Just a few months into having my own credit card, I’m now reassessing the benefits of owning one. There are many arguments that try to justify the existence of the credit card.

Some people think that credit cards can be used a sort of insurance policy for those moments when shit happens. In extreme situations, they might. But one better has the means of earning the money to pay it back or else he or she might just be looking at another financial crises thanks to swelling interest.

Emergencies are what emergency funds are for – cash that’s kept safe to be used in case of emergencies. As the more stern financial adviser would say: Anyone who doesn’t have an emergency fund is just plain stupid.

Some would also say that buying on credit gives you the financial flexibility of spending your cash elsewhere. But is that really an advantage?

Take of example this case. Say I’d be buying a laptop that costs Php 45,000 and I have the amount. (Oh how I wish.) I can opt to pay cash, and ask for a discount. Technically, retailers save as much as 10% since they need not deal with the interchange fee for card transactions. So even a barat 3% discount means Php 1,350 saved.

Or I can opt to charge it at 12-months zero interest. I only pay Php 3,750 in the first month leaving me with Php 41,250 cash to use for other purposes. However, even with a one-year time deposit account, my Php 41,250 (which I really wouldn’t have for a whole year due to the monthly payments) will not yield Php 1,350 on interest. Money not saved is money lost.

And there’s the rewards argument. Oh sure, I “earn” points every time my card is swiped that I can use to redeem gifts. But how much do I actually have to charge to my card to even get the cheapest gift that they offer? Gold, titanium and platinum cards do offer better rewards. But seriously, who has the six-figure monthly incomes that are required for you to own one of these babies?

So far, the only pros that I can think of me having a credit card are these -1) documentary requirement/proof of your capacity to pay when availing some services and subscriptions and 2) “security” of not having to lug around cash. But are they enough to justify the expenses that having one entails? Heck, a debit card or a negotiable order of withdrawal check book works just as well for the reason number 2.

Bottom line is, the benefits of credit cards are on the intangible side but nothing close to the “For everything else Mastercard” hoopla. Credit cards can actually lose me money if I don’t use it right. I can actually lose out on the discounts that retailers can give on cash purchases and lose money on the annual fees when I prefer to spend using a credit card even if I pay on time.

However, since I’m basically stuck with a credit if all for having additional documentation, here are some of the new rules I’ve decided to follow from now on. 1) Only use a credit card with establishments like supermarkets and restaurants that don’t offer discounts on cash purchases. That way, I can still get to earn reward points. 2) For establishments that do, pay in cash and demand a discount. 3) Use the reward points to have annual fees waived. 4) Always pay the statement on time.

Sounds like a good plan.