An increasing number of people are now trying to make do without credit cards.  Since credit cards seem to be responsible for a lot of the mess consumers are in now, they’re probably evil, right?

Wrong.

While you can use credit cards for incurring debt, it’s hardly the prescribed way to use it.  Debt is like a grave you dug for yourself.  Even when you have no intentions of jumping in, it’s so easy to slip and end up at the bottom.

Credit cards, if you employ them responsibly, are a terrific convenience, allowing you to carry out transactions without having to carry a stash of bills, earn bonus gifts and plenty of other perks.  As long as you live within your means, credit cards aren’t a bane - they’re a tool that makes life easier.

Once you get your mind around to the idea that credit cards are a good way of incurring debt, for whatever purpose, that’s when things take a drastic turn.  Debt, especially when taken out for expenses that won’t net you anything (the way a business credit will do), becomes a mere burden.  You’re essentially exchanging your future income for today’s convenience - not the most intelligent thing to spend your financial ability on.

As long as you can avoid using credit cards for debt, you should be able to make your way through life - even with a dozen credit cards in tow - relatively free from financial shackles.  If you chose your accounts wisely, you might even be enjoying a few perks along the way.

Most credit cards from major issuers are automatically tied to a rewards program.  Rewards, after all, encourage more frequent use of the card, apart from giving the cardholder a little something back in exchange for using it.  Considering that credit cards represent a huge profit source from many banks and lenders, do rewards really benefit you more?  Or are they just another ploy to entice you, without any long-term benefits?

Should you really go for a rewards credit card or just apply for a card with a local bank?

1. Spending More

In order to earn more rewards, you’ll need to spend more.  If you’re buying stuff on credit and not settling your balance month to month, any amount you gain in rewards will likely be eroded by the premium you’re paying for the debt.  That’s a recipe for disaster.

2. Regular Consumer Spending Doesn’t Maximize Rewards

With the stingy points and earnings from rewards cards, it’s impossible to derive any considerable benefit if you only use it for regular consumer expenses.  Groceries and utilities will only represent a small amount of points earnings every month. Unless you can use it for business expenses (e.g. online advertising, travel), any points you earn before the expiry date will be paltry at best.

3. Higher Fees

Because rewards credit cards supposedly offer you more, they usually come with higher fees, interest rates and approval requirements.  If you’re not earning too many cash back or points based on moderate use, those extra costs are essentially paid for no added value whatsoever.

Worth The Hassle?

While rewards credit cards may look attractive on the surface, they’re not the best card for everyone.  Unless you use your card to spend a considerable lot (that’s way beyond your typical monthly expenses), the benefits you’ll derive from them are hardly all that enticing.

Do you own a Northwest WorldPerks Visa card?  With Northwest Airlines now owned by Delta Air, there are a couple of changes on the way that you might find important.

Anytime this month, the U.S. Bank-issued WorldPerks card will be converted to an unaffiliated travel rewards card (called the  U.S. Bank FlexPerks Travel Rewards Visa), with American Express taking over Northwest’s rewards program.  Since it’s no longer connected with the airline, you’ll no longer be earning miles from using the card.

Delta and Northwest are combining its frequent flier program under the SkyMiles moniker, with Amex issuing the official card for the combined airline.  Both Amex and U.S. Bank appear to be fighting over the same consumer base of WorldPerks credit card holders, trying to get them to switch with their own respective offerings.

Trying to decide what to do?  Here are a few facts to help you along.

Fees. The new FlexPerks Travel Rewards card will come with annual fees between $49 and 55, while the Amex-issued Delta-branded alternative should features fees anywhere between $55 to $450 (wide range, I know, but that’s the fees Amex currently charges on Delta-branded cards now).

Rewards. Worldperks Visa card owners who make the switch to Amex will get a good amount of bonus miles as an incentive.  Depending on the card you go for, you can get a variety of other perks including free flights for a companion and VIP lounge access.

Do note that Northwest (Delta) is currently suing U.S. Bank for offering the card to its customers.  The company claims U.S. Bank is contractually obligated to maintain the WorldPerks credit card without marketing to its consumers until the contract expires in August of this year.

