continued...

Another thought on those dreaded hunks of plastic is the so-called "semi-precious cards" that come in a variety of silver, gold, platinum and the latest, jet black. For what they offer in benefits, the higher annual fees are not justifiable. They look impressive when you pull them out of your wallet, but they really aren't worth the additional dollars you will spend year after year. Just another thought to keep in mind while you are culling your crop of plastic.

Now that we've discussed all of the negatives about credit cards, here are some positives to leave you with. Credit cards do give you the benefit of playing the same game banks have played for years with our money: "the float." You buy an item on the 1^st of the month and pay for it with a credit card. Your bill comes in on the 25^th of the month and you have a "grace period" before being charged any interest. Let's assume you can stretch out this period until the 15^th of the following month. That gives you a full one and a half months before you have to give up some of your hard-earned cash for an item you have used during that period of time for free. This is called playing the float - using someone else's money literally for free. Not a bad deal. The banks have been doing that to us for years and have made billions on us. It's time we returned the favor. Just make sure you don't abuse the privilege.

(By the way, I don't like debit cards. Why, you ask? They have no float. You whisk that card through the machine and within minutes, your money is whisked out of your account to the bank. No float to you, and a big benefit to your bank.)

The Dangers of Abuse

Are you abusing your credit cards? According to the financial planning section of About.com, here are some of the warning signs:

• Do you have more than two or three credit cards in your wallet?
• Do you pay the minimum (or less) every month?
• Are any of your credit cards maxed out or nearly at their limit?
• Do you hold off sending in other bills so you can pay the monthly payments on your credit cards?
• Do you charge items you used to pay for with cash?
• Do you send in payments late or miss payments?
• Have you taken out a loan to pay off a credit card, but then continue to charge things to the card?
• Do you take out cash advances on your credit cards to pay other bills?

I did start off by saying that credit cards do have some benefits and I really mean that. Right now, they might be your best source of financing anything. Finance and leasing rates are not cheap, and you must start paying on them as soon as the deal is signed. You also have a limited period of time to pay all the money back. Credit cards usually give you a lower interest rate and the terms are much better. It's worth comparing before you sign on any finance or leasing plan. It could save you a bundle.

There you have it: my dissertation on the good, the bad and the ugly pertaining to those deadly pieces of plastic referred to as credit cards. So, the next time an advertisement asks you, "What's in your wallet?" you will know the answer and understand what it means in terms of your finances.

As I said earlier, this is the first article in a series intended to help get your finances in order. Future articles will cover such topics as:

• Banks. Those fabulous institutions that love to take our money but are in no hurry to give it back to us.
• Mortgages. A very useful financial tool if used properly. But do you really understand how mortgages work?
• Insurance. What would any series on finances be without exposure to this topic? If you are unsure about what you should insure, this was written just for you.
• Cash. Something we all talk about but most of us have so little of. Learn ways to remedy that condition.
• Retirement Plans. We all need a financial plan for our retirement, but how many of us have starting planning?

Stanley Greenfield, RHU, is a financial consultant and health insurance underwriter in Jacksonville Beach, Fla.