Are Credit Cards Worth It? Here's What Suze Orman Thinks

Suze Orman isn't a huge credit card fan -- but she believes they can be useful.

Credit cards are a financial tool that have caused a lot of controversy. While some financial experts tout the many benefits of card use, others advise people to steer clear entirely and not use credit cards at all.

But while there are lots of black-and-white takes with people arguing credit cards are either wonderful or terrible, Suze Orman is one financial expert who takes a more nuanced approach. In fact, while Orman believes credit cards can serve an important purpose, she also believes they should be used "sparingly" and only under limited circumstances. 

So, when does Orman believe credit cards are worth it? Here's what you need to know. 

Credit cards can help you accomplish an important financial goal

Unlike some other financial experts, such as Dave Ramsey, Orman isn't completely against credit cards. In fact, she has made it clear that credit cards are so valuable that all consumers should make use of them to reap their benefits. 

"I want everyone to have at least one credit card," Orman said on her blog. The reason for that is simple. She wants people to have a card "to help build a solid credit score." 

Credit cards can help build credit in a number of ways. As you pay your card, this creates a record of on-time payments. Payment history is actually the most important determining factor in your credit score. Credit utilization ratio -- credit used versus credit available -- is another important factor, and having a card helps you show you can be responsible by not using a lot of the credit made available to you. 

Because of the many ways credit cards can help you develop your credit record, Orman has stated that "a credit card record is a vital part of building your credit score."

This doesn't mean Orman is a fan of using credit cards

While Orman urges everyone to have at least one card to help develop their credit scores, this doesn't mean she wants people to charge a lot on their cards -- or even open multiple cards. 

"The goal should be to use it as sparingly as possible," Orman says of credit cards. "Using cash or a debit card is my preferred way to cover the majority of your everyday spending." She suggests using the card "for a few expenses each month that you know you can pay in full," and avoiding charging anything else on the card so you don't get in over your head. 

She's also indicated that it troubles her when people open up new cards just to qualify for cardmember bonuses. "A lot of credit card offers pony-up sweet deals to get you interested, such as no annual charge, or a super low interest rate for the first year," she explained. "Then after the first year, they often will start charging an annual fee, and the interest rate on your balance will skyrocket to 15%, 20%, or more."

She doesn't believe you need to open multiple cards once you have one you can use to build credit, and she warns that overspending is a very real risk.

Now, while Orman is right and it's a bad idea to have multiple cards if you can't control your spending, the reality is that those who are responsible and pay their balance off in full each month could indeed benefit from new cardmember perks as well as credit card rewards. 

So you'll need to think carefully about whether you should follow Orman's advice and use credit cards sparingly or whether charging your expenses to earn rewards could be a better approach for you.