Credit Cards Are Just A Tool

I wrote two articles recently that looked at two different arguments about credits:

Credit Cards Suck!

Credit Cards Don’t Suck, You Suck!

You can imagine I received a vast array of opinions on the matter between both articles!  Credit cards cause heated debates with lots of people either loving them or hating them.

Let me tell you what I really think:  Credit cards are just a tool!

That’s it! They are a tool just like money is tool.  They are neither good nor bad.  See, it’s all in how you use them.

For many, credit cards are a useful tool that allows them instant loans for purchases; online payments; rewards points; builds up credit history; extends warranties; tracks spending; and more!  Odds are these people are responsible spenders who pay off most, if not all, of their balances every month.  Credit cards help them get what they need and add a few perks as well.

For others, credit cards are the bane of their finances! For these folks credit cards have high rates; exorbitant late fees; unclear terms; ruins their credit scores; creates a temptation to spend, and worse.  Many of these consumers spend way too much and don’t keep a good enough track of their finances and budget.  For them credit cards are horrible.

The point here is that credit cards, in of themselves, are the same for both types of users. The cards don’t really change.  How one uses them changes!

In my credit card history I’ve both loved and hated them.  At first they were this exciting piece of plastic that represented my financial freedom.  Then that freedom led to chains of debt and resentment.  Now that I’m out of credit card debt I understand that it was me all along who controlled what my credit card experience would be.

So if you hate or love credit cards, or your emotions run somewhere in between, understand that you are the master of your destiny.  You control your spending decisions so it’s up to you to decide whether credit cards are a useful tool or a useless tool!

How do you feel about credit cards?

Creative Commons License photo credit: Fosforix

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Published or updated April 13, 2013.


  1. I’ve recently discussed this very same topic. I agree with you on most of your points. My only difference is that I think that a knife, when used to stab someone in the chest, transcends its “tool” label and is turned into a weapon. Technically, all weapons are tools but this doesn’t immediately justify the use of all types of weapons.

    Baker @ ManVsDebt’s last blog post..[Video] What’s The Actual Point Of Budgeting?

    • @ Baker – I could stab someone with a credit card too. It still depends on how the user implements.

  2. Hannah says:

    I have no problems with my credit card…but I have never carried over a balance on it. You don’t have to worry about your credit card’s interest rates and fees when you pay off your balance every month! I mainly use my card when it is convenient to do so (reserving hotel rooms, making online purchases, etc.) and have an emergency fund set up for unexpected expenses. It takes a lot of discipline but the feeling of not being tied down by credit card debt is definitely worth it.

    Hannah’s last blog post..Illy Espresso Cups and Cappuccino Cups

    • @ Hannah – Used well, credit cards can be extremely useful! And yes, there’s discipline needed, but that should always be there. the problem these days is too many people don’t have the discipline.

  3. Christy Z says:

    Agree totally, Hannah. I have never paid a penny on my credit cards and get a wild sense of pleasure every month when I use my free Starbucks $ that I get for using the card.

    Something for free from a credit card company – I am the HUGE minority. 🙂

    • @ Christy – I’ve been considering getting the Starbucks card! Free coffee for using your card is a nice perk (used responsibly).

  4. christiansingles says:

    I agree that it’s the USE of credit cards that is key but at the same time, I think there’s something psychological to using a credit card that makes you spend more. It doesn’t FEEL like spending because you figure you’ll pay it off in the future. I don’t even have to mention the interest charges. We have one credit card for emergencies but stay away from them.

    • @ CS – It can have that psychological effect similar to using chips at a casino. But a person needs to understand what that card represents in the first place. Problem is many are too short-sighted to realize the effects of the charges. Still not the card’s fault.

  5. Bonnie says:

    Credit cards are like any other item related to our financial well-being. You learn what you see or what you are taught to understand.

