The downside of giving up plastic: Purchase protection

Yes, I've heard the prognostications that continuing to charge up a balance on my credit card will lead to my financial ruin, especially in this economy. Everything I've read says "pay cash" or use layaway -- especially when it comes to holiday spending.

But I have a question -- and a teenager, who like most other teenagers, speaks to me in megabyte lingo when it comes to his holiday wish list.

Here's the question: If (and that's a big "if") I pay cash for that oft-requested Nikon Coolpix S550 10.0 megapixel with 5x zoom, what purchase protection do I have if the thing is damaged? I am so preprogrammed to purchase large or expensive items (or items I would have no idea what to do about if they broke) with my credit card for the purchase protection that the idea of paying cash leaves me to wonder: What if?

In fact, I am so comforted by the purchase protection afforded me by my credit cards that I typically avoid paying for product or manufacturers' warranties. If the thing breaks right away, then I'll just call my credit card company, return the item and get my money back. If it doesn't break right away, then the odds of it breaking in the near future don't seem to warrant the astronomical warranty fee. My conclusion: Use the plastic, keep track of the charges, transfer the amount charged from my checking to my credit card account promptly. Risky, I know, but old habits are hard to break.

I'll try to do what Gail Cunningham, spokeswoman for the National Foundation of Credit Counseling, said in our video, and not turn the ho-ho-hos into oh-oh-ohs.

See related: How to dispute a bill with a merchant via 'chargebacks,' Layaway enjoying small revival for the holidays