Can credit cards be used for good, or are they just evil? (Answer to Win $10!)

By Linsey Knerl on 9 June 2009 (Updated 30 June 2009) 102 comments

We hear both sides of the argument all the time here at Wise Bread.  Assuming that you think credit cards can be used responsibly, how would it be done?  And for those who think credit cards are evil, why do you think so, and what do you use instead?

Credit cards are not one-size-fits all, and either is the average consumer.  We'd love to hear your stories of credit card use:  what you think, what you’ve learned, what you wish others could know.  Do you have special rules for using credit cards responsibly?  Would you swear them off completely if you could?

Share your thoughts on this provocative question, and be entered to win one of two $10 Amazon gift certificates.  The randomly-selected, winning answers will be read live on Wednesday’s Living Large on a Small Budget Blog Talk Radio Show (where we will be discussing starting a small business with Season 4 Apprentice Winner Randal Pinkett)!

 Those of you who aren’t familiar with the “drill,” read below for full details:

Win a $10 Amazon Gift Certificate

We're doing two giveaways -- one $10 Amazon gift certificate for a random comment, and another one for a random tweet.

How to Enter:

  1. Post your answer in the comments below, or
  2. Tweet your answer.  Include "@wisebread" in your tweet so we'll see it and count it.

If you're inspired to write a whole blog post, please link to it in the comments or tweet it.

At the end of the drawing, we'll update this post to include (and link to) all of your helpful responses.

Giveaway Rules:

  • Contest ends Wednesday, June 10th at 7:59pm CST. Winners will be announced June 10th between 8:00 – 9:00 pm CST during our live Blog Talk Radio broadcast, and will be contacted at the conclusion of the broadcast (or you can call in live to claim your prize!)
  • You can enter both drawings -- once by leaving a comment and once by tweeting.
  • Only tweets with "@wisebread" will be entered. (Otherwise, we won't see it.)

 Good luck! 

For additional reading on both sides, see these articles:

Top Seven Reasons Why I use My Credit Card for Everything

10 Reasons Why I Prefer Credit Cards Over Cash

The Dirty Secrets of Credit Cards

Cash Vs. Credit? Which Side Are You On? (ManVsDebt via BargainBabe)


***We have our winners!  Congrats to these winning entries!  (Your prize is on the way!)

@The_Weakonomist 55% of credit card users carry a balance, 45% do not. So yes credit cards can be used responsibly


Comment #70 - Credit Card Trade Offs, Submitted by Jim 

The concept of credit card abuse is actually pretty simple: we tend to spend what we have.

Give someone a $1,000 tax refund and they will immediately find something to buy for $1,000.

Instead, why not write down what you want, starting with food and a place to live. Adjust your spending to your income and available resources.

This way you get what you really want and not something that you just buy because you have the money.

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Guest's picture

Evil, if you don't pay it off monthly. Deeply evil.

Guest's picture

I use a credit card for everything to take advantage of cash back rewwards and hello, you get 30 day float! I also use it to auto pay bills which translates to 60 day float!

If you're the kind of person who "has trouble with credit cards", which personally I have a hard time understanding, just think of it as a debit card. If someone replaced your debit card with a credit card without you knowing, you would still use it responsibly, correct?

Guest's picture

I think the only good practice for credit cards is if you absolutely know you will pay it off every month. Personally, however, my husband and I do not plan to ever use credit cards. I think it can be an easy trap to fall into.

Guest's picture

Mostly all evil. We have two credit cards. One is used for an auto pay for our website domain. It gets paid every month as soon as the bill is posted online. The other one is used only for gas. It is a lot easier to keep track of all our gas expenses when we put them all on the credit card. We like to pay at the pump to avoid being tempted by goodies inside the gas station. It is also paid as soon as the bill is posted online. Both of these expenses are budgeted for in advance.

Guest's picture

We use our card for everything and pay it off monthly. For one it makes managing the bills alot easier. You pay off one company every month and don't have to keep up with this check and that. We also love the freebies you get. We have flown to Napa Valley on our points and Washington Dc and still have two tickets waiting. We have gotten cash back rewards as well as points to knock of the price of a future car purchase. As long as you can, you might as well take advantage of it. The only thing is never leave a balance.

Guest's picture

Credit cards don't ruin people; people ruin people. You HAVE TO think of credit cards as a more convenient way of carrying cash. That is, DO NOT use a credit card unless you have that much cash (or will by the end of the month). If you know that you don't have that kind of self-control, then you must trash them all. I pay my credit card bills in full each month, but I do also like to know that if I ever had an expensive emergency of some sort, I'd be able to pay it back over time.

Guest's picture

If you use cards responsibly, then you can take advantage of some of some great offers. I often get cash bonuses on new cards and only use cards that provide points or cash back. If you have a card with no annual dues, pay your card in full and on time every month then there will be no additional fees associated with the card.

I also use my credit cards to automatically pay my cell, gym membership, cable, and various other reoccurring expenses. This way I never forget to pay my bills. I would rather have these accounts directly linked to a credit card, which provides some level of consumer protection, as opposed to a direct link to my bank account.

Guest's picture

But revolving credit definitely isn't for people with poor financial management skills. If people can't use them properly, they should restrict themselves to something like an Amex with a 30-day repayment period.

I use one for rewards and pay it 2-3 times a month to keep the balance at zero. I get a free tank of gas every couple months and can occasionally make purchases where I have most of the cash needed and don't want to dip into the emergency fund.

That said, let the free market do what it will as long as card issuers offer a clear contract with no cryptic language. If you want to pile on debt you can't pay, go for it. But when it happens, don't allow the person to write off the debt via bankruptcy, no exceptions.

