Let’s get one thing out of the way…

You need a credit card to participate in society—unless you truly drop off the grid. And by “off the grid,” I mean live in the woods, in a house built from pine trees you chopped down yourself, wearing clothes you sewed from homegrown hemp, eating cheese you made from the cow in your front yard. If that’s you, great, you don’t need a credit card.

Otherwise, at some point, you are going to want to book a hotel room, or put your homeowner’s insurance on autopay, or put gas in your car without talking to the clerk. And all that stuff is a lot easier with a credit card. So, let’s talk about the right way to use a credit card and the wrong way to use a credit card.

First, the Wrong Way

I went into the Gap the other day to buy some shorts. For the record, I believe shorts are for children and people at the beach—not grownups. But it is so hot here in Myrtle Beach that I had to capitulate. So, I went into the Gap, picked out three pairs of shorts, and headed to the register. The shorts were $16 each. $54 total with tax.

When it’s my turn to pay, the cashier says, “Do you want to open a Gap credit card today? You can save $12 on your purchase.”

I said “no,” and she replied, “Are you sure?”

I was sure.

Then I go to pay with my non-Gap credit card, and on the pin pad, the Gap asks me again if I want to open a credit card. So, now they’ve asked me three times in the span of about 90 seconds. The answer was still “No!”

What is going on here? My guess is the Gap makes a lot more money financing shorts than they do selling shorts. I don’t know what the profit margin is on a $16 pair of shorts, but you don’t become a multibillion-dollar company on shorts alone.

Say you sign up for the credit card, and you save $12 that first day. The next time you go into the store, you charge up a couple hundred dollars. Then you forget to pay the bill because it’s a new credit card, so they charge you interest. Then after a while, they’re charging you interest on interest. Eventually, you owe $500 in interest on shorts, all because you signed up to save $12. That is how they get you.

The takeaway here is you should almost never sign up for store credit cards. And by the way, opening any new account is a big deal. Because the company has to check your credit score, which can make your score go down.

Now, the Right Way

An adult member of society needs three to four credit cards. That’s it. Not 10… not 20. Here are my rules for using them:

• Don’t put stupid stuff like tattoos on credit cards.

• Carry cash and pay with it when you can. There is something about the tactile experience of physically counting out bills that forces you to acknowledge you’re spending money.

• Check your credit card balance once a week or more so the bill doesn’t surprise you. This is easier than ever with credit card apps.

• Pay off your balance in full every month.

• If you have credit card debt, pay it off as quickly as possible. (This is more important than investing.)

I know lots of successful people from many different walks of life, and they all have credit cards. Many personal finance gurus will tell you to shun credit cards altogether. I am not going to infantilize you that way. You are a responsible grownup, and you should have a credit card. Just remember to use it like a responsible grownup.

Jared Dillian