Credit cards are often viewed as evil, as though they have lives of their own, and inherent personalities. However, credit cards are not sentient, and they are not evil. Like many tools — financial and otherwise — it’s all about how you use them. There are certainly pitfalls associated with credit cards, and it’s true that issuers and others in the credit card industry make it easy for you to rack up the debt, but with the right plan you can get the benefits of credit card use, without paying interest and other fees.

Advantages of Using Credit Cards

Credit cards come with a number of perks. The main perk is the convenience: You don’t have to carry bulky cash around. Plus, you can use credit cards in different countries around the world, reducing the need for finding money changers. Credit cards also come with fraud protection, extended warranty coverage and even rental car insurance. All built in. When you use a credit card, you build your credit faster and fraudulent charges can be disputed without the money going missing from your checking account. And I haven’t even mentioned the rewards programs — especially the cash back.

Cash Back Rewards

Cash back rewards programs can be quite helpful. Free cash is always good. However, in order for the cash back rewards to be worth it, you have to follow some rules. Otherwise, high interest charges and other fees can erase the value of your reward.

  • Buy only what you would purchase anyway.
  • Stick to a budget.
  • Pay off the balance each month.
  • Track your spending to avoid going over your limit, triggering additional fees.

When you have a plan, you can spend as usual, and you will get free cash for buying what you would anyway. Groceries, gas and other purchases can all go on the cash back card, resulting in you getting more bang for your buck.

What to Avoid

While it can be tempting to take advantage of other rewards programs, be careful. Many miles programs don’t return the same value as cash back. Purchasing from “preferred” partners might result in more points, but you may be paying a price premium. On top of that, you need to read the fine print to find out whether or not there is a redemption fee when you use your rewards. Instead, look for a program that is straight cash back. Keep it simple, and keep it cash to get the most value for your money.


Miranda is a Freelance writer focusing on banking and personal finance.