Why credit cards aren’t bad (Part I)

On a regular basis, we’re bombarded with this notion that credit cards are all things evil. Case in point: Paying with plastic can make you fat (seriously?!!). I am very tired of hearing this notion and I don’t think credit cards are bad. I’m tired of being chastised because I own and opt to use my credit cards instead of paying with cash while still being frugal.

I’ll concede to the notion that credit cards were created to take advantage of people, but as they say, fool me once, shame on you; fool me twice, shame on me. A credit card is nothing more than a tool, and if I decide to repeatedly use it wrongfully, it still doesn’t make it a bad tool; it makes me a bad user.

Here’s a rundown of the cards I own and why. This is not an advertisement, but I want to show you the method to my madness with real examples.

1. Chase Freedom – First card I opened (because the previous 2, CC1 and CC2 were opened/maxed by my mother). I got this card while still paying off the BOA card, but needed the flexibility to pay for things without adding to BOA. Though their bonus changes every quarter, the most notable ones are 5% cash-back for gas, grocery stores, restaurants and pharmacies. 1% on everything else. I’ve gotten $700 back since last year from promotions and charging what I was already going to buy, and have not paid 1c of interest.
2. BOA Better Rewards – Since my old BOA card is indeed my oldest, closing it would’ve done much damage to my credit score (8 years of history zapped!). Instead, I upgraded it and get to keep my credit history. I do hate BOA a lot, but this isn’t about favorites. It’s payback time, to the tune of $120/yr for doing what I am already doing: charging things to my card, getting a base 1% cash-back on it, and paying them in full before they accrue interest. Cost to me: $0.
3. Amex Blue Cash – My newest card, which mostly came to be because I did not have an Amex card and they run a lot of good promotions throughout the year and offer pretty decent cash back. I do get a one-time $150 sign up bonus, but within a month of getting it, I’ve already taken advantage of one of their offers and turned up an extra $70 in my pocket.

Those are my 3 active cards, and all of the proceeds have gone towards my savings goals or my debt. I look at it as small, unexpected extra income. I am by no means encouraging anyone to go out and get credit cards, but I’m jumping on their defense that when used properly, they can be a good tool… an unforgiving, inflexible and uncaring good tool. They won’t yield when you lose your job and miss a payment, or lend you a listening, understanding ear when you charged up $2k and can’t pay it off due to emergency situations. They will still force you to pay interest and penalties for years if all you can do is pay minimums.

I support the no-temptation method where people do not get credit cards because they’d rather do without the temptation. But I also support smart spending. And getting $30/quarter for charging my phone bill to a credit card without paying any interest (because I paid it right off from my bank account) seems like smart spending to me.

What's your general take on credit cards? Love them? Hate them? Or are you indifferent? Am I the only one who seems to be chastised because I use my card instead of cash?