People ask me all the time, "Aren't there positive uses of a credit card like rebates and airline miles?" The truth is that responsible use of a credit card does not exist, and credit card debt is a major problem in America.

There is NO positive side to credit card use. You will spend more if you use credit cards. Even by paying the bills on time, you are not beating the system! But most families don't pay on time. The average family today carries $8,000 in credit card debt according to the American Bankers' Association.

Rebates

Now let's talk about the rebates. If you were using a credit card at 5 percent, you would have to spend $160,000 to get $4,000 rebates on new cars that lost $6,000 of value when you drove them off the lot. That is not a good deal! The credit card companies and new car dealerships want you to believe the lie.

The Power of Cash

When you pay cash, you can "feel" the money leaving you. This is not true with credit cards. Flipping a credit card up on a counter registers nothing emotionally. If you use credit cards instead of cash you will spend 12 to 18 percent more. This is money you could have saved or used to pay off debt.

If you "have to" use plastic, I suggest a debit card. I use them for travel and the occasional convenience of ordering something over the Internet or phone. Other than that, I use cash.