Let’s Talk About Credit Cards: Pros and Cons of Credit Cards

Credit cards are a powerful tool and also can be the cause of financial ruin. There are pros and cons to having and using credit cards. 

Let’s talk about credit cards! Let’s talk about credit cards’ pros and cons and how I feel about credit cards. I’m sure you have all been waiting with bated breath to hear all my thoughts and opinions. If you haven’t, well, too bad. I’m doing it anyway!

Pros and Cons of Credit Cards

Credit cards are a very tricky topic because they are such a dangerous tool. They are dangerous, but they are also a tool. There are pros and cons to credit cards.

My thoughts on credit cards have evolved slightly, especially recently, and I will explain why.

Credit cards are basically a quick loan. You can borrow money from a creditor at a very high-interest rate for anything you want. Anything you need to buy, you can borrow the money for. You don’t need to justify to anyone your purchase or even prove that you can eventually pay it back.

Credit cards are so quick and easy- it’s extremely easy to forget that you are even spending money. Many people spend too much on credit cards- buying things that they don’t need with money they don’t have. This spending can, and does, quickly spiral into people owing huge amounts of money with little or no assets to show for it.

At least when you borrow a million dollars for a house, then you have the house at the end of it! With credit cards, you can spend tons of money on nothing and have nothing to show for it except for mountains of debt.

Terrible, right?

Well…. sort of. Borrowing money on a credit card is a pretty bad idea. Borrowing money on a credit card to buy stupid stuff is stupid. That doesn’t mean that you can’t ever use a credit card. Using a credit card to buy things you need and can afford? That may be a good idea.

Credit cards are a great tool to help you take control of your finances and to help keep your finances simple (simple is the name of the game over here)

Here are some great perks of credit cards:

Its awfully simplistic to say that credit cards are good or credit cards are bad. They are a tool and like many tools can either be used properly or not. Here are some of the pros and cons of credit cards to consider when opening and… Click To Tweet

6 Pros of Credit Cards (Credit Cards PROS and Cons)

  1. Easy to Track. It is really easy to track your spending. It’s all there on your account so you can clearly see where and when you spent money. This is great for knowing how you spend your money but also in a large household it is great for knowing WHO spent the money.
  2. Automation. You can set your bills to auto-pay to never be late on your bills and don’t have your services switched off. Most of us don’t have time to be busy with bills and our busy lives mean we can sometimes forget to pay bills on time. Having all these things automated means you don’t forget and you don’t pay late.
  3. Returns. It is really easy to make returns with a credit card. Often you don’t even need a receipt because you can just look up the item on the card. This is great if you are like me and often lose small pieces of paper or have a purse that is well, slightly, cluttered.
  4. Safety. If you lose a wad of cash, then you lost it. It can never be replaced. If you lose a credit card, you can just cancel it and get another one.
  5. Fraud Protection. If you do have fraudulent activity on your card, then you can easily dispute it and get the money back. If you are scammed with cash, then you probably won’t be getting that money back. Even debit cards offer much less protection than credit cards.
  6. PERKS!!! Many credit cards offer either cashback or airline points or other perks that can make life really nice. DansDeals and many other websites make a whole living from credit card hacking and maximizing cashback. Here are some of the best cashback credit cards you can apply for!

Pros and Cons of Credit Cards

Finally, and one of the main reasons I recently switched to credit cards: hygiene. Cash is passed from hand to hand and hard to clean. A credit card is usually not handed to anyone else and is relatively easy to clean and sanitize.

My Credit Card Use

I use a mix of credit cards and cash to manage my daily life. I pay bills on my credit card (I get 1.5% cashback on my Capital One card), and I use it for online shopping. I take my discretionary money out each paycheck in cash. I love doing my grocery and fun shopping in cash. That way I don’t need to do mental gymnastics at the store. I either have the money or I don’t.

When I run out of cash then I don’t spend more money. That’s it—no more spending. I don’t need to track my purchases or remember how much I spent. The cash does the math for me. This has always made so much sense for me and I always encouraged people to do the same. There is a lot to be said for doing discretionary spending in cash.

There is a reason why credit cards are much-maligned- it’s easy to spend more dollar on a card but you can’t do that with cash. I don’t like having to think about math when I’m doing my shopping. So cash it is.

But…. then COVID hit.

I stopped going to stores. The stores I did go to wanted only a credit card. Honestly, I didn’t really want to get change back from them either. I started ordering a lot more stuff online. I started doing a lot more delivery. It became impractical to use cash. So I switched to a credit card.

