Reach into your wallet, rubberband, or purse – wherever you stash the cash. What’s in your wallet? Personally, as a self-described “minimalist,” I have five cards wrapped in a rubberband – that’s it. No cash. No frequent shopper punchcards. Nothing extraneous.

Living cashless is freeing, and in my mind, safer. Losing a credit card is nothing. Lose the cash, and you’re never getting that back. But there’s a fundamental question I’ve been asking: If I’m in debt, should I even have a credit card?

Plenty of news sources and bloggers have weighed in on this general question of owning a credit card.

Some advocate for little to none:

Have only one credit card with a low limit, and only one loan with monthly payment not exceeding 25% of income.

Cut up your credit cards.

Leo Babauta of Zen Habits (Link)

Others present a case for building credit and learning to manage them:

 If you really want me to give you a number of cards to have, fine… how about five?

John Ulzheimer for Mint.com (Link)

The reality seems far murkier than the pole positions would have you believing. My main credit card offers trip cancellation insurance, auto rental collision damage waivers, travel accident insurance, travel and emergency services, lost luggage reimbursement, trip delay insurance, baggage delay insurance, roadside assistance, price protection, return protection, and much more. If you even travel a bit or ever purchase a large ticket item, these insurances and protections are vital. I get all these things with no annual fee and 1% cash back on all purchases (with 2% back on dining). Not a bad deal, if I’m already going to make the purchases (non-affiliated link to Chase Sapphire card).

Therein lies the rub: If I’m already going to make the purchases. 

The reality is that these features are established to encourage spending – plain and simple. Everything about a credit card is framed around increased spend. It’s ease and culturally-sanctioned use exacerbates it. In fact, the demonization and haunting fears of losing cash or slowing down transactions have been propagated by the major credit processors (see the Visa Check Card ad below).

Without that credit card, you may have never gone through with the purchase. Buying an LCD TV at $300+ is a swipe away. But, it would be at least fifteen $20 bills – the payment and hurt of giving that concrete cash dissuades discretionary spending.

Where does that leave us? Seemingly, it’s in moderation that I must end. A credit card is an important tool to use carefully. Each time we reach into that wallet (or, in my case, rubberband), we must be conscious of the concrete loss of cash. The digital numbers being extracted from your bank account are real. The consequences of spending more are real.

For now, I’m keeping my credit cards. I’m in a managed debt situation due to student loans. Instead of cutting up my credit cards, right now I’m going out and consciously spending less. Because, in reality, the world out there encourages you to spend and spend. Cooking at home, reading a good book, spending time with friends and lovers, and exercise are all so much more meaningful and make it impossible to spend beyond your monthly budget. Let’s refocus on what matters to overcome the debt.