You don't need a credit card. Really.

It's true, right? You need a credit card for modern middle-class life. You can't get along without it. Even an astute friend, one who doesn't follow trends for trends' sake, was caught up in this lie. She posted a Facebook link about how to properly use a credit card. If a credit card had a single redeeming quality, it would be a great link.

But no, there's no reason to have a credit card. Many real-world financial counselors will tell you why:

Say you use your cards responsibly. You pay the whole balance every month, you have no annual fees. You get 2% back and even free tools and perfume every year if you spend enough. You're the shining example of good credit card user, the one who takes advantage of the credit card company and makes money on the bargain. No: you're still a loser according to research - or "a sucker" according to the Boston Globe. You're spending more money thanks to impulse buys. Switch to cash and you can truly come out ahead. More money left over at the end of the month to save, or maybe spend on something more carefully considered.

There are three more common objections, to which I found some answers:

Q: "But not everyone takes cash!"
A: When necessary, use a debit card. You can use them online or anywhere credit cards are accepted. Still use cash when you can, like at the restaurant, or your bill will be magically larger when you're done ordering.

Q: "I need to build my credit!"

A: "Debt is dumb" says Dave Ramsey - never borrow money. OK, just for a house you probably can't buy it any other way. But always buy a house with a large down payment and just a 15-year loan (if you can't, face the fact that you probably can't afford the house). With a good down payment your credit matters a lot less. Is it worth spending years maintaining just the right amount of debt, shining up your credit rating but losing money (see above), for a slightly lower interest rate?

Q: "But what about emergencies?"

A: Plan for them. Build an emergency fund. Save 3-6 months income in a savings or money-market account. Buy insurance (home, car, health, long-term disability, life, liability) as needed. If you're already in a financial emergency, there's other advice and encouragement, but for the rest of us: Cut up your cards, and start building your emergency fund today.

edited 2/27/09 for tone & wording.