DEAR HARRY: A friend's identity was stolen a little while ago, and now she pays only cash. She has canceled all her credit cards. No fuss, no muss. In view of what's happened with Target and others, I'm considering dumping all my cards, too. One card has a balance of $1,300, so I won't be able to do it all at once. I understand that millions of people now want nothing more to do with credit cards. Where do you stand on this?
WHAT HARRY SAYS: I'm not happy about walking around with a lot of cash. If your wallet gets stolen with cash in it, you're out the money. Not so with a stolen credit card. What do you do if you're going to make a large purchase like a TV? Sure, there is the possibility of a store credit, but that could be a hassle.
Credit cards have other advantages. You can get airline miles and rebates on cash or gifts. You have a grace period for payment. Then there's the automatic credit available for every transaction. Finally, there's the elephant in the room with stolen identity through no fault of your own.
Even with a cash-only policy, you should check your credit reports regularly (annualcreditreport.com), and change passwords for online purchases. Don't order the coffin for credit cards yet.