I expect that this may be a bit of a controversial post in the finance community, but I thought to chime in on one side of the story.
You may consider this a “devil’s advocate” post what with all the personal financial advice out there telling us to cut up all our credit cards, shred them and scatter their tiny little vestiges across various trash bins. Or toss them in the fireplace and see them burn. Or see how amazing life is without being shackled by the obnoxious plastic. But today, I’m paying homage to my credit card. This poor, distrusted invention is something I have appreciated for a while.
You could be wondering….
Credit Card, Why Do I Love Thee?
Well let me count the reasons.
- I only keep one credit card.
That is key. Because I don’t carry a zillion credit, debit, shopping, grocery or store type cards, I am free to love only one. My beloved Mastercard is it. I don’t share its use with anything else therefore, it remains exclusive and special. - I look at it as cash and pay it in full each month.
So I don’t whip out my card everytime something gets my attention. I use it sparingly, carefully and responsibly and when I’m short on cash. Because of that, absence makes the heart grow fonder and I don’t tire of it. Most importantly, I never finance anything and I only use my card as a replacement for cash — therefore I pay my bills in full every month. Thus, it doesn’t get me into trouble! - I am able to limit the cash I carry.
I don’t really like carrying too much money around, nor do I feel comfortable carrying a checkbook. It just makes me feel less vulnerable to carry around a card instead of cash. With less cash on my person, I’m less likely to misplace it or wonder where it went. This is good for someone like me, since I find it harder to account for the cash I use. - It’s just plain convenient to have.
It also follows that my credit card bails me out of awkward situations when I find that I’m not carrying enough cash, which is practically all the time. I don’t have to keep visiting the ATM to get bills. I don’t know what it is, but I don’t get too excited about dropping by ATMs or banks all that much. - The credit card company is my friend and ally.
My card company provides me great customer service. I pay my bills in full each month but once in a while, I screw up, forget, and end up paying past the grace period. But the credit card company is very forgiving and waives my fees each time; perhaps because I hardly do this. They also keep tight watch over possible fraudulent activity and are quite proactive on suspicious charges, which have happened on occasion. - My credit card is accurate.
It’s so freeing not to feel concerned about lost change or miscalculating payments made through cash. I’m one of those absent-minded people who can’t recall if I handed over a $10 bill or a $100 bill. In fact, my father once handed a cashier two(!) $100 bills by mistake and got change for what was supposed to be a $20. He only realized it a bit later and when he demanded for his money back, the cashier scoffed at him and refused to do an accounting. This wouldn’t happen with plastic! - My credit card reports and statements are cool.
I receive timely, detailed and helpful reports from which I can figure out and analyze my expenses. Granted I can get these from my bank but somehow, I prefer my credit card statements over my bank statements when referencing our expenses; they’re just easier to follow. - My card is essential for certain services.
I like using my card online and for dealing with vendors whom I don’t see face to face so that if I have a problem with them, I can easily dispute it. This has worked for me countless of times. - And most of all, it loves me back.
My card gives back every time I use it and my spending is justly rewarded. Now this is where many people fall into the debt trap as they think that by spending they’ll get some money back anyway. One needs to see the fallacy of this reasoning in order to genuinely appreciate credit cards, their function, use and rewards. In my case, I control my spending, and whenever I do fork out the plastic, I’m ecstatic that I get rewarded for it.
What else can I say but my single, carefully used, paid-in-full each month credit card totally rocks and I can’t bear to live without it. Of course, I still believe each card should come tagged with a warning: “Please charge responsibly.” So as far as the love goes…your mileage may vary.
Other views and resources:
I Do Not Use Credit Cards
The Only Credit Card Guide You’ll Ever Need
Copyright © 2007 The Digerati Life. All Rights Reserved.
{ 32 comments… read them below or add one }
While I can’t say I LOVE my credit cards, I use them to charge almost everything, even for only several dollars. And my reasons are very simple: 1) get 2% cashback; 2) get free money from 0% BT. It’s beyond my imagination why so many people either never used a credit card or tell people never use a credit card. And for all the excuses of not using a credit card, I can only say that for a responsible person, credit card is a friend, not a liability.
