Credit cards have a horrible rep, and in most cases, rightfully so. Most people who are in financial trouble can blame their mess on misusing their credit cards. Having said that, credit cards are not at fault. It is you. My wife and I have one airline credit card account with American Airlines that allows us to collect miles. We have never carried a single penny in debt, always pay our bills in full each month, and have never paid a dime in fines or penalty.
Now CNBC reporter and a highly educated woman, Maria Bartiromo, tells Ellen DeGeneres, “I have a debit card, but I don’t like credit cards. I’m thinking actually of getting an American Express card just because you have to pay it off in its entirety, and I’m a big believer of that. But if you’re gonna load up on debt on your credit card, I am just so not of that mindset. If I don’t have it in my checking account, I don’t spend it.”
I am not sure that financially responsible people like us need to give up credit cards altogether (they also help you build your credit history and make possible conveniences like car rental, insurance coverage while traveling overseas, and many other protections like getting a refund for defective items purchased if the retailer refuses to refund the money).
So my advice is that if you are responsible managing your money, go ahead and have one credit card (I am not a big fan of American Express because they are not accepted everywhere and you almost always need another one; so choose either a Visa or MasterCard) and then use it merely as a convenience and not as a source of free money. If not, then like Maria, stick to a debit card.