Tyler Tervooren, author of the blog Advanced Riskology, uses credit cards for almost every purchase he makes, but he pays the full balance every month so he never owes a finance charge.

"My strategy is to use them to accumulate frequent-flier miles that will allow me to travel the world practically for free," Tervooren says. "I track all my spending and stick to a budget using Mint.com." Mint.com is an online money management and budget-planning site.

Still, most people carry credit card debt, Farrell says. "So many of us say we pay off our credit cards at the end of the month, but in reality we may be carrying $1,000 or $2,000 in debt," he says. But for those who are disciplined enough to actually carry a zero balance, this is a great way to use a credit card.