What do you say to those who proclaim you spend 18% more with a credit card than you do with cash?
Credit Cards can be a best friend to someone if used responsibly. If not it can be a financial disaster.
MissionDebtFreedom,
Yes it is clear that the beauty of the card is in the eye of the beholder. I believe that using a card as Sun mentioned, is a good thing only if it can be used under strict control and paid in full every month such that it is only used for convenience, which is how I do it. If it weren’t for these restraints, I would NEVER use a credit card and simply use cash. What I found was that given these restrictions, my card has saved me money and added more to my bank account.
How? I’ve made money through their rewards system (which I’ll discuss at a later point in time), through helping me dispute purchases to rogue vendors whom I would have had to sue to get my money back if I had paid them by check or cash, and through tracking and accountability via the card statements.
Again, I NEVER finance anything. I use a card like I do cash and think of it not as a free pass to spend but simply as a replacement for the cash I don’t carry. Just pay it all when the bill comes. If I cannot afford to pay something in full, I just don’t use the card and I don’t buy the item.
But you do have a very good point, MissionDebtFreedom, that people TEND to spend more with plastic than with cash because psychologically, they treat the card as if it were “free money”. So really, it needs to be used responsibly to be truly appreciated.
Great post, one more reason I love my credit card is that if a vendor doesn’t come through with what they promised, you can initiate a chargeback. This is particularly true for American Express where the burden of proof is on the vendor. When you pay in full every month, credit cards are definitely your friend.
yes, it’s much to do about psychology. Look at how we look at cash back from credit cards. cash back gives you the sense that if you buy more you “get” or “earn” more money. I’m sure the credit card companies examined what catch phrases are enablers for consumers to purchase more. that’s why it’s so tempting to overspend on credit cards because you are “getting” or “earning” money.
Conversely, if you think of it as buying an item that you need to purchase for 1-6% less by using the card versus cash/check, you are focusing on what you are buying, rather than on the money you are going to “get” or “earn” for buying the items.
the math is the same, but the way you think about it gives you much more control.
Nice and simple post… I wouldn’t say that I love my CC as cte CC debt is killing me… the debt is the primary reason i started my blog… anyways some day i might start living it…
I appreciate all the comments here whether For or Against the cards. It’s a discussion that I find interesting as everyone comes from different backgrounds and perspectives. It’s interesting to see how experience colors opinion. I have never in my life had a problem with a credit card (and I’m over the hill for many of you ;)) and have only pleasant and positive experiences to share on this. I am in the “black” with my credit card so I’d like to share what it has done for me. I know that it has caused heartache for many but hopefully what I have stated here will show some ways of using it that will yield more positive results for you. But again, if it just gets you into trouble, stay away from it! This cannot be stressed enough.
I, too, love my credit card. I have used my card for several years and always pay it off each month. And recently I used the reward points I earned to purchase a FREE 15 inch flat screen LCD TV for the bedroom. It has retail price of $350. All because I used my card instead of cash… Nice!!
Yes, yes, yes,
yes, yes,
yes, yes, yes,
and yes!
This is a very nice article! I don’t get it when people blame credit cards for all their trouble! Yes, we charged beyond our means to credit cards and got into a lot of debt too. And yes, it was painful digging our way out. But if we had just blamed the credit card and cut them up, we would go out and make the same mistakes again, some other form, some other place! Instead, we learnt all we could about managing credit cards, and now have them working for us. And so far, its been great going. So just for the record, yes, we love our credit cards too.
The problem is in us. Credit cards are just one of the tools we use. To blame our debt on credit cards is like to blame our reckless driving on cars. Great post!
I agree wholeheartedly!
I always pay my balances in full every month. In order to maximize my rewards, I use 3 credit cards (each one to its rewards strengths).
To find the card (or combination of cards) that will pay you the most rewards for your spending profile, you can use this rewards calculator:
Credit Card Tune-Up: Discover the Best Credit Card Reward Deals
I’ve been pondering on this one for a while.
