Only a good suggestion if you don't have the dedication and intelligence to pay it off every month.
Given the cash back options...frequent flyer point options...etc on credit cards, you are better off putting everything you can on your card and then paying it off at the end of every month.
This only gets in trouble if you can't budget and ensure that you don't charge items AND spend the money needed to pay it off.
This is just like people who think it is a good idea to be getting a tax refund. Dumbest thing you can do with yoru taxes. you just gave the gov't your money interest free.
Best way to do it is to have as little as possible witheld (right up to the point of payign a penalty for under witholding)....put the extra money in an account each month....then use the money to pay your tax bill at the end of the year. You get the time value benefit of the money.
Agree 100% about the tax refunds, but I doubt most people see and/or redeem enough points or miles to make the hassle and additional risk, as described in the OP, worthwhile. Also, studies have shown that people in general spend more money when using credit than when using cash, and I'd be willing to bet that the related increase in spending negates any gains in miles or "rewards". I'd be willing to bet that on an annual basis the discounts I get on things when I use cash coupled with less spending is at least equal to these programs, and my finances are simpler and easier to manage.
I made close to $1k in rewards in 2012 just for using credit cards.
My above point applies here as well, and while I'm not sure of your situation this amount seems unusual. Assuming a 2% reward rate (I'm sure there are higher out there), you'd have to spend $50,000 to get that. I bet most people don't have enough qualifying expenses to "earn" nearly that much.
Not only are there monetary perks, using a credit card (and paying it off) is also good for your credit score.
Of course, the reason credit card companies can offer such good deals is that 90% of the people using them are idiots and get behind on their payments and end up paying out the ass for interest
I haven't used a credit card since 2006 and have been completely debt-free other than my mortgage (opened mid-2009) since 2008, and when I checked my credit 2 months ago my credit score was 835. Too many people get caught up in the FICO game.