Who, ultimately, carries the responsibility for company credit cards, you or the business?  Some folks will tell you it’s the company while others will say the burden’s on your end.  The truth, in fact, depends on the contract behind the credit card issued under your name.

When accepting the offer of a company credit card, always clarify the terms of its contract with your employer.  In some cases, you are merely an authorized card user, with the company held responsible for the actual payments.  In others, it is essentially your credit card that’s merely affiliated with the organization employing you (a good way to get a credit card if you have bad ratings).

Using Personal Credit Cards

For the most part, you can use your personal credit card for business-related expenses, pay off the balance on time then reimburse them later.  While this isn’t that big of an issue, it can be if you work in a large organization where approval for reimbursements can take several signatures.  Simply put, your employer is basically ending up using your money and all you’re getting are extra points (which, depending on what rewards program you’re on, may not even be all that good).

If this becomes a problem for you, we highly recommend getting a company credit card where your employers handle the payments.  This should save you the headache of having to fund the payments upfront (to avoid interests) as well as avoid potential problems in the future (like getting laid off with business charges still on your account).

When you travel frequently, hotel use will be one of your regular expenses.  As such, you want to find a rewards card that will try to get you a bit more benefits for your stay.

1. Find a card that features hotels suited for your travel needs

Figure out where you normally travel and what hotels will be the ones you’ll most likely stay at.  Based on that, find a credit card with rewards programs especially for those establishments.  If you’ll most likely be staying at the Hilton, there’s no point in getting a card with Starwood rewards specials.

2. Make sure it offers rewards in a currency that you like

Many credit cards allow you to accrue your points in a number of different ways, including rebates, miles, redeemable points or a combination of sorts.  If you prefer one over the other, choose your credit card accordingly.

When using your rewards cards on hotels, the following things should ensure you get the most for them:

1. Earn loyalty rewards

Even if your card offers rewards benefits for different hotels, it still makes sense to stay loyal with one.  Many of the large hotel chains offer loyalty programs, the gains you can derive from which can add up to more than what you earn across different establishments.

2. Be aware of blackout policies

Always check the blackout policies of the hotels you plan to cash in your rewards on.  As of the moment, most hotels implement some form of blackout policy (even thought they claim otherwise) that will bar you from getting a room with your points for one reason or another.  The Hilton and Starwood both have the most flexible policies in this area.

Looking for more ways to reduce your environmental footprint?  How about getting the new earth-friendly Biodegradable Discover More Card.

Unlike regular plastic materials used for cards, the biodegradable credit card is designed to have 99% of its components  break down in regular landfill conditions. It also leaves no toxins that can seep into the soil and water supply.  Put simply, the Biodegradable Discover More Card will leave next-to-nothing in the way of waste once its useful time is over.

A cash back credit card, the Biodegradable Discover More Card offers some pretty good rebates.  Purchases under select categories can get you a 5% money back, with non-specified categories netting you a flat 1%.  Unfortunately, we can’t get a list of the preferred categories at this time, but we expect them to be similar to most of Discovery’s offerings.

There are no limits to the rebates this card allows, so you can use it to earn as much cash back as you want.  Certain online partners even give higher rebates (up to 20%), so make sure to look into that if you are considering getting this account.  The card has no annual fee, six months 0% introductory APR for purchases and twelve months introductory APR for balance transfers.

Should you get the Biodegradable Discover More Card?  If you’re interested in getting a regular Discover More Card, the features of this one are pretty similar, with the added attraction of doing less damage to the environment.  Do note that the “environmental” bit is more a marketing move than any actual green efforts, though - don’t go around calling yourself “green” just because you got one, lest you piss off the wrong people.

Can’t handle your mounting credit card debt?  Instead of defaulting on your payments and getting the brunt of harassment from collectors, you may want to consider finding a way to settle the debt amicably.  There are a number of options available that you can work out either with your credit card company or through a third-party counselor.

When you decide to come to a debt settlement agreement, you have to realize this has several implications, including:

1. Lost credit line. Any time you go into a debt settlement program, the credit card issuer will close your credit account permanently.  While that’s not so bad (since you can’t use it neck deep in debt, anyway), it will have implications on your credit rating.

