by Rick Dickert

Created on: March 18, 2009   Last Updated: May 07, 2010

When used within a budget, many consumers enjoy credit cards simply for the convenience of shopping without carrying cash. Credit cards also present the means of making unplanned impulse purchases, which can challenge the balanced budget of some shoppers.

The careful use of credit cards may also enhance a budget. Choosing a card without an annual fee can be the first step to using credit to the consumer's advantage. The interest rate charged on credit card purchases is also critical if a balance is to be carried. Obviously the most attractive scenario is for a consumer to pay the full amount owing on time each month resulting in no interest charges, while using the card to take advantage of sales on necessary items.

The economic reality for many is that there will be a balance carried from month to month on credit cards. In this case, some money may be saved by the consumer holding more than one card, if the majority or ideally all of debt is carried on the card with the lowest rate of interest.

Some credit cards offer the perk of customer loyalty points in various systems of accumulation. These points may be redeemed for a wide range of products and services from airline flights to groceries. Using these cards can stretch a family's budget for vacation or day to day necessities. Some cardholders may receive the added bonus of keeping the customer loyalty points accumulated on their business account at their workplace.

Another type of loyalty involving credit cards involves displaying a customer's choice of affiliation on the card itself. For example, a customer may choose to use a card displaying a picture of an animal that benefits The Humane Society. Other customers chose to show their enthusiasm for professional sports teams by carrying cards with their team's logos proudly displayed beside the credit card company's graphics.

Shopping online may require a credit card for payment. Some consumers who would otherwise be reluctant to use a credit card online may have one specifically designated for online use, with an intentionally low credit limit to reduce their online vulnerability. Credit card holders may make their online transactions more confidently by being familiar with the companies they're dealing with and by paying attention to the encryption status of the site's security features when they make purchases.

Some people carry credit cards specifically for an emergency. In the case of an automobile breakdown, payment for towing may have to be arranged at roadside. Motorists may benefit from carrying more than one card, as towing companies may not accept all cards. Also when card holders have a choice of which card to use, they may put more purchases on the account with less interest or the one that has payment coming due at a later date to strategically manage their budget.

Receiving a first credit card may be seen as a financial rite of passage. Credit cards allow for creative budgeting of everyday practical purchases as well as the calculated financing of earned luxuries.

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