A credit card can be a useful money management tool. But it's also easy to lose track of how much you've spent by the time you get your bill. You may buy more things on impulse and spend more than you can afford to. Or you may start to charge regular expenses, such as groceries and gas, on your credit card and not pay the balance off in full.

Paying only part of your balance: If you don't pay your bill in full each month, you'll have to pay finance charges on the unpaid balance. If you keep charging things on your credit card while carrying an unpaid balance, your debt can become hard to manage and paying the minimum payment on a credit card may only cover the interest payment. Try out this tool to see how long it can take to pay off a credit card balance.

Making large purchases: Don't get sucked in to big purchases on a store credit card that say "only $10 per month." While that might seem tempting, you will end up paying way more for your purchase than you should. For example, if you were to purchase a TV that costs $500 and only pay $10 a month, it would likely take you four years to pay it off--and the TV would end up costing you over $700!

Unnecessary credit costs: Regular late payments and fees for spending more than your credit limit (the set amount a creditor lets you borrow) can add hundreds of dollars to the costs of credit each year. It's much cheaper to pay credit card bills on time and follow the repayment terms of your credit card company.

If you start to have trouble repaying the debt, you could hurt your credit rating. A negative credit report can make it difficult to get a car or home loan, insurance, and even a job.

Bottom Line:

If you want the convenience of a credit card to pay for items instead of cash, but are worried about high interest rates or falling into debt that you can't get out of, you should probably consider a debit card. Debit cards, sometimes called check cards, are accepted everywhere that credit cards are, but they take money directly from your checking account. Since you're only spending money that you already have, there are never any finance charges. More information on debit cards

If you want a credit card so that you can start building your credit history, there really is no substitute. The best thing to do is use a credit card once in a while, and only for small purchases that you can easily pay off the next month.