A 'capo' holds down the strings a certain fret. This is beneficial in many ways, including;
Changing the pitch of the guitar. This enables us to play more songs with easier chords. It also enables us to play songs in the key or the original recording. For example, Wonderwall by Oasis needs a capo at 2nd fret to sound correct
Changes the key to match the singers voice without having to change the chords we play
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