Using Credit Cards Responsibly: The Double Edge Sword Explained

using credit cards responsibly Depending on your credit habits, you either have a love or a hate relationship when it comes to credit cards. If you love them, it’s likely because you’ve found a card that offers you a top notch rewards program or a low interest rate. With the right credit card you can travel for free or earn hundreds of dollars each month.

On the other hand, credit cards can cause serious financial turmoil. A 2017 study found that 48% of Americans have more money in credit card debt than they have in savings. Over charging and high interest rates have led to more than a trillion dollars in revolving debt.

No matter where you stand when it comes to credit cards, it helps to understand the double edged sword that credit cards are.

The Advantages of Credit Cards

When used properly, credit cards offer many benefits that consumers won’t find anywhere else. The key is continuously following good credit habits so that you don’t fall into the many traps that these cards have.

Credit cards offer the awesome advantage of being able to buy now but pay later. In the event of unforeseen financial needs like car repair or house problems, you can charge the costs on a credit card and pay them at a later date. This prevents having to drain your checking account.

Another perk of using a credit card are the rewards programs. Credit card companies offer a wide range of rewards including:

  • Cash back
  • Discounted purchases
  • Travel offers

By finding a credit card that offers a beneficial rewards program, you can get rewarded by making everyday purchases. Do you like to travel? Find a credit card with robust travel rewards such as VIP access to airport lounges, discounted hotel stays, and the ability to earn airline miles. Starting a new business? Choose a credit card that offers discounts or cash back on business-related purchases such as IT equipment.

Credit cards are also beneficial in that they offer purchasing power. With a credit card you have the ability to purchase products and services online, by phone, and in stores. Credit cards are an acceptable form of payment around the world.

Even if you have bad credit, some of the best credit cards for bad credit can be used to turn your credit health around. Other notable benefits of using a credit card include the ability to build credit, fraud protection, emergency protection, balance transfers and cash advances.

The Drawbacks of Credit Cards

On the other hand, there are also many negatives to owning a credit card. One of the biggest drawbacks is interest. Charging a card with a high interest rate can lead to compounding debt and high monthly payments. Not paying off balances quickly can put you into a financial bind. As a credit card holder, it's important to pay off purchases in full to avoid high APR charges and potential late fees.

Fees are another drawback with credit cards. Unlike debit cards, credit card users face a wide range of fees. One of the most common is the late fee, which is charged when you don't make the minimum payment by the payment due date. If you're a repeat late payer, you could end up being charged hundreds of dollars in late fees.

Other common fees include:

  • Annual fee
  • Balance transfer fee
  • Cash advance fee
  • Foreign transaction fee
  • Over-the-limit fee

Depending on your credit habits, paying these fees can have a huge impact on your financial standing.

Last but not least, the improper use of credit cards can completely destroy your credit rating and leave you in a serious financial bind. The ease of spending that's available through a credit card is convenient, but it’s much easier to lose track of how much you're charging. This can lead to debt that feels insurmountable.

The Bottom Line

How you view credit cards greatly depends on your credit habits. If you’re one who charges smartly, pays your balance due each month, and sets spending limits, you’re unlikely to face the pitfalls of owning a credit card.

For those who have a negative view of credit cards, it’s best to work towards improving your credit and financial habits. Minimize the amount of money you spend. Make payments on time and pay in full as much as possible.

The better spending habits and decisions that you make, the more favorable opinion you’re likely to have of credit cards.


When it comes to finances, debt, and credit, credit cards are a true double edge sword. If used properly, credit cards can prove creditworthiness and can be used in times of a financial bind. However, if used carelessly, credit cards can create a lot of debt and ruin years of positive credit and financial growth.

Leave a comment and share your experience with credit cards, and any useful advice you may have about using credit in the section below.

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