I love to use my cashback credit card whenever I can, but does using a credit card have a significantly greater impact?
All those extra receipts, etc.?
And what goes on behind the scenes in retailers and banks?
Do cash transactions and card transactions generate similar amounts of waste?
Really good post. All reasons are carefully and right counted. Great! As for me I use credit cards (they are 3) for convinience and enjoy doing that.
I use my credit cards everywhere for convinience to pay and save credit cards for money emergency. My credit company and its representatives are really like friends. They always help and answer all the questions with pleasure. And I appreciate that too much. It is one of the important reasons in customers support.
I absolutely agree with you. Great post. As for me, I cannot live without credit cards. I carry cash very seldom, because I do not need it when my credit cards are with me, and they are always with me for convenience.
I have had many bad experiences (card infomation was stolen) in the past, so I can deffinitely say that I don’t love my credit card
I don’t see how people can HATE their credit cards!
Today you simply can’t get around them, and if you handle them with care and use them responsibly credit cards can have many benefits.
The most important things is to get enough information before applying for a credit card so that you find the perfect deal for you!
I’m all about our credit cards. My wife uses an Amex for business and we fly first class to Europe every few years on the miles we earn. Our main personal card is an Amazon Visa and we get hundreds of dollars of free stuff every year. Of course we pay it all off every month too so we have never paid any finance fees.
That was fun to read the post! I can agree with all the points, but I can also agree with an article about why I don’t love my cards)) Though there are some credit card alternatives, as said in the publication I give a link to, I will never change credit cards on anything else, because they give status which is very important for me and my business.
Good article with very practical information. I also use my debit card a lot and everything comes out of my checking account so I don’t have to worry about. Of course for big ticket items I use my credit card and try to pay it off within three months.
All the reason that you have mentioned can help people to take advantage of using their credit cards. There are people who don’t know how to use this or that positive feature.
In these modern times it’s hard to get by without a credit card. There are so many instances where a credit card can be a useful and convenient way to pay for things not withstanding online transactions. Thanks to the introduction of debit visa cards and the like, credit card haters have an alternative option.
Good for you! Nice cases. Go on!!! You have the right way!
In fact, credit cards can be both your friends and your enemies. If you use your card wisely, it will bring bonuses and rewards to you. If not, it will cause different troubles.
Most of the stuff your read these days say exactly the opposite about credit cards! Great way to look at things 😉
We’d love to get your opinion. We recently started a poll on the The Worst / Best Credit Card Issuers of 2008. Feel free to stop by and give us your feedback.
Haha yes you absolutely right. If you find a card you love (like your Mastercard) that gives you everything you need there’s no use for another card. My favorite usually tends to change every year or two because the credit card company changes the rewards or something so I then switch. I guess you could call it a divorce since we love our cards lol.
Great article dude
Credit cards if used properly and carefully can be very useful. These days it is almost unheard of for people not to have one, as they provide a convenient way of purchasing and saves the hassle and worry of carrying large amounts of cash.
Watch Maxed out, a documentary a few years old. Yes credit cards do have many pros, but they are evil. They make their money by exploiting the poor and uneducated and use unscrupulous methods to collect from their “victims”. While I have always been responsible with a credit card, I’ve decided not to ever carry one again. A debit card does everything a credit card does without the risk of running up debt and without supporting the exploitation of the poor.
I don’t believe that credit cards are evil — it’s much like saying knives or guns are evil. I agree with Yan that these are tools that we use to improve some aspect of our lives, but obviously come with caveats: they can be misused if they fall in the wrong hands. But who would you blame for that? If you can’t trust yourself enough with a card then don’t use one.
Jason, you are right in implying, however, that credit card companies do what it takes to entice people to take out a card even if some customers don’t fit the profile of a responsible card user. It’s the same thing with subprime mortgage lenders trying to get anyone with a pulse to buy a house during the peak of the housing market. All I can say to consumers here is — be aware and always think twice when your money is involved. Think before you spend or before you sign on the dotted line!