And, with credit and debit cards, people tend to spend more like you said—why do you think vending machines take plastic now? Mcdonalds?—-plastic enables impulse. And if you spend more generically how much in ‘rewards’ are you really getting back? You and a handful of others are losers to the industry so expect more fees and discouragements to game the system like you’re attempting to do.

Yeah, credit cards aren’t evil, but predatory practices by these amoral companies?—I don’t know, how about “not very nice”.

and the comment about “cash just disappearing”—that’s not a credit vs. cash problem, that’s a “I have no budget and just spend whatever” problem. You said: “but if you truly stick to the budget it is not possible for you to spend more than you would otherwise”…well, sure, but how many people actually do a budget and follow it? not in theory–in practice. The answer is “very few”—so in this environment, why is it hard to see that credit cards are just inviting risk/debt into your life? You might be the exception, but please consider the audience who’s reading this—they very likely don’t have your discipline or control—and that’s EXACTLY what the card companies are counting on.

It’s like I wouldn’t invite my alcoholic friend out to the bar with me! ;]. I don’t use credit cards as I do see a cost—a ‘hassle factor’ if you will. If you are a math nut and actually do/follow a budget, I’d just say “good luck”—times they are a’changin!—but if you don’t have a budget/follow it religiously, then you’re just asking for trouble. The house does always win.

You have a great title for the blog which I agree with Credit Cards are not evil. Credit cards are just a tool. What is the true cost to use of them?

Folks get up in arms when gas goes up 25 cents a gallon but nothing is said when banks add another fee, shorten the grace period or charge the merchant a 1/4 % more.

Assumption –
Charge all expenses and pay bill off during grace period. Never make a mistake in paying bills
Charge card is a 2% rebate card.
75,000 Expenses charged to credit card
x 0.02
1,500 rebate

Merchant – my average merchant fee 3.29%, I hope to make 12% rate of return
75,000 credit card sales
x 0.0329
2,467.50 merchant fees to visa/mc

2,467.50
x 1.12
2,763.60 fees with cost of capital added

967.50 Bank makes for a loan of less than 30 days
296.10 merchant makes 12% internal rate of return

(1,263.60)credit card users loose in purchase power.

Credit cards make my life more simple because I pay much fewer bills thanks to auto-pay. And I am NOT in favor of juggling credit card offers. I’m assuming you mean juggling 0% balance transfer offers. That is far too risky to me and is just asking for trouble. Paying with a credit card and paying it off at the end of the month is different from that, of course.

At the moment, I am using a secured credit card to help rebuild my credit score/history for future goals. Having been in trouble with unsecured credit cards in the past, I am learning a lot more now about self-restraint and more importantly, cash management.

While I am only using my secured credit card for emergency purposes, I am also learning how to use it and pay off the charges within 2 weeks of any purchase to lower the finance charges, if any.

This is helping me learn how to manage my cash flow in coordination with paying my expenses. In a way, it sounds like what I am doing is one step closer to what youa re doing with AmEx.