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5 Reasons Credit Cards Aren't All Bad

NEW YORK (TheStreet) -- Some budget-conscious consumers believe cash is king and true financial stability comes from avoiding credit cards altogether. And it's true counting cash can be a great way to stick to a budget, but credit cards aren't all bad. Experts weigh in on the top five ways carrying a little plastic in your wallet -- and using it responsibly -- can work to your advantage.

1. Credit cards are convenient.

"Having a credit card is a convenience -- you don't have to carry large amounts of cash and risk losing it or getting robbed, you can buy things on sale before payday, and you can charge things like airline tickets and rental cars," says Gail Cunningham, director of media relations for the National Foundation for Credit Counseling.

Credit cards are also useful when it comes to making big-ticket purchases such as appliances or new tires, Cunningham says. Credit cards allow you to work major purchases into your budget over the course of a few months and avoid carrying excessive amounts of cash to the store.

When it comes to paying bills, credit cards can be used to set up automatic payments for things such as your cellphone bill or cable bill, says Gerri Detweiler, director of consumer education for Credit.com.

If you've never had a credit card before and are worried about being responsible, Detweiler recommends opening a major credit card and setting up one recurring bill on autopay using that card.

"Then lock the card away in your safe deposit box, for example, or freeze it in a bowl of water, so it won't be easy to use. Just pay that one bill off in full each month, and you'll build credit without going overboard," she says.

2. By using credit cards, you build a credit history.

While it's true you can build credit without a credit card, it will be a challenge, Detweiler says.

"One of the factors credit-scoring models look at is your mix of credit accounts, and having different types of accounts including a credit card can help," she says.

Unfortunately, it's not enough just to open a credit card -- secured or otherwise -- and sit on it, says Quizzle.com CEO Todd Albery.

"Use your card at least once a month to make small purchases and pay it off in full, on time, every time," Albery says.

Also, keep in mind that you don't have to carry a balance to build credit, says Greg McBride, Bankrate.com senior financial analyst.

"Credit cards help you establish credit because that purchase you make today and pay for later is a credit transaction -- but you don't have to carry a balance. Paying the balance in full when the statement comes at the end of the month is the best way to go from a financial standpoint," McBride says.

If you don't see the importance of having a "thick and positive" credit file, you will as soon as you decide to make a big purchase such as a house or car, Cunningham says. "One of these days you're going to be thankful you have several open and positive lines of credit."

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