"Then you're overpaying in annual fees. I put everything on one or two reward cards; one cash, the other miles to our most-used airline."
Military. AMEX waives annual fees for Active Duty military. Even so, I would keep my AMEX Platinum card even if I had to pay the annual fees. I typically don't use cards for airline miles, as I can get better deals with cash rewards. AMEX Blue gives you 3% back on Gas, and 6% back on groceries. I have a USAA card that gives you 2.6% back on everything.
"But back to your argument...you're simply underscoring my statement of only paying for purchases once. You've yet to explain how a credit card expands overall purchasing power, unless you're exclusively referring to the value of rewards. As you pointed out, a carried balance negates any award positives."
I'm not sure how you came to the conclusion that I was arguing credit cards expand purchasing power. My statement follows:
"Your purchasing power does change though...by quite a bit. If you purchase something on a car and make minimum payments, the item will cost you far more than if you paid cash...this is more of that icky economicky stuff...I know it makes you uncomfortable..."
Unless you pay off your balance in full at the end of each period, anything you bought with a card is going to cost you more than if you had paid cash. Which means you can buy less stuff with a given amount of money.