Guest's picture

I think they can be used responsibly because my husband and I have been doing it for over 15 years. We have an AmEx card, which forces us to pay the balance off monthly. For a while we did the points, but now we do the cashback (up to 5% on groceries and gas) and use the card for EVERYTHING. We get $450-500 from AmEx each year just for using the card. I know not everyone can use credit cards wisely, but it has worked great for us.

Guest's picture

I use a credit card to purchase everything to take advantage of cash back and mileage rewards. I have a decent-sized emergency fund which I will use to pay off the card if necessary, to be replenished most often when my expenses are returned to me from my work. Because I do spend a lot of money on travel and such that is reimbursed, I earn a fair amount of money with my rewards cards.

However, now and in the past I have had ridiculously drawn-out customer service hassles with credit card issuers, as though my business mattered little to them. This, in my opinion, is the number one reason to swear off credit cards. Getting money refunded when they make an error or, heaven forbid, you processed a payment 1 day late and have incurred $80 in fees... these are serious considerations to make before taking advantage of rewards cards.

They are like the hungry wolves waiting to snap you up if you take one wrong step.

Guest's picture

Credit cards are like playing with fire.

Guest's picture

In the past, I have used my credit card and paid it off every month. Using a credit card makes it really easy to spend too much money fast! Currently, I have been trying to use only cash and it seems like I think more before I purchase items. The card isn't the bad/good thing it is how the person uses it!

Guest's picture

You can use your card wisely every month and still end up with a mark against you. Example: I made a payment over the phone 3 days before the payment was due,I also had to pay a fee for this service. When I received my following monthly statement,I had a late charge fee of $29.00. I call the card company and told them that I had made the payment 3 days prior to the due date. I was told that they had technical problems and that my payment didn't post until 2 days after the due date. I protested,they would not correct their mistake. I received a late pay mark on my credit,plus I had to pay the late fee. It's not just the credit card that gets you into trouble. It's also the card company,even when you do everything right. They own you!!!

Guest's picture

Why not pay in full when the bill comes in the mail?

Guest's picture

I'll second the 'good' opinion - even if only for the cashback!

Guest's picture

I'm just a couple of months in on budgeting and controlling my spending but I'm trying not to get on the "credit cards are evil" bandwagon. I don't carry mine with me currently, but once I've learned to control the impulse to just go around willy-nilly with my cards, I can see using them as others have mentioned in previous comments. I know Ramseyites and others see them as evil but to me, it's not the cards or even debt itself that's evil, but it's the use or misuse of them that determines whether they are good or evil.

Guest's picture

even cashback and rewards points cannot outweigh outrageous APR's and annual closer to your means (i.e. paying cash for 85% of your purchases can only be good for your personal well being)

Guest's picture

If you pay in full each month, you'll never pay a single cent in APR.
You still get the same rewards.
Plus, paying in full is better for your credit score.

Guest's picture

In my experience, credit cards have been more good to me than bad, since I pay on time and in full most of the time, given all the sweet cashback deals available. If, however, the new laws cause these deals to disappear, I may have to switch to debit cards.

Guest's picture

We carry two credit cards: one for day to day purchases and one for "big" purchases, such as airplane tickets or whatnot. The day to day card is paid off every month from our regular income. The big purchase card is paid off (usually) any month it's used from savings or regular income unless the purchase is a surprise for which we didn't save. The big purchase card has a lower interest in case it cannot be paid off. Both earn points/cash back for different programs.

Guest's picture

As others said, you need to be responsible, but there is nothing wrong with credit cards. The cash back is great, but I use it more for buyer's protection - you don't have the ability to do a chargeback with cash, a check, or even a debit card in most cases, but I know that if a merchant screws me I have options (for the record I have only had to use it once, when a company took my money and then went out of business the next day before they shipped my product). You also get warranty extensions on some big-ticket items that you would never get if you bought them with cash. Plus getting robbed or losing lot of cash means you are out the money, but you can cancel a credit card if it gets stolen or lost.

There is nothing wrong with credit cards if they are used responsibly and paid off at the end of every month.

Guest's picture

Using credit cards allows us to more easily track our expenses (download directly into financial management software), and we get cash back at the end of the year on our purchases. It is very hard to buy things online without a credit card, and that is usually where the best deals are.
There is significantly greater accountability for our expenses when they are not hidden in cash purchases.
Credit cards are just like any modern convenience. They enable us to do more, whether we use that enhanced capability well is up to us.
We pay off our credit card bills in full every month. But that means up to a month that we are earning interest on that money, instead of the credit card company.

Guest's picture

In 2007, we got an American Express card. It had a $2000 limit and we used it a lot but paid it off every month to get the travel rewards. Toward the end of 2007, my husband's company filed for bankruptcy and he lost his job. We still paid it off every month because he had fairy steady consulting work even before he finished his last day at the old company.

However, as consulting work dried up in the middle of 2008 and he wasn't making any money, we weren't able to pay off the balance in full anymore. We paid actually paid $400 a month and not the $39 minimum payment, and we were never late, but we didn't pay it in full.

American Express was thrilled with us. We were finally paying finance charges on our stuff! Of course, that $400 was rotating. We'd pay it and over the month charge it again.

When my husband finally went back to work earlier this year and we paid American Express off in full again, they cancelled our card the same day. VOIDING $300 in Travel Dollars at the same time.

So, I no longer think that using a credit card for the travel miles or points is worth it. I also never plan to have another credit card. It only took once for the lesson to sink in.

