your means, spend only what you can afford to pay off and in full with your own money.

The author, Lovaii Navlakhi, CFP is the CEO of International Money Matters and The Financial Alphabet.