There is definitely a love/hate relationship for many people on the use of credit cards; however, it is not the cards that are intrinsically bad, it is the poor management of credit cards that leads to credit woes down the road. Whenever you use a credit card, you should always spend exactly what you are able to pay within 30 days. If you cannot repay your credit card bill within 30 days, then you need to rethink your purchase.
You also need to remember that just because your credit limit is a certain number, it does not mean that you should spend the amount of your credit limit all the time. A key factor in responsible credit card usage is minding your credit utilization. This number reflects the amount that you have charged on your card versus your credit limit, and your utilization rate should ideally remain between 30% and 50%. If you have a credit limit of $1,000, then this means that your outstanding balances on the card at any given time should remain between $300 and $500.
If you follow these rules and responsibly use your card, then you should think about using a credit card that offers you cash back rewards. Each credit card company is different in how they reward points and how much cash back you are eligible to receive; however, if you are going to spend the money anyway, shouldn't you get some of this back from your card provider?
For most people, after their mortgage or rent payment, their food costs are the next highest monthly line items in their budget. There are cash back rewards cards that specifically cater to grocery spending and they will give you a higher percentage back when your dollars are spent in a grocery store. If you are going to buy food anyway, shouldn't you get rewarded for it?
Another large monthly expense for households is gas for their cars. There are cash back rewards cards that give an extra percentage back when you spend your money on gas. If you cannot avoid making your regular commutes and you need to drive as much as you do, shouldn't you get rewarded for it?
Even just a basic cash back rewards card will typically reimburse you around 1% of every dollar that you spend using the card. If you spend $1,000 a month, this translates to $10 that you will get back from your credit card company. This may not sound like a lot to you, but I bet if you found $10 on the street, you would be happy to pick it up. If you are going to spend the $1,000 anyway, shouldn't you get rewarded for it?