A reader writes:
Not having a credit card doesn't mean you "actually live like a fiscal conservative". I buy everything I can with my credit card, using it several times a day, every day. I pay off my balance every month, in full. I am fully living within my means and buying only what I can afford. Are you more fiscally conservative than me? Of course not. People have been living beyond their means for as long as there has been credit. It didn't start with credit cards.
Well, think of my lack of a card as a function of my lesser faith in my own self-control. Another writes:
A fiscal conservative doesn't spend more because the plastic in his wallet is a credit card rather than a debit card. That is controlled by his internal budgetary thinking.
Which leaves the important difference between these two cards: The debit card gives the merchant a direct hook into your bank account. Perhaps for even more than you think you are being charged. On any dispute, you are fighting to get your money back. With the credit card, on any dispute, you are in the much better position of explaining why you aren't going to pay. I have credit cards that I pay off in full each month, including an Amex card. Debit cards may sound good, but they come with less legal protection than credit cards.
If you are fiscally conservative, credit cards can A) get you things – points, cash rewards, etc. B) give you much better consumer protection (many Amex cards double warranties and cover accidental damage) C) as you've discovered, give you great credit. I don't know how many credit cards I actually even have at this point, but I only use one of them really (the one with the best benefits), use it for everything I possibly can and pay it off IN FULL every month. No downside, all of the upside. And every year there are new deals on cards (recently there was a Chase card that gave you 50k Southwest points for signing up). Use it, get the reward, don't use it anymore unless you find that is the best reward for you. Your credit score will go through the roof as your credit to debt ratio becomes crazy good.
Work the system my friend, work the system.