Used right, a credit card can help spread the cost of debt, stopping you from paying expensive interest and protecting you from large one-off costs.
But used wrong, they can trap you in a cycle of debt and even mean you're blocked from taking out products that could help you.
The problem is a lot of the rules around cards and how you use them can be a little obscure.
The good news, then, is that James Jones - head of consumer affairs at credit reference agency Experian - has just gone on the record to explain exactly how it all works.
"Using a credit card wisely can help boost your credit score, but do be careful because cards can be expensive if you build up significant debt on them and are not on a promotional rate of interest," Jones said.
"Also, how much of your card limits you regularly use each month can have a big impact on scores as it shows how reliant you are on credit.
"For example, keeping card balances below 30% of the limit can gain 90 points. On the other hand, maxing out several credit cards can put an unwelcome dent in your credit score."
And credit scores are the difference between getting the best rates possible on a product and being rejected outright by everyone from banks to phone companies to prospective employers - as people regularly check them before offering people contracts.
Experian, one of the biggest credit reference agencies, scores people from 0 to 999 points - with a score below 560 seen as "very poor" and one above 960 seen as "excellent".
And getting it wrong with your cards can be enough - in the worst case - to drag you from the very top of the rankings to the bottom.
This is Jones' guide to how your credit card moves that score up and down:
Taking out new cards
- Having a credit card for more than 5 years: +20 pts
- Having a credit card opened in the last 6 months: -40 pts
Missing payments
- Most recent payment missed or late: - 130 pts
- Account defaulted: -350 pts
How big your balance is
- Credit card balance below £50: +60 pts
- Balance over £15,000: -50 pts
How big your limit is
- Credit card limit of £5,000 or more: +20 pts
- Limit of £250 or less: -40 pts
How much of your limit you use
- Card balance below 30% of your credit limit: +90 pts
- Balance over 90% of your credit limit: -50 pts
Making minimum repayments
- Making the minimum monthly payment on your credit card is marked on your credit report with a warning flag and can worry a new lender, unless the account is also marked as on a promotion (ie 0%) deal.