Guest's picture

We always pay our card off every month and thought we were getting a great deal by getting rewarded for purchases we would have made anyway. HOWEVER, we recently switch to paying with cash and our monthly expenditures have dropped enormously. We spend about 25% of what we used to every month!

The problem with credit cards is that everyone THINKS they're super financially smart. So people say "credit cards are good as long as you're good with finances" and no one thinks they're bad with money, of course.

I majored in math and I work for a financial institution. We put over 50% of our income into saving every month, so I thought I was *so* smart by using my cash rewards card. The joke was on me! We will be using cash from now on.

I would encourage anyone to just give cash a try for 6 months and see if anything changes.

@charles: If your payment was only 2 days after the due date it won't give you a bad mark on your credit report. You must be 30 days or more past the due date to get dinged on your CB. So, if your due date was May 10th your payment would have until June 9th to post before it will show up with the credit reporting agencies.

Guest's picture

I think its too easy to through around a dramatic duality like GOOD VERSUS EVIL!? but there is a lot interesting going on with credit cards so here goes.

From a macro perspective we hear a lot about credit being the grease that keeps our economy lubed and such tortured metaphors. Here I'm speaking about the transaction costs of credit network, usually around 2% + a small fixed amount. The US has a consumer based economy so making sure that the money is in the right place at the right time is a valuable service. And for providing this valuable service it is reasonable for the firms providing the credit and running the networks to make a profit. Is the amount of profit that they are earning fair? That of course is a difficult question, competition in this area is hard to come by so the answer is probably that it is not fair and that the companies are over-compensated. For evidence take a look at how Discover recently won suits in the $100s of millions against VISA and Mastercard. Also, the Internet *should* be dramatically lowering the cost of doing business, that has not been realized for the traditional payment architectures. They *will* eventually have to give ground, though it is likely they will leverage their existing power to prevent that as long as possible.

Also on the macro level is the consideration that a large part of the CC companies' business model is predatory. Its not necessary to delve into this too deeply, everyone is familiar with the 20% interest rates and the fees on top of fees, and the gotchas, and how the companies seek these people out. There's a social cost to this beyond the credit costs of banks. Lost opportunities, lower productivity, education bypassed, health effects, etc.

Lately I've thought a lot about the moral dimension of using reward credit cards. I get 2% back in rewards when I use my card, those costs are absorbed by the shoppers that use cash. Is it an ethical thing to do for me to impose those costs on them? Further, if they all start using credit cards too then the "reward" essentially disappears because the retailer has to raise prices. So, in pursuit of the "reward" all of us consumers end up losing.

Guest's picture

We pay our card off in full every month, and earn the cash back bonus on all our bills and regular spending. So for us they've definitely been a good thing and been able to help beef up our savings. We keep the money to pay the card in a savings account so that we also earn interest on it until it's time to pay the card off.

Guest's picture

If used responsibly, they are good. The number one reason I like them is to keep track of expenses since I either lose the receipt by the time I get home or certainly by the time I enter it in my tracking software. I have tried keeping track of the cash expenses but I inevitably have unaccounted for money loss.

Guest's picture

I wrote a post about credit card use a while back at

Basically I think Credit Cards should be used like cash. If you have it and really need something, buy it. Otherwise, put the purchase on hold or don't do so!

Credit cards can help in many ways. Less cash in your pocket to carry around, 30 extra days to pay off what you purchased, points and rewards, etc...

One lesson I learned very early on, always pay off the bill in full at the end of the month! A credit card is a financial tool! Like all tools, it can be used for good and bad. You just have to learn to use the tool properly!

Guest's picture

I don't use credit cards anymore, I use my debit card. If I don't have the money, I don't buy it. This has served me well for at least ten years, traveling or staying at home. It secures motels etc. just as well as a credit card. I'll admit I don't handle credit cards well, this keeps me out of trouble and away from extra charges. I feel it's time we all put the nix on uneccesary credit. It has gotten so far out of hand, especially as a nation. I wonder if we even own our own souls anymore!

Guest's picture

Credit cards actually were a great invention, they allowed people to stop buying things on personal finance loans where they were forced to borrow more than they needed at higher interest rates. Pawn shops and "community" lenders (mob) were less used. Credit cards are not inherently evil, see the EconTalk podcast on 3/2/09 "Zwicki on Debt and Bankruptcy".

The argument that credit cards are too easy to abuse is flawed, any tool can be used as a double edged sword. A knife can cut an apple or your throat. A toy can be used for enjoyment or for eating and choking. A bike can be a great form of transportation/exercise/enjoyment and a dangerous mode of playing in traffic. American fast food can be enjoyed sparingly or in excess.

The counter argument, is that I have a working brain. Do I supersize a mcdonalds meal everytime the cashier asks me? No, because I do not want to. I am conscious when I make decisions, especially with my money.

You can trace the irresponsible use of credit cards to many factors (parents, environment, education, psychology), but the fact is nobody is forcing you to carry a balance or buy stuff you don't need.

Guest's picture

Credit cards are the bee's knees.

Excellent consumer protection and convenient float for the consumer.

Reward cards give you 1%-5% cash back on purchases.

Pay them off (push, not pull) electronically and forget about stamps.

Debit cards are a poor substitute, offering almost no legal protections for the end user (only convenient for the bank)

Guest's picture

If you pay them off, they're just peachy, especially the rewards ones. If you allow them to build up balances and ruin your life, not so great.

Guest's picture
Matt B

Of course CC are good! So long as people pay them off monthly and are getting the most out of the rewards, that is. Hopefully all this talk about all CC's having an annual fee will go away because no one likes to pay for that.

