Fanplastic!

IT'S time to stare the devil in the eyes. Urban myth suggests credit cards are evil so you may be surprised to learn that I ALWAYS spend on credit cards and would never use anything else.

Don't get me wrong, plastic's sometimes pernicious and has ruined many lives. Credit cards are like fire: used right they're a fantastic tool. Used badly, you'll get burnt.

So for those sucked in by claims of free money, or for people who are already struggling, steering well clear of clocking up debt is the correct, cautious approach.

Yet for anyone prepared to strictly follow the right recipe, here's ten reasons plastic can be fantastic . . .

1. THE CHEAPEST WAY TO SPEND ABROAD

WANT the best currency rate every time you're abroad, then spend on the RIGHT credit cards, and it's cheaper than even the best bureaux de change.

Santander Zero comes out top. Unlike most cards it doesn't add a hidden commission to the exchange rate and has no ATM withdrawal fee. So pop it in your wallet just for holidays, but always repay in full to minimise interest.

Don't assume all cards are cheap though. Most are hideous, check yours at www.moneysavingexpert.com/travelmoney

2. THE SAFEST WAY TO SHOP

BUY something over £100 on a credit (NOT debit) card, and your lender is jointly liable with the retailer.

If the company then goes kaput, or you can't contact it about problems, exercise all your consumer rights via your card company and get money back or compensation.

This applies even if you only pay a deposit on the card. Buy a £3,000 TV and pay just 10p on the credit card and, they'll hate me for telling you, the card company's liable for the WHOLE £3,000.

3. FREE FLIGHTS OR VOUCHERS

TO bribe you to sign up, many cards dole out freebies after a £10ish spend.

So sign up, use the tenner on normal spending, repay it in full so there's no interest, wait for the freebie then cancel the card.

Currently you can bag free BMI business-class returns to Europe, BA European return flights, £30 high street vouchers and more.

Full list and more info at www.moneysavingexpert.com/ccfreebies

4. 0% BORROWING

DON'T think 'sensible' borrowing means loans. The cheapest credit cards cost much less than the cheapest loans.

Currently, Tesco offers 12 months 0% on new spending, followed by M&S at 10 months. So use these rather than a loan for short-term borrowing (if you need cash, do normal day-to-day spending on it, thus freeing up money in your bank account).

Yet always make the monthly minimum repayment, else the 0% deal can vanish, and budget to repay it all BEFORE the 0% ends. Otherwise it ROCKETS to 16.9% APR.

5. BOOST YOUR CREDIT SCORE

THOSE with poor credit histories can boost them using cards to demonstrate responsibility.

Apply for special 'easy to get' cards with hideous 40%-plus rates such as Vanquis, Barclaycard's Initial or Capital One Classic. Then spend a little each month, with a direct debit to fully repay each month so it's INTEREST FREE. After a year you should have a better credit history.

6. GET PAID TO SPEND ON THEM

FAR too many people have cards, repay them in full and think they're doing well as it doesn't cost them. WRONG.

Some credit cards pay you cash each time you spend on them. So if you do all your normal spending on them you can earn hundreds a year - just ensure you've got a direct debit set up to repay in full each month so the card is interest free.

The current top-payer is American Express Platinum which offers 5% cashback for three months, then up to 1.5%. If you don't qualify, try Halifax Mastercard.

Alternatively, grab credit-card reward schemes. See www.moneysavingexpert.com/rewards

7. TRACK SPECIFIC SPENDS

IF you want to budget, use a credit card for a really accurate measure of spending on a certain category, such as going out, expenses or clothing. Provided you fully repay to avoid interest, the statement's a perfect record.

8. STOOZE FOR FREE CASH

FOR the super-savvy debt-free, you can make hundreds FREE from credit cards as they'll lend you cash at 0%, so stick it in a top savings account and earn 3% on it.

There's even a word for people (me included) who do this . . . Stoozers.

The easiest way is to bag a 0% spending card, use it for normal expenditure, then save the unused money building in your bank account. Be careful though - get full instructions at www.moneysavingexpert.com/stoozing

9. FREE ID FRAUD PROTECTION

CAPITAL One credit cards offer free ID fraud protection, which applies not just for their products, but everything you have.

So get the card, don't use it but enjoy the protection. You get two free credit checks each year and an ID fraud helpline to call if needed.

And now the serious stuff's sorted. . .

10. GREAT FOR COLD WINTER DAYS

NEVER tried myself, but I'm told if your car windscreen is frosted over, an old card's perfect for scraping ice off!

SEND questions for publication to notw@moneysavingexpert.com

TV Money Guru Martin Lewis is the creator of the Consumer Revenge website www.MoneySavingExpert.com which is packed with info on how to get more money in your pocket.

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