Advantages:

Convenience--Credit cards can save you time and trouble--no searching for an ATM or keeping cash on-hand.

Record keeping--Credit card statements can help you track your expenses. Some cards even provide year-end summaries that really help out at tax time.

Low-cost loans--You can use revolving credit to save today (e.g., at a one-day sale), when available cash is a week away.

Instant cash--Cash advances are quick and convenient, putting cash in your hand when you need it.

Perks--From frequent flier miles to discounts on automobiles, there is a program out there for everyone. Many credit card companies offer incentive programs based on the amount of purchases you make.

Build positive credit--Controlled use of a credit card can help you establish credit for the first time or rebuild credit if you've had problems in the past--as long as you stay within your means and pay your bills on time.

Purchase protection--Most credit card companies will handle disputes for you. If a merchant won't take back a defective product, check with your credit card company.

Balance surfing--Many credit card companies offer low introductory interest rates. These offers allow you to move balances to lower-rate cards.

Disadvantages:

Overuse--Revolving credit makes it easy to spend beyond your means.

Paperwork--You'll need to save your receipts and check them against your statement each month. This is a good way to ensure that you haven't been overcharged.

High-cost fees--Your purchase will suddenly become much more expensive if you carry a balance or miss a payment.

Unexpected fees--Typically, you'll pay between 2 and 4 percent just to get the cash advance; also cash advances usually carry high interest rates.

No free lunch--The high interest rates and annual fees associated with credit cards often outweigh the benefits received. Savings offered by credit cards can often be obtained elsewhere.

Deepening your debt--Consumers are using credit more than ever before. If you charge freely, you may quickly find yourself in over your head--as your balance increases, so do your monthly minimum payments.

Homework--It's up to you to make sure you receive proper credit for incorrect or fraudulent charges.

Teaser rates--Low introductory rates may be an attractive option, but they last only for a limited time. When the teaser rate expires, the interest rate charged on your balance can jump dramatically.