Guest's picture

As much as I would like to go on with some meaningless diatribe of the pros and cons of creadit card use, the cold plain fact is they are safer than cash and a must with on-line purchases.

Guest's picture

I have been using credit cards since 1990 and never ever carried a balance on them. I use one regularly and keep the other just in case my primary card does not work or is stolen. In order not to lose the second card, I use that for a few small purchases during the month and when my bills arrive, they get paid in full. If you stick to a budget and follow your purchases religiously on a daily basis, you never have to pay interest on them. The trick is never to live beyond your means. I use credit cards as a means of payment not a credit source.

Guest's picture
Anne T

I think credit cards are Good if you are financially responsible and I think they are Evil if you don't have much fiscal responsibility.......(I've filed bankruptcy once and hubby has twice)

Now we pay off anything that I charge in full when we get the bill!

It took a while and alot of humilation but we finally learned our lesson!


Guest's picture
Jackie H

...on how you view credit cards, I suppose. I grew up not knowing that you can pay just the minimum but thought that you HAD to pay the full balance every month (that's what my parents did, so I just assumed it was the standard practice). So that is what I did when I first got my own card in college. I did eventually find out that you didn't have to pay the full amount but b/c that's what I was doing, I didn't veer from it. But I feel that as long as you treat it like a debit card and buy things you have the money for already, you can reap the benefits of credit cards. Aside from cashback, gift cards, etc., I view it as another way to safeguard our purchases (ie if the vendor does not deliver the product, I can call to dispute the charge) and to get automatic purchase insurance/rental car insurance when you have that sort of card. And because I had the money before I made the purchase but now had some extra time to pay it, I put it in an interest-bearing checking account and made a few bucks off of money that was not really mine anymore. :)

Guest's picture

I'm the opposite of most people. If I have cash in hand, it flows out like water through a sieve. I waste it in soda machines, at fast food restaurants, give it to friends who need a buck for the snack machine, leave a big rounded up tip at a restaurant, buy junk at yard sales and food markets... I just find it way too easy to squander cash--so I try not to carry it. I find that my credit card gives me the discipline I need to budget wisely and not spend impulsively. Online accounts help me track my spending, and I get cash back rewards because I always, always pay off the full amount each month.

Guest's picture

In the past I would say maybe if you pay the balance in full, but with all the talk of cards dropping the 30 day grace period and increasing fees I would say no. Get out while you can before they change things. Most cards have fine print that says they can change almost anything without much notice.

Guest's picture

Credit cards even after the new legislation are pretty damn evil. They still allow the desperate, ill informed, or those without self control to screw their lives up majorly for years upon years to come. That said . . . if you're informed, not desperate and have self control there can be gains by dealing with the devil.

Guest's picture
Jason G

Credit cards are not inherently evil...they are a tool. Just as a gun, knife, hammer or even a pencil could be used for evil, they only become so when they are used inappropriately. However having said that, I only use them if I planned a purchase and would have spent that amount of money anyway...studies show that people who use credit cards without planning (even for simple things like gas or groceries) spend roughly 30% more than people who pay cash. It’s easy to fill the tank with a credit card rather than put $20 in the tank and make it last the week.

Guest's picture
Rick Francis

A credit card is just a tool- it's use (or misuse) generates good or evil.

-Rick Francis

Guest's picture

I think credit cards are good for emergencies. You're not meant to live off them. People that go shopping just because there's a sale and then put it on a credit card must not get that there's no point if they're not going to pay it off right away! Duh! You end up paying full price in interest! We only use ours for credit reasons and to get some cash back points. However, they are not used day-to-day and they get paid off, when used, every time.

Guest's picture
Julie M

I use my credit card for everything and pay it off as soon as I receive the bill. I get 2% cash back on EVERY purchase. Once I reach $25 I have the option to redeem my rewards. At the click of a button I get a check for $25 mailed to my house. Now don't get me wrong, I'm not going to get rich because I am after all spending more money than I'm making but it is $25 that I didn't have before.

This is only beneficial to people who do not carry a balance on their cards. If you aren't responsible with credit cards, don't use them!

Guest's picture

Personally, I love my credit cards, but I use them responsibly. Here are the reasons I love them:

1. Travel rewards. I have a rewards card, which has allowed me to take two foreign vacations using miles mostly accrued through purchases.

2. Easier bill management. I send all of my monthly bills to one card, so I only have to pay one bill every month.

3. Better fraud prevention. Banks say they offer protection against debit card fraud, but you'll still experience a period where your money isn't available to you. That's not true of credit cards.

4. Ability to rent things. Sure you can use a debit card or cash to rent a car or truck, but you have to bring the cash for the deposit with you or be willing to have it locked up by the rental agency. I'd much rather have a freeze applied to my credit card than tie up real money while on vacation or moving.

People do abuse credit, and credit can get people into trouble (see current economic crisis), but people who are financially responsible can and do use credit wisely to make life easier. Maybe rather than hating credit, we should actually be educating our nation's teenagers about proper credit use and financial management skills.

Guest's picture

Credit cards can be a very effective way to actually save money if you're disciplined. I have a Marriott Rewards Visa, which I only use if I have the cash in the bank to pay it when it comes due. I keep a fairly complicated spreadsheet updated at the end of every couple days where I ensure I'm not using the card for absurd, thoughtless expenditures. I don't travel too much, but when I do, I always have enough points to take care of the room expense. This makes it so much easier to guiltlessly go to friends weddings or other special events while on a tight budget.

