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The Ups and Downs of Writing Contests

Writing contests are a good way for new writers to get published in literary journals, because your submission is guaranteed to be read. Whereas when you send a straight submission to a literary journal, your cover letter is typically read first, alerting the reader to a lack of publications.

A lack of publications doesn't mean your work won't get read (in fact, some journals could care less and state this in their submission guidelines), but a history of success pricks up an editor's ears, which helps since journals receive hundreds to thousands of submissions per reading period.

Since submissions to writing contests are not accompanied by cover letters, your submission is on equal playing ground with the others. And it's usually a blind submission, meaning your manuscript doesn't include your name.

The Downs

Writing contests get a lot of submissions too, so although you'll get read, there will be plenty of competition.
Most writing contests cost money, so going this route can get expensive. (The contest fees help fund the prize monies.)
You typically can't simultaneously submit work that has been entered into a contest. That means that you have to wait to hear the results before sending your piece elsewhere.

Possible Ups to the Downs

Even if your piece isn't accepted as a winner, it might be considered for straight publication. The contest guidelines usually state when this is the case.
Some contest fees include a year's subscription or a copy of the edition with the winners. So you get something in return for your money.

Do Your Homework

Before submitting work to a contest, make sure the literary journal is an appropriate place to send your work. Otherwise, you're throwing money away and holding your work up for no good reason. Many print journals have websites, where you can read a sampling of work that has been published to get a sense of the editors' aesthetics. Some of these websites include the entire contents of past issues.