    The problem, as I see it, is really understanding credit before you start using it. Let’s say you are a parent who uses a credit card, either for the rewards or convenience, but pays off the bill every month. The child sees you use the card. The child intellectually understands that the bill has to be paid. But does the child understand credit limits, interest rates, finance charges, minimum payments and your actual philosophy on how credit should be used?

    I have a friend who is a CPA. She gave her teenager a credit card in the summer before senior year. They agreed that the card would be paid exclusively out the paycheck of the teenager. Three months later she took it away until the balance could be paid down to a reasonable amount.

    Credit cards are like tools. Some tools can be learned just by watching like a hammer and a hammer is one of the first tools you learn how to use. Other tools need training like those used in shop class for which you must be older and go through training and safety lectures.

    People do not learn by osmosis. I am not sure that sink-or-swim is the best teaching method for financial literacy. I think coaching and monitoring are the best way to teach people financial literacy. Will this “save” everyone the heartache of becoming seriously over-extended? No. There is a reason there are so many warnings affixed to your lawn mower.

    • @ Bonnie – Great comment! We certainly learn spending habits from those around us including our parents. But watching isn’t enough. We need to learn ourselves how to use credit then pass the info along to our friends and family. I think a lot of kids probably think credit cards are magic money machines. Parents need to realize their kids perception and help teach them. As for warnings, have you ever looked at a credit card’s terms of use? I think there are more rules than with a lawn mower. But it’s up to us to understand them.

  6. Thank you, putting it out there like that makes it easier for people to hopefully understand. It is a tool. But I think it can be both good and bad depending on how responsible the person is. Can be compared to guns. Just a tool, can also be good or bad. All tools can be good or bad, just depends on who’s behind it.

    Craig’s last blog post..How $500 in Savings Adds Up To Better Mental Health

  7. I completely agree. I get tired of hearing people complain over and over how credit cards are evil and force you to spend more. But a credit card can’t decide to go on a shopping spree without your permission. You, the cardholder, decide when and where to swipe it.

    I also wrote a post a couple of months ago along the same lines after reading another blog article saying that credit card companies are evil. If you don’t mind my sharing, it’s called: Who’s to blame for your spending: You or You?

    P.S. Love the new look, especially the sidebar headings. 🙂

    Penelope @ Pecuniarities’s last blog post..Homemade Noodles: a Surprisingly Delicious and Versatile Frugal Food

  8. Jose @ debt free says:

    Yes, credit cards do suck but it is only when the consumer uses it indiscreetly. Having a credit card does not mean that you have your own money in your hand. People should understand that the money swiped through hasd to be repaid back alongwith the interest. First time users just use it for the heck of spending and continue using it more and more until they reach a point where repayment becomes difficult or impossible. A lot of discretion and understanding is required to use the plastic money.

  9. James Jeffery says:

    I have 3 credit cards, all in debt. They have destroyed me, but hey! I’m a student.

    James Jeffery’s last blog post..Is Giving My Credit Card,debit Card And Bank Account Information To Paypal And Ebay Safe?

  10. Annie @ Credit Repair says:

    Credit cards are not bad. It is you as the user of it who should be responsible in using it. But if you live from paycheck to paycheck like a lot of people do, then having trouble in paying your bills on time just simply because you spend your money on things that you don’t need. Then it is not the credit card’s fault anymore. You have to learn to manage your finances.
    .-= Annie @ Credit Repair´s last blog ..Are You Really Ready To Ask Someone To Co-sign For You =-.

  11. Kenneth M. says:

    Personally, I think credit card is good for people who are on top of their finances. As long as you pay your balance in full at the end of each month and do not pay any fees associated with the card, then the pros of having a credit card far outweighs the cons. Ultimately, it is our responsibility to be aware of our spending habits and to live within our means. Credit cards are good starting point to establish your credit. If you use them wisely, then you are on your way to be financially responsible. If you abuse your credit cards and live beyond your means, then you find yourself heading into a financial catastrophe that is very difficult to recover.

What Do You Think?