Guest's picture

The only responsible use of a credit card is to pay it off each month without fail. A credit card can be good if shopping online, because the charge can easily be reversed if the seller is not honest, and the merchandise isn't as claimed. I use credit cards for the rewards, and I record it as if it was cash into my register for each charge to keep track of my money. I will not pay a yearly fee, if any of my cards begin to charge one, they will be closed immediately. It can be good for an emergency, but only for purchases that can be paid back immediately

Guest's picture

CC's have helped me get out of debt. I play the game and build my credit score at the same time. I constantly get offers for 0% APR. When one promotion runs out, I transfer my money to a new 0% APR card.

CC's aren't bad... it's the people who use them that can be irresponsible.

Guest's picture

I use my card for everything to earn the max number of awards. I always schedule my payments in advance as soon as I receive the online statement. I also track my account and purchases in Yodlee Money Center to see on what categories I'm spending most of my money.

Guest's picture

It is really very simple. Don't buy with a credit card unless you have the money. I have never paid any credit card fees or interest and yet I use a credit card for most of my purchases. I have done without on many an occasion until I have saved for what I wanted. The result is today I am debt free and my concerns about interest revolve around the rate I get on my savings.

Guest's picture

I agree that credit cards can be dangerous, but I also believe that credit cards can be a powerful tool in keeping finances organized when used responsibly. My wife and I were in significant debt about two years ago (mainly due to abusing the privilege of owning a few credit cards). We decided to pay everything off and start from scratch ($0 balance) and since then, we've paid everything off each month and have accumulated about $1,500 in rewards dollars by being responsible.

So yeah, I know firsthand how dangerous and tempting they can be - but that alone isn't a reason to avoid using them. Evaluate your willpower and your financial situation and see if they are a fit for you. If so, more power to ya!

Guest's picture

I have used cc forever, paying before the due date. Have stayed for free at hotels many times, received free flights and car rentals. Also they're needed for hotel check-ins, renting a car, etc. and specially to build your credit history. Using them wisely is the key.

Guest's picture

If you have the cash to pay off at the end of the month, why not pay cash when you make the purchase. I understand internet purchases but I have a debit card and a local bank that will back it same as a credit card. I don't earn miles or cash back but I also don't play with snakes, play often enough and you WILL get bit.

Guest's picture

There's nothing a credit card can do that a debit card can't, at least nothing that's all that important. Ditch the credit card. If you need to take out a loan, take out a loan, but don't settle for one with usurious interest rates.

Guest's picture

Like others, I pay off my card every month and earn rewards of much greater value than the annual fee. Also, when my son was in college, I received an offer for a card that was interest-free for one year. I used it to pay my son's tuition, food, dorm, books, and other college expenses for his last year. I paid as much as I could each month, paying it off by the time the year was over and incurring no interest. It turned out to be a much better deal than a Sallie Mae college loan, but only worked out that way because I've always been well disciplined on my cards.

Guest's picture

We only use Credit cards to make large purchases and for travel expenses to take advantage of rewards and also extra warranty protection. We pay the balance off every month. We don't buy things that we can't afford to buy with cash otherwise. You have to be responsible. Lots of people get caught up in the mess, which is how the CC companies stay in business, but not because of me.

Guest's picture

I use a credit card for everything. I don't understand this "trap" people talk about. If you are fiscally responsible, you are spending less money than you are bringing in. If this is the case, there is absolutely no reason not to pay off your card every month. Don't spend money you don't have.
Plus I get a check in the mail about 3-4 times a year with free money from rewards. Free money and living within my means? Sign me up!

Guest's picture

I love reading the reasons people say that credit cards are good. For every reason there are many more why you should not have a credit card. I will try to cover most to show you that credit cards are a bad idea.
1. The most I hear is the rewards. Research has shown that when people use credit cards there avarage purchase goes up sometimes as much as 30% higher. Why is that? Because people don't have the emotional connection like they do with cash so they think they can just pay it off later or will have the money later. An example of this is when McDonalds started taking credit cards the average sale when up close to 30%. So you get 5% cash back but you are spending 30% more bad idea.
2. I have protection when I use a credit card. True but you have the same protection with a visa debt card. If you have a visa debt card you are not responsible for any unauthorized purchases (check out visa debt card website).
3. They pay my bills automatically and make it easy. Sorry but most if not all banks (my credit union does) offers that though their online banking. It goes straight from my checking account to who I need to pay with no fees and it happens overnight.
4. A credit card helps me keep track of my expanses. I use Microsoft money and I can tell you how much my power bill or any other bill from 3 years ago was with in sec.
I have not had a credit card for 3 years and I don't miss them at all. I can do everything with my Visa Debt card that anyone can do with a credit card. I have paid no interest, no late fees, and I am debt free and loving it. I don't play with snakes because they will bite ( rate increase, one missed payment and you have late fees, changing payment date so your late, losing your payment so your late, changing credit limit) No Thanks

Guest's picture

If you are disciplined and smart about it, credit cards are a great thing! My rules are:
(1) Carry no balance
(2) Pay the bill in full each month ON TIME!
(3) Don't spend more than you can pay off in full each month
(4) Track credit card spending so it's not a surprise when the bill comes

I recently wrote a post about it also.

Guest's picture

I got so many gift cards to give out as Christmas presents this year by using my "miles".

I use my card to pay bills that I would have to pay in full anyway. For instance, my dentist requires full payment at time of service, so I charge the visit and pay for it right away. I also pay my family cell phone bill and tv/internet/phone service bill on line with the card. These bills also have to be paid in full.

I budget money for things like groceries and gas. I charge them and pay at the end of the month.

One tip I'd like to share though...I always have a second credit card as a back up, in case something goes wrong with the first one. This card I only charge about five dollars a month on. I'd hate to be on vacation trying to rent a car, to hear that my credit card "did'nt go through."