2. Credit scores. We do know that closing a credit line will lower your score a bit, but it’s possible that a closure due to debt settlement might hurt your credit report even more.  It’s better than both a bankruptcy and a defaulted account, though, so it’s the lesser of available evils.

3. Tax implications. If you were able to negotiate paying for a lower balance than what you actually owe, the amount you saved may need to be reported as income to the IRS.  According to some tax experts, any savings beyond $600 will need to be reported as income.   If you are insolvent at the time of the settlement, though, then the money need not be declared as income, though you’ll have to be ready with accompanying documentation to prove it.

Credit card companies, in all honesty, haven’t been in their best behavior lately.  They’re raising interest rates with nary a word and cutting credit lines with the smallest transgressions.  If you’re fed up and just want to get over your existing debt, debt consolidation may be an option you want to consider.

There are several options you can check out when looking to consolidate your credit card balances.  Here are some of them:

1. 0% APR Balance Transfer Cards

We’ve talked in great depth about these before.  If you can qualify for a balance transfer credit card with good terms, it’s usually a good idea to consolidate your balances with them to avoid today’s high interest rates.  Look for cards that can give you the 0% APR for at least 12 to 18 months or longer.

2. Social Lending

Social lending organizations are increasingly becoming a popular option for debt consolidation, due to their fixed terms and lower interest rates.  If you have the opportunity to work with one, make sure to give them a try.

3. Personal Loans From Smaller Financial Institutions

Many regional banks and credit unions are still very open to working with consumers looking to ease their debt problems.  If you can show that you are a trustworthy individual who can handle the regular payments, you might be able to get a personal loan that allows you pay off your numerous credit, thus consolidating your payments with just one institution.

Airline miles are some of the most popular uses of credit card rewards.  In fact, I know a few people who use their points exclusively for getting airline tickets, since it often allows for the best value.

Rewards points, of course, can be used for other travel items, including car rentals.  All credit card rewards programs I know offer some of car rental usage for your points.  Make sure you review them before embarking on your trip.  A number of the offerings can save you a bundle.

Amex, for instance, has partnerships with three major rental companies, namely Avis, Hertz and Enterprise Rent A Car.  Some of their cards even include auto-enrollment into premium memberships with those rental providers, making the experience of booking a ride an even more positive experience.

Chase, on the other hand, allows you to exchange your points for gift cards to either Avis or Hertz.  If you have at least 15,000 points, you can also book your rentals directly using you card, using the points to pay for it.

If you own a cash back card from Discover, you can exchange rebate earnings into gift cards for Alamo, Enterprise Rent A Car and National.  To make the option more enticing, they’ll even double the value of your rebates, if you choose to redeem it from car rental companies.  If you have a card from Capital One, redeeming in the form of car rental gift cards (Avis) is usually not the best idea, as they don’t offer very good value for your points (they cost double of the same value in other programs).

If you are a student or an alumni of the University of Florida, you should qualify for a University of Florida Visa credit card.  The card itself is issued by Chase and comes with their Flexible Rewards Program.  There’s not much special about this card, although it may appeal to present students due to the better chances of getting approved for one (and the generally lower APR).

This card offers one of the better interest rates for student credit cards, at either prime rate plus 5.99% or 9.99%.  It comes with no annual fee and an introductory 0% APR for the first six months, applicable to both balance transfers and regular purchases.

Rewards points earned in the Flexible Rewards Program do not expire for up to 5 years, although there is a cap of 60,000 points you can accumulate for every calendar year.  There are number of ways to redeem your rewards under the program, including:

Travel Items. To live up to the “flexible” name, the rewards can be redeemed for travel items in a variety of ways, including round trip domestic tickets and conversion into miles with three set airlines (Continental Airlines, United Airlines and British Airways).

Gift Cards. Make sure to wait until you get to 5,000 points, though, as the lower point exchanges for gift card are just plain bad deals.

Gift Items. Chase has a decent selection of items available.

Cash Rewards. The conversion rate of points to cash rebates is pretty bad, so avoid it if you can.  A more interesting exchange might be to use points as a payment for other loans you have with the bank (you’ll need to consult with Chase for exact terms).