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.credit, credit cards or cash?.

i have been thinking of getting a credit card lately and have actually applied for one.... nice article to read regarding this issue....

Right Way To Use Credit
by: Stephanie Dychiu
Generally, there are only two reasons to buy something on credit:
1. When the item being purchased is an asset or something that retains or increases its value after you purchase it. Examples of assets are real estate property, high-value artwork or jewelry, and property or equipment used to start a profitable business. It’s usually okay to use borrowed money for these because their increase in value has a good chance of outpacing the interest payments.
2. When you need to make an emergency purchase. (Read: legitimate emergencies, not your usual conundrum of having nothing to wear on a Saturday night gimik.) Examples of legitimate emergencies are unforeseen medical expenses, replacing lost luggage while on a trip abroad (assuming you’re not insured), or paying for the tuition fee of a sibling you’re supporting through college.

Here’s a sample list of items you’re better off paying for in cash to keep in budget:
Clothes and shoes
Meals in restaurants
Utility bills

Three-way Test for Smart Shopping
Things to ask yourself before you make a final decision to spend:
1. What’s the worst thing that can happen if I don’t buy this now?
2. Can’t I splurge on the little things I can afford?
3. What are the other things I can buy for this amount of money?

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