Guest's picture

Credit cards are good if you are financially responsible and able to live within your means. This all comes down to knowing your money and how to manage your finances.

Credit cards are evil if you spend more than you have and you live like you make millions a year. If you could care less about your credit score and love to live on borrowed money. I understand some people struggle financially due to having to work and go to school full time just to survive, but most people I know in that situation tend to own an iphone with a $79/month plan or have cable TV.

Bottom line...your credit card can't walk itself to the register and charge your money. It's your money, you spend it how you like, and you need to take responsibility for the outcome. All the talk about traps or evilness comes down to the person, not an object.

Guest's picture

credit cards are just like any tool... if you don't bother to pay attention, misuse it, or do something stupid it will likely cause you harm and it doesn't care(in fact card issuers will gladly charge extra fees if you screw up). They are not inherently good or evil, just depends on the hands that hold it.

I pay off balance monthly and take advantage of rewards, it gives me essentially a 30 day loan period where my money can stay in the bank and earn me money rather than someone else, and I get the added value of a percentage back for using it to pay for things I buy anyway.

Guest's picture

We use our COSTCO AMEX card for cash back rewards. There is nothing like making from spending money. :)

Guest's picture

credit cards can absolutely be used for good by responsible people. cards can be used in an emergency to bridge a gap between a need and the availability of cash. such as a late night car tow or something with no ATM in sight.

Guest's picture

credit cards can absolutely be used for good by responsible people. cards can be used in an emergency to bridge a gap between a need and the availability of cash. such as a late night car tow or something with no ATM in sight.

Guest's picture
Holly Marie

I love the card rewards and tracking spending with the monthly statements, but when our card was recently used repeatedly by scammers for online subscription services, VOIP and more, I realized I had gotten lax. I wasn't checking my statements regularly, and I'm pretty sure I've started to use my card to buy more than I would if I just used cash. The new higher rates and questionable rules raised my eyebrow as well. So it's back to basics at our house. I use my card for traveling, for making big purchases and buying online. It's easier to track things this way, and I feel more secure since I've established some guidelines. And, more importantly, I'm spending less.

Guest's picture

if you have the right card and use it the right way, they are fantastic! Especially for those days rainy days (literally) when I'm rushing from meetings or running late with baby and need a taxi and realize I don't have any cash! So if they are a must, use to find the right one- totally personalized recommendations and free!

Guest's picture

I'm in favor of using credit cards. My husband and I have two cards that each give us back 1% for every $1 that is purchased plus one of those cards offers 5% cash back when you use it to make a purchase for gas,in a grocery store and in a pharmacy. We charge everything and pay our bill in full every month. We receive about $600-$750 dollars a year (tax free) just for using the credit card. Why would anyone not want to get paid back!?! Another thing we do to use credit cards to our advantage is by using "0%" offers. We only do this if we have the cash to cover the full amount of the item we want to purchase. We put the cash into a short term CD or high interest bank account. So while we pay off the charged item at "0%", we are gaining interest on the cash. Both of these methods have really added to our savings over the years!

Guest's picture

An object is usually not evil, only how it is used.

Consider credit cards or movies or dance or marketing. All of these things can be good or bad depending on the intent of the person using them.

Are they trying to take advantage of another person through enticement and greed? Unhealthy sex? Half-truths and lies?

Or are they using honesty and transparency? Relational Giving? Beauty and grace? Timeless truths?

Credit cards are not evil. But people and systems can choose to be.

Guest's picture

We use our credit card responsibly by linking it to our budget at By putting every transaction on the credit card, every dollar we spend is automatically accounted for. And when we max out a budget category, we stop spending in that category, so we can always write a check for our full balance every month.


Guest's picture

miles, miles and more miles. just make sure u can pay in full at the end of each billing cycle.

Guest's picture

The concept of credit card abuse is actually pretty simple: we tend to spend what we have.

Give someone a $1,000 tax refund and they will immediately find something to buy for $1,000.

Instead, why not write down what you want, starting with food and a place to live. Adjust your spending to your income and available resources.

This way you get what you really want and not something that you just buy because you have the money.

Guest's picture

Credit cards themselves are neither good nor evil, it's all in how they are used.
Used for purchases which can then be paid off when the bill comes, they are a great convenience and can offer some rewards (cash back, air miles, etc). Used in times of emergency when they can be paid off relatively quickly, they can be an added convenience and an acceptable trade off between cost and convienience/comfort/family obligations/etc. Used for purchases which can not be afforded, they can cause large financial problems which can manifest into problems in other areas of life.

It's all in how you use them.
For me, personally, I pay my cards off each month. For using them, I receive air miles, store discounts and the convenience of not having to pay cash for everything. I also am able to rent vehicles, make purchases on the internet and know that, should the need arise, I can be drive directly to the airport and be on a plane to be with my family in time of emergency in just a few hours. That last bit alone brings me extra piece of mind that is worth a good bit to me.

Guest's picture

We love our credit cards. They get paid off every month, but we use them for everything so we get lots of (cash) rewards. Plus, if there's ever an emergency, it's a quicker way to get to our money than waiting to get it from our online savings account/emergency fund.

Guest's picture

Credit cards are good as long as the user is responsible- and by that I mean they pay off the balance on time, are careful about going over the limit, do not use the card for cash advance, etc. Like other commenters, I appreciate the frequent flier miles and other rewards that come with the credit cards. Also it is simply more convenient to pay w/ the credit card instead of carting around a wallet stuffed with cash all the time.

