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Credit cards can be a good idea
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Are credit cards always a bad thing?

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"I don't know if it's good or bad, because for some people it can meet their immediate needs, if they manage it well. Some people I know -- grad students -- are smart and always keep it at a zero-percent balance transfer rate," he says.

Make float work for you
For many people, the best benefit of a credit card is what the bank always enjoys: float.

Depending on your credit card, you'll get a grace period of 25 to 35 days before you have to pay.

"A credit card is good for float, if you know money is coming," says O'Neill. "If you're getting a tax refund or retroactive pay, it can be a good short-term emergency fund or a short-term loan for yourself."

Meanwhile, your money could be earning interest in a money-market account while the credit-card company fronts some cash for you.

Gas rebates and cold cash
Apart from a short-term, interest-free loan, you can often get some extra sweetener out of your credit card, ranging from a cash reward to discount coupons at your favorite stores.

"My first choice for everything would be credit cards, because you get something back," says Bilker. "If you can use rewards, it's great. But everyone can use cash-back rewards."

Bilker also takes advantage of special starter offers, such as those for new cardholders of Wawa convenience store cards.

"Wawa has this great deal, where for the first 90 days you get 10 percent off purchases with Wawa and 4 percent everywhere else," he says. "That 10 percent includes gas, and I've gotten $400 worth of rewards. That's five weeks of gas for two vans."

Good things come to those who read the fine print and charge.

"With my Citibank card, I got 10 percent cash back on home remodeling," Bilker says. "I charged $10,000 on the card. Bill comes -- it's $9,000."

Bilker is a fan of the charge-it-all strategy, even for a bottle of water. "There's nothing wrong with charging groceries, though everyone gets upset when I say that."

The problem, he says, is that "when you charge a lot of stuff, people tend to forget. They either buy more or forget. If they just stick to the plan, they'll be all right."

Part of plan is keeping track of rewards. It's easy to think you're being a smart consumer because you're getting rewards, but that's true only if you buy just what you need.

"Don't buy extra stuff," says Bilker. "They're hoping you say, 'I'll go out and buy a plasma TV because of the rewards.' If you're going to buy a big-screen TV, and you're planning to buy a $2,000 model, and then you end up charging a $4,000 TV, that's the mistake."

Next: "... with credit cards it's essential to read the fine print."
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