Why I Still In Love With Credit Cards

A conversation from five years ago:

“Today,” said a college freshmen friend, “I’m going to cut up all my credit cards, and never use any of them again.”

“Huh? Why?” I asked.

“Because I can’t stop using them! It’s getting me into a big pile of debt!”

“Oh please. That’s just silly,” I said as I dismissed her opinion, “it can’t be that bad.”

Two years and $10,000+ of my own debt later, I thought to myself: Hmm, maybe Deanna was onto something after all.

Most people know this fact: credit cards, when used irresponsibly, can land your booty in a pit of messy debt. Without credit cards, I probably would have been less in debt, perhaps in the ranges of a few thousand instead of ten thousand — but let’s face the fact, I would have been in debt regardless. It was 99% me and 1% credit card; the credit card didn’t magically swipe itself.

But despite everything, I still love credit cards. I rarely carry cash and I swipe my card on almost everything. Yes, even when purchasing $0.49 chewing gum. In fact, I buy pajamas with pockets just so I can have the credit cards with me while I sleep!

You might ask: what are you, a moron?

Although the answer is a convincing yes, that isn’t the reason why I still love credit cards.

I’ve been paying my purchases in full since I dragged my behind out of debt, and it has been years since I had a finance charge on my credit cards due to purchases.

I’ve racked up enough reward points on my American Express card to keep my subscription to the WSJ going for the next six years; I’ve also gotten enough cash back via my Citi Dividend Card to pay for months of broadband service, and I’ve earned hundreds in interest through various 0% balance transfer offers.

All these rewards and benefits of credit cards came about at the simple and “easy” price of responsible credit card usage. Pretty sweet, in my opinion.

On the Other Hand…

The average undergrad student has about $2,200 in credit card debt, and about one in twenty American households owes $8,000 (or more) on their credit cards. Statistically speaking, if you’re a college student — you probably have (or had) credit card debt.

Credit cards aren’t exactly a consumer friendly financial product. From high interest rates , two-cycle balance calculation method, to fees upon fees — it can be very easy for people to fall into the credit card trap. It’s little wonder why many people advocate avoiding credit cards.

You Don’t Have to Love Them Too

Just because some online nut job loves his credit cards enough to blog about them — doesn’t mean you have to get on the bandwagon too.

There are plenty of people that have stopped using credit cards due to the potential financial trouble credit cards may cause them — and that is perfectly okay. If you have serious doubts about your ability to use a credit card wisely and decided to forgo using them regularly — chances are, you’ll be fine.

Credit cards are not the only way to build credit (although they may be one of the simpler way). Even so, you do not need to actively use your credit card to build credit. You especially don’t need to carry a balance to build credit.

And let’s face it — earning points, rewards, or cash back is entirely pointless if you’re paying hundreds or thousands in finance charges.



However You Want to Swing It

If you manage your budget wisely and spend responsibly but are put off from using a credit due to the numerous horror stories, you may be doing yourself a disservice. Of course, if you use credit cards daily without understanding the cost associated with them, you may be putting yourself in financial risk.

At the end, regardless of how you feel about credit cards, having a full understanding of their pros and cons can benefit you immensely. After all, it’s entirely silly to love or hate something without really knowing it.

Love them, hate them, or don’t really care? You can vote on the top right of the blog.