There are many personal financial experts who advise you to never use a credit card.  They insist you need to cut them up, throw them out, freeze them in a block of ice, or burn them in effigy.  They think you’re too immature and undisciplined to be trusted with plastic credit.  I disagree. I think you should use credit cards to save money.

I understand that carrying a balance on your credit card is almost never a good idea, and many people do lack the discipline to use them effectively.  But that doesn’t mean that savvy consumers can’t take advantage of credit card perks while carefully avoiding the pitfalls that so many others fall prey to.

One way you can squeeze some extra benefit out of credit cards is by using department store credit cards.  You know the ones I’m talking about.  You’ve heard the cashier a million times offering you a way to “save 10% on today’s purchases by opening a charge card.”  If you’re like me you just politely decline because you really don’t NEED another credit card.  Or do you?

I know it flies in the face of most personal finance advice, but there are times when opening a store charge card can be a smart move.  For example, if you shop at a store all the time and they offer card holders a discount or rewards then you might as well take advantage of that.  My wife does a lot of shopping at Kohls so she opened up a store charge card.  At various points during the year they have a Kohls Cash promotion where you earn $10 in Kohls Cash for every $50 you spend.  You can then return and use the Kohls Cash during your next shopping trip, and if you combine it with special card-holder coupons for up to 30% off you can score some sweet deals.

Of course you have to examine your own circumstances before deciding if a store charge card is right for you.  If you already have outstanding balances on your current credit cards then the last thing you need is more debt, especially since many retail store credit cards come with a hefty interest rate.  Obviously it doesn’t make much sense to use a credit card to save 5% on your purchases and then pay 29% in finance charges.  Financial moves like that will have you in the poor house in no time.  On the other hand, if you have no credit card debt and you have the discipline to keep it that way then there’s no reason not to take advantage of store card rewards programs.

An alternative to store issued credit cards which can only be used in one place is the co-branded credit card which can be used anywhere.  An example of this is the Costco American Express card which can be used anywhere American Express is accepted.  The difference is that there are special bonus programs and perks that are designed with Costco users specifically in mind.  Credit cards like these can help you earn rewards or cash back even faster because you can use them for all of your purchases.  But before signing up you should read the agreement and make sure you can in fact use them anywhere you want.