If you were going to use a credit card I would see if you could set it up so that there was an automatic debit each month. That way you would never be late and have to pay the late fee and you would know that you shouldn't spend more than you have in your bank account. All my recurring monthly fees like electricity, water, phone and internet are set up as auto debits so I never have to worry about missing a payment. I purchase very little with my VISA debit card so getting 5 % cash back would make little difference for me but if you really spend a lot using your credit card then I could see why some people would be attracted to getting cash back. Seems surprising that the credit card companies would enable themselves to lose money. If you get cash back and always pay your balance off it seems like they would lose money.