Are Credit Cards A Necessary Evil?

Having an additional payment option in your wallet comes with advantages. Say you’re strapped for cash but your preteen needs a new bike, you can simply charge it to your card. It provides a cushion in case you face a short-term budget crunch.

Credit cards have been given a bad name due to their easy misuse. It is the very reason why credit cards are responsible for the large amount of debt the average American carries. Despite the backlash, credit cards may have some significant advantages.


The bad rap on credit cards goes way back.  From costing money just to have access to money in the form of annual fees, to getting you into high-interest debt; we are wired to only think negatively about carrying “plastic” in our wallets.  Now, there are card options that do not have annual fees, and even offer zero percent that can actually help you pay down and manage your debt faster. How else can credit cards bring confidence to your financial world?

1. Building Credit

Opening a credit line is one important step in building your credit score. A score of 740 or higher is considered very good in the eyes of creditors.1 Your creditworthiness may eventually qualify you for better interest rates on car loans, mortgages, and other financial tools.  Be careful though, don’t rack up debt just to build your credit. Paying your balances in full each month and living within your means will be key in building strong credit scores and maintaining them.

2. Security

Credit cards can offer protection from theft or fraud. “If your debit card is stolen your account can be locked, which can cause auto drafts and bills to be bounced and fees to be added to your personal or business bank account”, advises Christine Smith, Financial Representative, Wealth Advisory Group, LLC. Your credit score may take a beating in the process if bills, loans, etc are not being paid on time. The fraudulent transactions and having the money restored could take a significant time while the bank investigates.

When a credit card is stolen, money is not being taken from your bank, and is only limited to how much your credit limit is. When you notify your credit card company of fraudulent charges they will likely start an investigation immediately. If the amounts are low, they may remove them off your card right away. If the amounts are higher, they could put a temporary freeze on the card and open a bigger investigation. You can also set up alerts for transactions on your card so in the event of something fraudulent happening both you and your credit card company are notified. Some credit card networks provide zero liability coverage for unauthorized usage. Several credit card companies are now also offering consumer protection by helping resolve refund issues when consumers are unable to resolve merchant disputes on their own.

3. Cashback

It has never been easier to earn money from your credit cards. The concept of cash back has grown into a financial opportunity over the years. Many credit cards come with some points or rewards along with bonus points for certain areas of regular spending like gas, online shopping or restaurants. With every purchase, you accumulate points that may be redeemed against gift cards, merchandise items or in some cases cash back.

Finding a card that aligns with your spending patterns does the trick. Shop for a card that will encourage your continued patronage by the retailers you enjoy by offering you lucrative discounts and rewards. Be sure to also check annual fees that some cards have. This is not necessarily a bad thing since some cards may offer higher returns when you have an annual fee.


1. Pay the balance off monthly as not to gain credit card debt.
2. Do not spend more than you can afford. If you must make a big-ticket purchase on your card, calculate the installments, and make sure you can pay back it back comfortably every month. Also, try to leverage 0% offers.
3. Start using a credit card for normal expenses like, gas, groceries, etc. Be sure to still budget here, and you can pay off your card weekly, bi-weekly, or monthly.
4. For added organization, use one card for fixed expenses and another for non-fixed expenses. This allows for stricter budgeting and for you to find directly where the inefficiencies are in your spending.

Finding the right card with the greatest number of advantages for you and your lifestyle is worth taking the time to do the research.  Consider how a credit card can be part of your strategy to meet your financial plan objectives, consider speaking with a financial representative as your overall financial plan changes with time.

“Building financial confidence offers people the ability to leverage all potential opportunities available to them. Credit cards are just another piece of that opportunity pie that when used correctly can offer an added benefit,” says Christine Smith.


Brought to you by The Guardian Network © 2020. The Guardian Life Insurance Company of America®, New York, NY

2020-103600 Exp. 06/2020




Christine Smith is a Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Wealth Advisory Group is not an affiliate or subsidiary of Guardian.

Wealth Advisory Group is not registered in any state or with the U.S. Securities and Exchange Commission as a Registered Investment Advisor. This material contains the current opinions of Christine Smith but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice. 

Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.


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