Guest's picture

I use to pay everything up from about $15 with the Credit Card (only one), and I have that free money for one month. I pay all at once, which means paying no interest.
Biggest advantage is, first day of the month, I know how much money I must keep apart to pay what I bought.
Of course, paying all at once means you can not spend above your means (which is what the CCard company tries, giving you a too-big allowance, and frequently phoning you to offer low rate extra loans).
I had before a card which gave back a % from the spent money, but they began to charge too much.

Guest's picture

I use a credit card for all my purchases. I think of it as reverse interest because I pay it off in full each month. So I essentially have 30 days to pay money back and it's a reward card so I'm making 1-3% back and interest in the bank for the 30 days I didn't have to spend the money.

However, if you don't pay your card off in full each month then you shouldn't touch a credit card. It's too dangerous and I've watched my brother and aunt feel the detrimental effects of this amazing yet dangerous tool. It happens too quickly and snowballs out of control (e.g. "Oh it's only another hundred dollars, I'll pay it back in a few months"...I hear this and think "Sure but it's no longer a hundred dollars it is now $120 and most of the time they don't get $100 of value out of it [definitely not a $120 out of it]).

My advice is be careful. If you pay it off each month and feel confident in doing so then credit cards can be a great tool but if you don't feel comfortable with your finances or are on rocky ground then I'd steer clear.

Guest's picture

There's a financial writer who says credit cards or debt are slavery. Debt is not slavery. Bob Johnson founded BET with a $300,000 loan--later sold it to Viacom for $3 billion. Credit cards are a conveneince; poor budgeting is evil. Credit cards give me safety: I carry no cash and have federal protection for theft or unsatisfactory purchases. I have a free 30 day 'loan' to pay off purchases, PLUS cash back at the end of the year on that January bill with all the Christmas purchases. I pay it in full every month. The monthy bill provides a one stop view of where my monthly expenses are going, which helps with budgeting and tracking tax deductions. It save me time to swipe and go, no need to search for change or write a check. At gas stations, no need to even go inside. Credit Cards are tools, and not inherently good or evil--they're useful tools. Misusing the tool is weak. Expecting to acquire what you can't afford and not pay the piper eventually is weak; don't blame the credit card. As long as you pay it off every month, they're earning you money, and help you manage your money, so are an asset to your financial goals.

Guest's picture

If you can pay them off every month, they are good. Sometimes it is just not convenient to carry cash.

Guest's picture

Usury is a word we don't hear any more but for centuries charging interest - or too high of interest - was usury and it was considered evil. Credit card companies charging 18-20-26% interest is usury. Many other practices of credit card companies are unfair as well - raising a card's interest rate because of a late payment on another card, for example.

Some people enjoy the "perks" of credit cards, but they are able to do so because of the misery of others held captive by credit card debt. How do you think the credit card companies can afford to give extravagant perks to people who pay off their bill in full and never pay interest?

Credit cards are a convenient evil - and sometimes credit cards are the lesser of two evils, as when one cannot afford food or medical care right now and so put those charges on credit. Serious illness or loss of a job typically cannot be handled by budgeting. Credit is an immediate answer that can create years of problems.

Guest's picture

I put everything on my Amex card, and it helps me be the most frugal I can be. A recent example was at the grocery store. My local Acme was having a "sale" on their gift cards, essentially selling a $330 gift card for $300 - 10% off. I like saving 10% on groceries, so I bought quite a few of the cards - no limit - no expiration. Next, I paid for the cards using my AmEx ... another 3% off. Now I'm saving 13% on groceries. Of course, I also haunt the coupon, freebie and discount online sites and clip coupons like mad. Now, with the Acme cards and a fistful of coupons, my grocery bills are regularly and reliably discounted by 27 - 33%.

And, on large purchases, I use my credit cards to negotiate a lower cash price for goods all the time. If I can get to the owner/manager, I can usually get them to lower prices by at least 5% by accepting cash rather than have to pay the merchant fee if I whip out the plastic. You would be surprised how often this works.

Of course, be careful with credit cards. A chainsaw is a useful tool, too ... until you disrespect it.

Guest's picture

If you maintain good credit and can get 0% offers, they can be aren't evil, people are just irresponsible.

Guest's picture

But often an implement of stupidity. There's nothing to fear from credit cards if used responsibly. I use credit cards almost exclusively, but I'm always able to pay off my balance every month. With cash rewards, using my credit card is like getting a small discount on everything I buy. And since the cashback rewards I get are automatically applied to my CC balance at the end of the year instead of sent to me in a check, I automatically use it to pay off my bill instead of going out and buying something with my "windfall".

An added benefit of credit cards is that since I can pay for most things with a credit card, I don't need to keep much money in a checking account, leaving me free to keep it in a savings account with a higher interest rate.

Guest's picture

Very useful - but only if you pay them off every month. Not carrying cash is a big benefit. Getting a 60-day float by paying automatically is another. The various rewards are just gravy. I still wouldn't pay for a card and I prefer the ones that pay cashback to those that give reward points.

Guest's picture
Marla T

If you use self-control and discipline yourself to pay off each month what you charged that month, then I believe they can be a good thing, especially if you have a card you can earn valuable rewards. Thank you for the entry.

Guest's picture

Credit Cards are good when used to the account holders advantage. This takes discipline.
I personally use one credit card. It is a card that pays me back in free groceries via "checks" sent to me once a quarter. I am given a percentage back on each purchase. I charge everything on the card, frequently check my balance online, and immediately pay it off. I still earn free grocery money. I typically earn $70.-$80. each quarter. I then use coupons with my grocery "checks" and turn the $70-$80 into $140.-$160. worth of food for my family.

