I have seen this issue from both perspectives. When I first met my wife, she had about $10,000 in credit card debt and in her case credit cards were a huge liability. Everything she bought actually cost a lot more than the price she paid because of all the interest she ended up paying on it.
On the other hand, I have always paid off my credit cards in full each month and have enjoyed taking advantage of the perks and insurance that they provide over payments in cash. I usually earn a free round trip ticket from Japan to the US each year and there have been a couple of instances where I took advantage of protections that credit cards provide that cash doesn’t (including getting my money back from a retailer after purchasing a fairly expensive camera that didn’t want to work properly and the retailer wasn’t going to do anything about it).
I consider credit cards as an asset (and my wife does now too) because they do provide us with a number of advantages that we wouldn’t have without them with no additional cost to us — the key point being that we always pay them off in full each month.
Please share your own experiences on this topic as a wide variety of views and thoughts are helpful to everyone. If there is one thing that I have learned about personal finances from all of you is that there are always exceptions to the rule and differing circumstances can mean completely different solutions. If you have a blog and you have written about this topic in the past, feel free to link to your writing (although a short summary would be helpful). If you have recently read a good article on this topic, please links and share in the comments.
Image courtesy of amanky