I love getting questions from readers. While I try to respond to each one, some do slip through the cracks. When I get the same questions over and over, I know those are topics I need to write a blog post about.
Today’s topic is one of those. After they learn that we rapidly paid off $144,00 in debt (I’m still in shock about that), people are often surprised to learn that we use credit cards. Many debt-smashing advocates are decidedly against using credit cards.
I’m totally fine with that. If you don’t want to use credit cards, I totally respect that. We can still be friends.
If you have a moral aversion to credit cards, it’s definitely not worth using them for the reward points or any other perk. Compromising your integrity for convenience or rewards wouldn’t ever be worth it.
Are credit cards evil?
To me, asking if credit cards are evil is like asking if the internet is evil or if a hammer is evil.
Neither is inherently good or evil. They are just tools. They can each certainly be used for good, but they can also be manipulated and used for evil as well.
In the right hands, a credit card can be used to do good. In the wrong hands (which isn’t the same as “bad” hands), credit cards can be harmful.
Just because a tool has the potential to do harm does not make it bad.
Credit cards aren’t right for everyone
Before I talk about the benefits of credit cards, I want to be perfectly clear that credit cards aren’t for everyone.
Recovering alcoholics shouldn’t walk into bars. Recovering pornography addicts shouldn’t have internet access at their fingertips.
If credit cards are dangerous for you and have caused you financial trouble in the past, avoid them like the plague!
If you don’t have the funds available to pay off your credit card in full each month, don’t use it at all.
Avoiding credit cards isn’t a sign of weakness, it’s a sign of strength. It takes determination and will power to stand up to your weaknesses. Doing everything in your power to avoid temptations shows strength of character, not weakness.
Smart Reasons to Use Credit Cards
I want to share with you the reasons that my husband and I use credit cards, but I don’t want you to confuse them with the reasons you should or should not use credit cards.
Call me lazy, but it’s a lot easier to swipe a card than pay with cash. While this is precisely the reason that many get into trouble with credit cards, we use the convenience within the limits we set for ourselves in our budget (and have the track record to prove it).
When I’m in the checkout at the grocery store with anywhere from one to four small children, it’s much easier to swipe my credit card than to dig through my wallet for cash or write out a check.
When I have a van full of kids or am in a hurry, it’s much easier to pay with a card at the pump than go inside. At some fuel stations in our area, there’s an extra charge to use a debit card at the pump, so credit it is!
Using a credit card makes it really easy to know where your money went. Having a monthly statement that shows when and where you spent money helps you keep your records straight.
Of course, to know the details of a transaction, you’ll need a receipt, but having a credit card statement is really useful if saving receipts isn’t one of your strengths
If I lose my cash envelope for the month’s groceries, it’s gone. However, if my credit card is lost or stolen I can get a replacement and have any fraudulent charges removed. In fact credit card companies are getting really good at catching fraud even before you do. If an out of the ordinary charge shows up, my credit card company calls me to verify if it was really me or not.
Additionally, if I purchase something online, and the item delivered is not what I ordered, I can dispute the charge with my credit card company.
Credit card defenders often tout the rewards available from their cards. We love our credit card rewards. Different cards have different rewards programs, but we generally prefer cash back to gift cards or airline miles or merchandise, so we use a card that easily allows us to apply our rewards to the credit card statement each month.
Even though we aren’t big spenders, we still get something like $40 cash back each month just from using credit cards for most of our purchases. For my business credit card, I got almost $500 of travel expenses reimbursed thanks to the sign up bonus.
Credit cards offer a wide range of additional perks. One of our cards, from American Express, doubles the manufacturer’s warranty on purchases. We used that card when we purchased a new camera a few years ago.
Other cards allow access to VIP areas in hotels, provide automatic lost baggage insurance, include roadside assistance, give a discount on currency exchange, offer complimentary subscriptions to free shipping programs, and more. By choosing a card with perks that matter to you, you can enjoy some real benefits at no cost (as long as you pay off your full statement balance every month!)
Credit cards aren’t the problem
Credit cards aren’t the right tool for everyone. They can (obviously) be dangerous for some people.
I don’t think the credit card is the root of the problem though. The issues of poorly handling money run deeper than the tools used to mismanage money.
When used wisely and responsibly, credit cards can be useful tools.
Curious How we use credit cards with our zero-based budget? You can read about how we use credit cards in our budget here.
What do you think?
- What’s your take on credit cards? Are they evil?
- Which side of the credit card fence are you on?
Want to Lower Your Grocery Budget?
I'm sharing my secrets to rocking a low grocery budget!
Learn how to reduce your grocery budget in a way that works best for you!
When you subscribe to Six Figures Under you'll get frugal inspiration and financial motivation in your inbox, starting with the Grocery Budget Crash Course!
What are you waiting for? Start saving money today!