A young reader asks: "I am a student. I need information about the advantages and disadvantages of credit cards."

The reader has asked a very important question, and one I wish more high school and college -age readers would ask. Credit card companies solicit young adults who receive very little financial education in school (but that's another story!) and are enticed by the thought of being able to buy electronics, clothes and other goods without having to pay for them right away. All too often they don't learn that instant gratification will soon be replaced by mounting credit card bills.

In our society, having a good credit history has become important. Good credit history will get you a lower rate on mortgages, car loans and other loans. Landlords often use credit scores to determine if you will be a good tenant and employers are using them to judge job applicants. So you can see that using credit cards wisely to build a good credit history can help you out. As you get older, having a poor credit history - or even no credit history - could be a disadvantage.

Another advantage of credit cards, if used correctly, is the ability to buy goods and services and not have to pay for up to 30 days. If the entire account balance is paid off monthly, the card holder is in essence getting an interest-free loan.

The disadvantages are all tied to running up charges each month that are not paid off. Balances carried forward to the next month incur interest charges that can be quite hefty, especially for young adults without much credit history. As the balance grows it can be harder and harder to pay off the monthly balance, or even make the required minimum balance. If an 18 year old charges $2000 on a credit card with a 21 percent interest rate - not uncommon for new users - and makes only the minimum payment every month, that $2,000 balance will not be paid off until she is 28!

I think it's a good idea for young adults age 18 or older to begin using credit and learn how to manage it wisely. You only need one card to start with and charge only what you can pay off each month. It's one way to learn good financial habits.