Credits cards have long become an integral part of our day to day life, but at the same time earned a reputation of something rather evil. Easy and convenient consumer credit has led to uncontrollable spending well beyond what consumers could afford. This, in turn, has put many consumers in an unattractive position of being burdened beyond their ability and essentially enslaved by credit card companies.

The view of credit cards as something purely harmful has become popular, and the advice to cut them up and use only cash is quite common. As always, we tend to jump from one extreme to another. Credit cards, like many tools, are morally neutral. If used properly, they can actually help you save money while adding an obvious element of convenience. I use credit cards every day. Even to pay for a 60 cent can of pop at a convenience store I use my credit card. But I have never paid an interest charge on a credit card in my life. The secret is simple – pay the balance in full at the end of each month.

Most credit cards have a grace period, which means you can actually borrow money with no interest for up to a month. But make sure to pay before this period is up. Otherwise it will get ugly. In addition to free short term credit and convenience of daily purchasers, many credit cards have added perks, some even without any costs attached. For example, the MasterCard offered by President’s Choice pays a 1% cash back on all purchases. Others offer air miles or similar promotion points.

Another useful characteristic of credit cards is protection. You can easily block a fraudulent transaction or refuse to pay for a defective product after the fact. As you can see, there are many benefits which make the use of credit cars a worthwhile exercise. The key is not to use them for what they were designed for – consumer credit. They charge exorbitant interest which should be avoided at all cost. There are much better tools for it, such as regular and secured lines of credit, for example HELOC. Be smart about it and take advantage of what others may view as danger.

Nikolay Sisan is a Certified Financial Planner and freelance writer in Vancouver.