I love/hate credit cards

I have been a cardholder for more than a decade and, like many others, I have a love/hate relationship with plastic. A credit card is like a friend with extreme personalities: when it’s good, it’s really good, but when it’s bad, take cover. Here are reasons why I love credit cards:

It’s a free loan for almost two months. From the beginning of a credit card’s cycle to the time payment is due, you get to borrow money for no interest, i.e. if you pay in full.

You can stretch your cash flow for big purchases. We recently bought a new laptop on installment for 18 months at real 0% interest (with a free printer and a memory upgrade to boot). We’ve purchased appliances in the past the same way.

Paying is a lot more convenient. I used my credit card at restaurants, grocery stores, gas stations, and wherever it’s accepted. It sure beats lining up at the ATM and bringing a wad of cash.

It’s easy to track expenses. I get an instant record of purchases, which is way better than sorting through receipts and ATM slips and gazing at my navel wondering where the money went.

Those are pretty good reasons why I don’t cut up my credit cards. But not everything about them is rosy. Here’s why I hate them:

They can bleed you dry. There was one point when I found myself with a huge credit card balance I couldn’t pay in full, taking me a number of months to fully pay off. The 36% finance charge, the hefty late payment fees, and the sneaky way they compute charges are certainly a source of stress and misery. Here’s a trick: do a low-rate or, better yet, 0% balance transfer to another credit card company

They can treat you like crap. Their customer service is a contradiction in terms. They make you wait on hold for several minutes when you call them. They sometimes don’t give a straight answer. They make you go through hoops. Once, this local company, without informing me, blocked my card after paying for an online transaction, and I found myself being told at a counter with a cart-load of groceries that my card (I carry only one) was declined. That same company refused to accommodate my request to temporarily extend my credit limit during another transaction despite my being a loyal client who always paid in full.

They don’t protect you. A few years ago, my wife’s credit card was stolen and the thieves assumed her identity for a half day of buying wines, groceries, cell phone load credits, and gift certificates, just a few hours before she found out and had the card blocked. We tracked the establishments and found the forged signature on the receipts obviously different from my wife’s. We requested the credit card company, a huge multinational one at that, to reverse the transactions and the charges. All we got were cold responses. After several months of “investigation,” the company refused and made us pay for everything, citing the reason that we were liable for charges made before we reported the stolen card.

Yet, despite my horror stories, I still keep a couple of cards. But we’ve learned our lesson. We cancelled the cards issued by those terrible companies and vowed never to transact with them again. We keep our credit limit just enough for regular monthly transactions (to put a cap on our expenses and limit any loss in case of identity theft). We carry just one card and leave another at home just for emergencies. We are never late, always pay in full, keep a lid on expenses, rack up points, pay on 0% installment when necessary, request for reversal of our annual fees, and make sure the credit card company don’t make money off us, just the merchants. And we like it that way.