Recently, I wrote a couple of articles having to do with the terrible habit of using debt—especially credit card debt—to buy anything. Every writer, reporter, or economist I’ve read advocates destroying all credit cards and using only cash for purchases. Some even want you to pay cash for a home.

All this caused me to think about my own business and the businesses many of you operate. Many of us receive most of our income from the Internet. How can any of us make a penny without credit cards? How can we—or our customers—purchase anything from the Internet without plastic?

My view is that anyone operating an Internet business should, of course, accept credit cards with no strings, and all of us should have at least two credit cards of our own. One can be for personal purchases we intend to pay within the grace period, and the other for business purchases.

Keeping your personal and business purchases separate will support your case if the IRS ever tries to claim that your business is only a hobby. Other advantages of credit cards are convenience and the easy refund of money for defective purchases. These benefits, however, have nothing whatsoever to do with a credit decision.

There have been several studies in the last few years drawing the conclusion that card marketing practices by major card issuers are drawing irresponsible people into the credit market. This, in turn, is supposedly causing a large increase in bankruptcies.

One result of this thinking is to resort to passing laws to regulate behavior. That is just what Congress did recently by making it much harder to discharge credit card debt through bankruptcy court. The legislation illustrates my favorite paradigm: If you want to find who caused something to happen, follow the money. It’s always true.

In this case the major card issuers lobbied everyone with millions of dollars. It worked, and while bankruptcy has become less useful for some, another industry has burgeoned. This is so-called non-profit credit counseling and debt consolidation.

One company offering such services says they can negotiate a potential debt of $40,000+, with a 23-year payout, down to about $15,000 and 4.5 years to pay. That’s wonderful, but do you really believe your creditors will be happy to lose all that money?

These counselors also contend that a reference on your credit report stating that you are being “managed by a credit counselor” won’t affect any future credit decisions. It’s true that creditors would rather be paid most of what you owe rather than none at all, but if I were a creditor seeing this on your credit report, it would keep me from extending you any credit until everything you owe is totally cleaned up.

Another worrisome thing about debt consolidation services is “free enrollment” and the implication that their services are free. They may be non-profit, meaning they have nothing left after all expenses (including salaries), but there is a maintenance charge on all your payments. I could find no company that would tell me what this charge would be until after I signed up for the service. But rest assured, there is probably a charge. Having said all that, however, counseling is a service that can still help many people.

Among the statistics used to create alarm over blatant credit card use is the average balance owed of over $7,000. The suggestion is made that the $218 per month card payment could be invested in a 12% savings plan for 25 years. That would provide you with $1,354,930, which is magnificent. But finding a guaranteed 12% plan for the next 25 years is harder than it may appear at first. Plus, if there were no credit cards available, most people would take the $218 a month and buy something anyway; they are not likely to save that money. If they had not wanted to buy something, they would not have used the card to start with.

Another fault some find with plastic is the potential for fraud. I use my cards a lot on the Internet, and last year someone stole my number. My account is available to me online, so I caught this quickly. It was no trouble at all to have my card canceled. I lost no money and had a new card in two days. If you closely check your account, as you should, this problem is minimized considerably. My fraud did not even happen on the Internet. I ordered a $6 item by telephone, and the person who took my order also took my card number and used it to promote three affiliate programs he was in.

The point is that fraud may not be so hard to handle if you check your financial records in a timely manner. The awful examples you read about usually result from not realizing what happened, sometimes for years. It is a good financial habit to check all three credit reporting agencies once a year. There are plans you can buy to do this for you, but all are more expensive than doing it yourself.

Here’s how to request your reports:

Experian: http://www.experian.com/ or phone: 1-888-397-3742.

Equifax: http://www.equifax.com or phone: 1-800-685-1111.

Trans Union: http://www.transunion.com/ or phone: 1-800-888-4213.

A final indictment by those against credit cards warns that a major recession will cause a complete collapse of the “house of cards.” But taking the recent recession into account, the Federal Reserve still says revolving credit (which includes cards) fell by $800 million in September and $3.7 billion in October. It looks like we are more responsible than many thought.

Like so many things, credit cards can be good or bad, depending on how they’re used. The responsible use of your credit card, along with the protection and supervision of your good credit record, can offer significant cashflow advantages and financial leverage to the entrepreneur.

Yank Elliott is a home-based entrepreneur and freelance business writer in Hurricane Alley, North Carolina, USA. His Website is http://www.furriwhalesworld.com. He is currently a staff writer for IAHBE. Contact Yank at globalbiz@furriwhalesworld.com.