They are bad if a holder of a credit card uses it to make purchases using it as money in credit. So what I mean by that is that If you only have $1000 in the bank and you buy an item that's $2000 and you only make $200pw then you're in bad credit. You're using the card for things you can't truly afford, as you can't pay the card off within that interest free period. I have never payed interest on my credit cards ever. As they are always paid off every month. Some then say, well what's the point of a credit card if you don't use it as credit? First of all, you can travel the globe and make purchases online with no problems if you have a credit card. Secondly there are rewards for using a card, now the trap can be that people spend more money simply to get rewards. I don't, I just funnel as much money as I can to turnover onto the card I want to get the reward. Food, bills, even my employers expenses (they pay me back) simply so I can rack up frequent flyer points on the card. Secondly there is no annual fee on the card, so I'm not out of pocket for the reward. Why not use Debit credit? Well you pay an annual fee for those, there are no rewards and you can't use it for credit if some day in an emergency you really need access to credit money. It's basically designed for those that can't manage money, or those with an income too low to apply for credit. eg Students. With all that crap I just said. I only use Qantas AMEX and Commbank Master. So I'm good.