With the financial crisis leaving many leery of the credit and lending industry, tons of consumers have opted to ditch their credit cards for cash; however, a financial expert says this may not be wise. Ray Martin, the financial contributor for the CBS’ Early Show, explained that keeping one or more credit cards in active use is important for building and maintaining good credit.

People Are Ditching Their Cards

In his Early Show column, Martin noted that debit card usage surged in 2009 while credit card usage decreased nearly 50 percent. In general, the average consumer has about five credit cards and in 2008, the average debt for card-using households reached over $10,600.

However, after losing homes and suffering high card fees and lowered or canceled cards due to a credit-driven industry that fell flat, many people simply no longer feel good about using money they don’t have and have opted to spend cash only.

Why You Should Keep at Least One Card

Martin said in his column that using cash 100 percent of the time rather than a credit card intermittently could hurt your credit rating. He explains that while it makes sense to want to pay down as much debt as possible – even opting to dump credit cards – your score actually improves with card use.

For instance, according to CreditKarma.com, the average consumer with a credit card has a score of 689, while the average score of a person without a card is 563. This means, in order to build good credit and make yourself eligible for a house or car, it’s good to regularly use at least one credit card.

The hesitation toward credit and the desire to stick with debit card usage is completely understandable. However, because the credit system is set up in a way that requires we participate in order to maintain a good credit rating and accomplish major goals, it appears that – like it or not – we may have to pick our credit cards back up.

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