Credit cards are a two-edged sword. Use them the wrong way and they can easily become a gateway to bad debt. But use them the right way, and they can help you get out of difficult financial situations.

Amy Legate-Wolfe of the Financial Post explored how credit cards can be an effective tool for reducing debt, especially for millennials who may be struggling to pay off their student debts. Given that many of them are now looking to purchase their first homes, it is critical for them to be responsible with their money.

But smart spending doesn't necessarily mean avoiding credit cards entirely. Some people believe that paying with cash or debit is the better and safer practice, and though that may be true in some cases, it isn't the only way to prevent one's back account from going under. Julia Miller, a representative at the Royal Bank of Canada, says that choosing the right credit cards could help you stay out of a stressful debt situation.

"Clients can pay down their credit card balance with points, pay for purchases in-store, pay their bills, send an e-transfer to a friend, convert points to a wide variety of partner loyalty programs or donate them to a charity of your choice," she said.

Not only do credit cards with reward programs help the users keep their debts at bay, they also allow them to continue building credit. PC Optimum is a prime example of this—Barry Columb, the president of President's Choice Financial says members can pay for a lot of things using their points, including groceries, clothing, and other essential goods. PC Optimum also recently partnered with Esso, so users can use their points to pay for gas as well.

"We partnered with Esso to bring redemption from our stores to the pumps at a time when gas prices are demanding an even greater share of Canadians’ wallets. In late 2020, we launched the PC Money Account, an account that allows customers to pay with their own money and still collect the points they depend on." said Columb.

Of course, every credit card is different, so it's important to do your research to see if the rewards they offer will suit your needs. Credit cards that accumulate reward points that can be redeemed or cash back with every purchase are a good place to start, and it's even better if they don't have any annual fees. With Canadians' debt rising to concerning levels, perhaps now is the perfect time to reassess one's credit card situation.