I don’t love using a credit card for the same reasons as before:

3 Cons of Credit Cards (Credit Cards Pros and CONS)

  1. Hard to Budget. It’s hard to keep track of how much you have left to spend and how much you already spent. There is a lot more calculating involved.
  2. Easy to overspend. It’s easy to justify buying more things because you can purchase it even if you don’t have the ready cash. What’s one more purchase when you already spent so much? When you have the option to buy it then you are more tempted.
  3. Disconnect. You lose the action of spending money- the physical act of spending is separate from you so you don’t necessarily connect the transaction with spending actual money. It is hard to visualize the money leaving your bank account when it is so removed from the act.

I still am using credit cards right now, though. I think that in these times it makes more sense for me to use a credit card. Basically, the pros of using a credit card outweigh the cons for me at this moment.

 You Need a Credit Card

Which brings me to my point: you need to have access to a credit card. You need to be able to use a credit card responsibly. You need to teach your kids how to use a credit card responsibly. Suppose I had eschewed all credit cards, then I would not have had the option to switch to a credit card. I had a credit card ready to use.

That doesn’t mean that I won’t go back to cash at one point. Cash works for me.

I would still recommend for anyone who is trying to get their financial life in order to use cash. There is a HUGE advantage to using cash for discretionary spending when getting used to your budget. I did it for years and I probably would do it again.

If you have trouble controlling your spending, then you should definitely be using cash.

That being said, you should also be using a credit card regularly for certain things and you should try to work on having a good credit score. (Don’t go overboard and do risky things JUST to improve your credit score. Spending responsibly on a credit card and paying your bills on time will improve your credit score slowly over time- no need to borrow extra just for a good credit score).

More and more stores are going cashless. More and more shipping is being done online. There is no reason for you to be left out in the cold. It’s silly to say that there is no place for credit cards in a financial plan.  There are ways to pick and choose the correct credit card for you. You should, however, try to work on being extremely responsible with a credit card.

A Dime Saved Rules for Responsible Credit Card Use:

  1. Set a budget and stick to it. A credit card isn’t an excuse to go over budget.
  2. Pay your bill often and in full. Don’t wait until the due date. Pay your bill a few times a month and make sure to pay all of it-not just the minimum payment. Know the difference between your statement balance vs. your current balance.
  3. No Games. Don’t get sucked too deep into playing credit card games. Credit card hacking can be addicting and lucrative. KNOW YOURSELF. If there is the slightest chance that you can’t keep up, then don’t even attempt it.

Credit cards are very powerful. We are extremely lucky that we can buy food and medications even if we don’t currently have the money for it. If you are unemployed, then you can use a credit card to still survive. This is a huge blessing that has not always been available to everyone or currently available to everyone. Most of us are lucky that we will not die of starvation just because we miss a paycheck, thanks to the credit card. This is not something to take for granted. There are pros and cons of credit cards.

That being said, only use credit cards responsibly!





Hi! I am a millennial mom with a passion for personal finance. I have always been “into” personal finance but got inspired to start my blog after a period of extended unemployment. That experience really changed the way I viewed my relationship with money and the importance of accessible personal finance education.

4 thoughts on “Let’s Talk About Credit Cards: Pros and Cons of Credit Cards”

  1. Like you said, tracking and automation have got to be one of the biggest perks to using a credit card. Don’t get me wrong, rewards are great, but for example, my parents are cash folks and they spend hours each month trying to manually go through the bills, write checks for various elements, and balance the checkbook precisely. They’ve got a stack of paper receipts and all too often I’ve heard them argue about knowledge gaps when the tracking isn’t quite right.


    I think there’s a small, underlying “con” that’s easily missed, though. You’re giving away a large amount of your spending data when using credit cards. I suppose that’s sort of obvious, but it’s used to retarget advertising to you in different ways.

    We’d all like to think we’re oblivious to marketing, but Google, Facebook, etc are the massive companies they are because of being able to leverage that underlying data.

  2. This is a great post! I’ve shied away from posting my thoughts on credit cards. This COVID business makes me glad I was already an avid debit card user. It is more work tracking, but cash just isn’t my jam. One day when our kids are older (if I become not so frugal) I may travel hack so we can take them to cooler places.

  3. I love using credit cards today because of rewards and the ease of tracking purchases. But, I’ve had debt in the past and paid too much in outrageous interest. You really have to work with the payment method that makes budgeting easiest for you.

    My mother-in-law pays EVERYTHING with a check, no debit card. She finds it safer than carrying cash and avoids overspending with a credit card. I can’t imagine writing a check at the grocery store but it works for her.

  4. You make sure really good points in this post. I love using my credit cards for safety reasons, for rewards/airline miles, and for other perks. But I NEVER pay interest, and I watch my balance carefully. They are an awesome tool, as you say, when you can use them responsibly.


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