Credit cards are evil. Credit card companies are predatory, aggressive entities who seek only to make money. Poor consumers are victimized by high interest rates and ridiculous penalties. Credit card companies are worse than baby kitten stompers, and we all know how evil THEY are.
Except, of course, they are no worse than any other type of corporation-for-profit. They do use aggressive, sneaky tactics to hide charges and interest rates from consumers – but they do disclose them when you get a card. They make cute commercials (Credit One, I’m looking at you) but then again, so do the soda companies – and they are selling a product that rots your teeth and makes you fat. They charge high interest rates, but would you be willing to lend a total stranger tons of money at 0% interest? If so, head over to Lending Club – I’m sure you will be the most beloved lender in their history.
I get tired, from time to time, of the demonization of credit card debt. I understand some people weren’t as lucky as I was, to be raised in a home in which debt was frowned upon. Lord Polonius’ words from Hamlet were uttered more than once in my family as I grew up: “Neither a borrower nor a lender be.” Those words made an impression on me, and other than one impulsive purchase of a car using a loan from GMAC, I have never entered into any non-mortgage debt. But let’s face it – credit card debt is a debt, just like a mortgage or a loan to start a business or a student loan. It’s just how the individual chooses to use it that causes a problem.
Our family has a credit card – and we use it for everything we can possibly use it for. Buying something for $2 at the store? I’ll use the card if they take Amex. Phone, cell, satellite – all paid on the card. I’d pay my mortgage with my Amex card if possible. Why? Because I made $640 with it last year. Blue Cash® from American Express pays some nice cash back bonuses. Other cash back cards – Discover® Motiva Card, etc. – pay similar bonuses. I used Amex’s Membership Rewards for years, and it paid for – among other things – a roundtrip business class pair of tickets to Europe for our honeymoon, hotels here and there through the years, even some gift certificates. Over the last year I have received a flat screen TV and a baby stroller – by redeeming credit card rewards points.
Every type of tool can be used for good or ill. I can use a shovel to prepare a garden for planting, or I can assault someone with it. Credit card companies offer a product that many people have trouble using. Yet at the same time, if you use the product they offer – easy and unsecured credit with “bonus” or “reward” programs – you can make a lot of money without incurring any risk at all.