1) Record Keeping – If you have good credit and plenty of money in the bank, credit cards are still a good way to keep track of purchases. If you pay in cash, it’s easy to lose track, and paying with checks is going out of style and requires tedious book keeping. Credit cards come with their own book keeping. You just have to pay them off each month to avoid the interest.

2) Security – Why not use a debit card then? Well, credit cards also come with better security. You are protected on purchases, such as the guy who wouldn’t deliver the carpet I purchased. Debit cards are similar, but don’t come with the same kind of purchase and fraud guarantees. Cash of course offers no guarantees. Since I paid with VISA, all it took was one phone call from them and he delivered my carpet within the hour. Plus, it’s easier and safer to carry credit cards than all that cash. Just keep the 800 numbers handy in your house, in case your wallet gets stolen and you need to cancel them.

3) Convenience: How else do you make purchases on-line? Credit cards.

So the bottom line is, for people who really don’t need the credit or the loans, credit cards are still a highly functional convenient, safe, way to make financial transactions with built in book keeping.

On the other hand, a credit card is safer and more secure than giving out your debit card number. A debit card is tied directly into your bank account and a determined thief could wipe it out.

If you pay off your balance on a credit card every month, you won’t have any finance charges. I suspect a percentage of the people you refer to actually do this. It also gives them a convenient statement of their monthly charges which could include business expenses.

For example, let’s assume that I have a previous balance of $0.00 on my credit card (because I pay my credit card balances off in full). Then, on 01/01/07, I use my credit card at Best Buy to purchase an HDTV for $750.00.

Well, the closing date for the credit card statement is 01/24/07. According to the statement, I have a 20 day grace period to make a payment, so the payment due date is 02/13/07.

Let’s assume that I pay the entire $750.00 on 02/13/07. I bought and received merchandise on 01/01/07 and paid for it on 02/13/07. I have extended my “cash float” by 43 days, which means that my $750.00 can stay in my banking account for more than a month and work for me. Some people want the liquidity that a 43 day “cash float” offers.

Furthermore, since I paid the balance in full on 02/13/07, I get that 43 day “cash float” with NO INTEREST (i.e. at no cost)!

Under the debit card scenario, you get a 2-3 day cash float at best since the money leaves your banking account immediately.

One final note: Credit cards can become very problematic when people buy things or services they don’t need with money they never really had in the first place.