Guest's picture

My father has glaucoma. During a routine eye exam for new glasses, it was discovered that my eye pressure was also very high. Glaucoma can be hereditary. I've been laid off for a year and wasn't able to afford the medical portion of Cobra. Since I saw (no pun intended) the damage to my father's now almost non existent vision, I knew I couldn't waste time. The various tests I needed were expensive and since a payment plan wasn't available, I was very glad to use a credit card to pay for them. My interest isn't the best, but I gladly pay my bill every month without complaint to be able to be proactive about my health.

Guest's picture
Ms. Ferret

I use my airline Visa for everything but rent. I treat it pretty much the same way I would if I were using a debit card -- if I can't pay something off at the end of the month, I won't buy it until I've saved up for it.

If you can afford to pay cash, why not pay cash?
I don't like carrying large amounts of cash unless I'm buying from a place that offers discounts for cash purchases, like a gun store.

As for debit cards -- while consumer protections on debit cards have improved, my debit card still doesn't provide me with a free flight to HI every year.

Credit cards charge fees if you pay them late!
Yes, credit card companies will dock you if you pay them too late. There is a pretty easy way to avoid this -- pay your bill on time.

But studies (done on college students) show that people spend more money with credit cards!
Wait -- so teenagers are more likely to overspend if they are handed credit cards? You don't say.

I'm getting really sick of hearing that ALL people helplessly spend more money with credit cards than they would if they just used a good, wholesome checking account. I have no doubt that it's a problem for some people -- but seriously, if you're looking at purchases like "well, I wouldn't buy this if I had to use cash, but I've got this magic plastic thingy that makes it free", I'm guessing you'd probably be paying a lot of overdraft fees on a checking account anyway.

Personally I find that I spend a lot more with cash. I used cash-only for years, and while I never spent more than I earned, I never saved up a whole lot either. I just had no idea where anything went. If you hand me 5 $20 bills, I'm far more likely to spend it on something stupid and embarrassing than if you credit my Visa $100. I don't want an alert from Mint saying "unusual spending on embarrassing crap" showing up later in the month.

Guest's picture

Credit card companies often have packages, promotions, and offers to increase your credit card limits. If you already know you can't handle your money wisely or if you're in debt already, do not accept these offers.

Guest's picture

CCs help me manage my money better than debit cards or cash. I'm in college, so I don't have a ton of expenses nor a ton of cash coming in. Using MS Money seems kind of silly. Paying with debit or cash would let purchases be lost in the shuffle. I can see nearly everything I bought online in five minutes, and can adjust my spending habits accordingly.

Plus, I pay my CC off every month, so why would I turn down potential rewards and free money?

Guest's picture

I teach an online introductory science course for a state university. It seems like every semester at least one student emails me the second or third week of class that s/he hasn't been able to participate in the class yet becuase s/he is still waiting for a reimbursement check from financial aid. Oh, and s/he has missed several class deadlines because of it and could I reopen those quizzes etc. for them to take once they finally get their required textbook etc.

I think that this is one specific case where using a credit card would be a very good thing. 1) They know that they're getting a refund check eventually. 2) They need the required course materials now. Not too surpisingly, these unprepared students have a very difficult time getting caught back up again.

Thanks for letting me rant a little.

Guest's picture

Like "The Force," in the right hands, it can be used for good.

Guest's picture
Ann Marie

If you can pay off the monthly balance, then in general, the credit card won't cost you anything. And it's very important to keep lines of credit open to increase your credit score and build a credit history. This will be very helpful when negotiating for loan terms of houses, cars, etc.

Guest's picture

I think they can be good if used carefully.

I think that mostly they are evil, though, because an unwary borrower may fall prey to the traps set up by the credit card companies. I also think it is kind of evil to solicit college students for credit cards by luring them with free t-shirts and other prizes.

Guest's picture

Credit cards, if used responsibly, can be a really useful tool, and they can have a lot of benefits that a lot of people don't use or even know about. We especially love the warranty protection plan offered by our American Express card - it extends the warranty of purchases made with the card under certain conditions - it has come in handy on more than one occasion!

Guest's picture

I once came across an interesting Bible quote (from Proverbs I think): "The borrower is servant to the lender." I suppose from a philosophical standpoint, credit cards are either good or evil depending on how you feel about a financial arrangement that makes you into a servant.

Guest's picture
Annmarie W.

In our family, we use the Discover card for pretty much all of our purchases! We make sure to pay it off in full each month to avoid any finance charges. And we use the cashback bonus that we earn to buy Christmas gifts for everyone on our list each year!

Guest's picture
Spedie scraping grout! For 13 years, I paid my balance, in full, every month. My average was about $1K per month. Add all that up, and that's $156,000.

Do I have a house to show for it? NO.

They do make good grout scraping tools, though, that's the best thing I can think of for their use.

I haven't had a CC now in 2 years. I am debt free, huge savings account, and no longer a slave to predatory lenders.


Guest's picture

i work in the fraud dept of a major credit card company. one good thing about using credit cards instead of cash is that if you lose (or someone steals) your cash it's gone. however, if you lose your credit card legally you are only liable for the first $50 and many banks will not even make you pay that. the bank that i work for covers its customers 100 % for any fraudulent transactions. also, when using your atm/debit card you should always use it as a credit card if given the option because there are different laws with regards to fraud with atm cards and you may end up being liable for it all if you don't.

that being said, i agree that credit cards should be paid off monthly when you are able to do so. there are times however when this may not be possible, as we all know.

Guest's picture

It really depends on the individual. Which is why personal finance should be taught in high school and personal responsibility taught at home.