by Vince Liuzzi
Executive Vice President and Chief Banking Officer, DNB First

Credit cards. We’ve all been warned about the dangers of using them. Some experts advise you to cut them up. Others offer creative suggestions to discourage usage and avoid temptation, including putting your credit cards on ice.

Before you do anything drastic, freeze.

A credit card can be a very useful tool to help manage your finances. Here are five smart reasons to use one:

1. Expense tracking. One of the biggest financial mistakes people make is not knowing how they spend their money. That’s why one of the first recommendations financial experts make is to determine your expenses and set up a monthly budget. If you pay your bills using a credit card, you’ll be able to easily track expenses. And if your credit card offers a year-end summary of purchases, you can make annual income tax preparation a whole lot easier.
2. Credit building. If you’re starting out and plan to buy a home or car someday, you’ll need to establish a credit history. Credit cards are a great way to do this. Keep in mind, however, that to maintain a strong history, you’ll need to make payments on time and limit the amount you borrow.
3. Savings. Most credit card issuers, including DNB First, offer credit cards with rewards for the purchases you make. You may be able to earn cash back or enjoy savings on travel, merchandise, and other goods and services.
4. Protection and peace of mind. Credit cards often offer travel benefits, including emergency assistance and travel accident insurance. Your credit card also comes with another level of protection, purchase protection, which covers you if you have a problem with something you purchase or if someone makes unauthorized purchases with your card.
5. Emergency money. Life is unpredictable and there may be times when you encounter financial emergencies. With a credit card, you can easily access the money you need. If you’re traveling, it’s always wise to bring along a credit card, which offers worldwide acceptance.

Use credit cards wisely.

Despite the advantages of using credit cards, they still present risks if not used wisely. Here are some ways to ensure you avoid credit card trouble:

• Pay off your balances in full each month to avoid interest charges.
• Don’t charge anything if you don’t have the money to pay for it.
• Make your credit card payments on time. Every time.
• Avoid opening too many credit card accounts, including department store cards.
• Review your statements and activity to ensure no unauthorized purchases have been made.

With the holiday season upon us, now is a great time to be disciplined with credit card usage. The last thing you want to do is charge more than you can afford – and well… lose your cool.