Due Credit

Use a credit card responsibly and essentially you'll get paid to shop.

Some financial bloggers tell people to shun credit cards because you might incur debt. That's absolutely true. If you misuse a credit card it can hurt you financially. At the same time I love credit cards and use them for every purchase I can. Everyone should use credit cards, providing they can be responsible with them.

Advantages

• Rewards. Cards with a reward system will pay to use the card. 2% cash back might not be a lot but it's still free money.
• Purchase protection. Most major credit cards have some form of purchase guarantee and will help you resolve issues with a purchase. A merchant might not take much of notice of an individual, but they sure will listen to a behemoth financial company.
• Smooth cash flow issues since you don't have to pay immediately. It's nice to pay off the balance at your convenience (as long as it's in the grace period).
• Stops fraud on your bank account. Fraudent charge on your card? Just call your card issuer and get a new card. It's a bit inconvenient, but nothing compared to debit card fraud where the money is taken immediately from your bank account and you might be without cash for an extended time until your bank resolves the problem.

Disadvances

• Debt. Friction free purchasing without the need to pay immediately has been shown to cause people to spend more money. This can lead to serious debt problems.
• High interest rates if you don't pay off the balance. You should always pay your balance, so this shouldn't be an issue, if you're responsible.
• Rewards and cashback mean the price of goods is higher to compensate for the fees credit card issues charge merchants to pay for the rewards, so it's not really free money. That being said, since cards are ubiquitous, you can't really avoid this effect so at least the rewards make it all a bit less painful.

What Credit Cards Should I Get?

It's a good idea to have a few credit cards just in case one of them becomes unusable and it can help improve your credit score a little by showing you are responsible with multiple cards.

I recommend sticking with a simple, gimmick free cash back card such as the Fidelity Rewards Visa or the Citi Double Cash. Both give you unlimited 2% cash back on all purchases. No rotating spending categories, opaque point systems and spending cut offs to deal with. Simple really.

For more a few more credit card ideas, out my credit card reviews.

Wrap up