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[Zoe]

Hmm ok. At least I'm not alone. I'm also apparently limited to the amount of withdraws I have too or something like that, as well as the amount of times I can transfer from checking to savings.

There is a limit on savings transactions across the board. That is a federal regulation.

 

[Speevy]

I've only read the first two pages, but uh...my bank has erased fraudulent charges from my checking account on two separate occasions.

This is a debit card. What planet are you guys on?

 

[ToxicAdam]

You're supposed to keep the amount liquid enough that if an emergency arises, you can pay off the loan in full.

So, somebody that has a house, two cars and student loans is supposed to have 500k in cash in reserve? lol

 

[Flo_Evans]

I am not saying the system is right, but the calculation is:

(How much do you owe) / (credit limit)

That ratio goes into your calculation for your credit score as a percentage. As the numerator approaches zero, your credit score goes down.

Zero utilization is bad = you could go out tomorrow and max everything out and not be able to pay the bills each month.

High utilization is also bad = you have maxed everything out and can only afford the minimums.

From what I have read (I read ALOT about how credit score is calculated and how to maximize it before buying a house) they like to see you run up a balance and pay it down. That is why there is also a field for "high balance" on the report.

 

[Valkyr Junkie]

I don't use a Credit Card because I can afford shit on my own, I don't understand why American Express should get involved in my purchase of a TV if I can afford it, Just so I can get points? I understand I am giving that up.. ok that's fine with me.

Which is fine, but at the end of the day allowing "American Express to get involved" is nothing but good if you're the consumer; in the form of credit history and rewards. You might scoff at the concept of "points," but at the end of the year that translates into a check for a couple hundred dollars all because I chose to pull one card out of my wallet instead of another.

 

[jmdajr]

So, somebody that has a house, two cars and student loans is supposed to have 500k in cash in reserve? lol

why the fuck did they get a house, two cars, and student loans if they couldn't afford it?

 

[eznark]

Unintended consequences of government regulation...

well I never!

 

[Zoe]

I am not saying the system is right, but the calculation is:

(How much do you owe) / (credit limit)

That ratio goes into your calculation for your credit score as a percentage. As the numerator approaches zero, your credit score goes down.

And as the ratio approaches 1, your credit score goes down.

They want to see a happy medium where you have plenty of credit available and you're actually putting it to use. Paying it off in full each month has no bearing on that.

So, somebody that has a house, two cars and student loans is supposed to have 500k in cash in reserve? lol

We're talking about the ideal scenario where someone has the capability to pay something off in full. They should still take the loan because there are better ways to use the money.

 

[ToxicAdam]

why the fuck did they get a house, two cars, and student loans if they couldn't afford it?

I cant tell if you are serious. :/

I'm usually good at this.

Unintended consequences of government regulation...

well I never!

More like corporations using government regulation as cover to fuck over customers more ..

 

[sonicfan]

Which is fine, but at the end of the day allowing "American Express to get involved" is nothing but good if you're the consumer; in the form of credit history and rewards. You might scoff at the concept of "points," but at the end of the year that translates into a check for a couple hundred dollars all because I chose to pull one card out of my wallet instead of another.

It ain't "points" that I get, it is cold hard cash..... Some people just can't seem to grasp that AmEx is paying me to use their credit card... Yeah, I could pay cash, I have enough in the bank, but it would be foolish to basically turn down extra money just so I can say I don't use an "evil" credit card....

 

[David Incorporated Esq.]

why the fuck did they get a house, two cars, and student loans if they couldn't afford it?

Maybe the payments on all of those loans is only 20% of their gross income, which is actually super-duper low. That doesn't mean they have the full balance of the loans in liquid cash.

God damn that would be such a monstrously moronic thing to do it baffles my mind that people would think it proper.

"I'm going to take out a loan for $500k on a house, but keep $500k in my checking account just in case. HERPLE DERP."

 

[jmdajr]

I cant tell if you are serious. :/

I'm usually good at this.

I'm not being funny dude. I know lots of people are in that situation but you can avoid it.

 

[yayaba]

If you pay off the total balance yes there wont be any interest rates... but why have a credit card if you can pay off the full balance already?

The rewards for one. My Amazon credit card nets me around $150 in gift certificates every year and I pay that one off every month.

My Amex got me almost $400 last year on cashback rewards. Yup, pay that one off fully each month too.

 

[CrankyJay]

Oh god I'm making money on an investment but I have debt!!! DEBT!!! DEEEEEEEEEEEEEEEEEEEEEBT

There's a difference between "I bought too many TVs and thought my CC was free money!" and "I've taken on debt to make money." This is the hurdle that nervous people can't get over. Example: I finally caved in and my wife and I paid off all of our student loans at once because carrying the debt made her nervous--that's $10,000 at <4% interest that we could have put somewhere making >4% return.

Not to mention any interest you pay on student loans is deducted from your taxable income.

 

[Speevy]

I pay $5 a month for student loans, for the next 3,800 years.

So when I'm 3828 years old, watch out world.

 

[jmdajr]

Maybe the payments on all of those loans is only 20% of their gross income, which is actually super-duper low. That doesn't mean they have the full balance of the loans in liquid cash.

God damn that would be such a monstrously moronic thing to do it baffles my mind that people would think it proper.

"I'm going to take out a loan for $500k on a house, but keep $500k in my checking account just in case. HERPLE DERP."

in your checking account?

Keep 6 months worth of living expenses and invest the rest.

I know what you are saying. But if you don't have money saved up for emergencies or can even save money after your monthly expenses, it's not a good idea.

 

[eznark]

More like corporations using government regulation as cover to fuck over customers more ..

No shit. I can't believe it's legal for those evil corporations to force people to use debit cards. Someone aught to pass a law.

 

[Fernando Rocker]

Well... as long as we are all happy, everything is good.

Debit-GAF is not going to convince Credit-GAF and viceversa.

 

[David Incorporated Esq.]

Not to mention any interest you pay on student loans is deducted from your taxable income.

Did I say my wife? I meant to say my ex-wife.

in your checking account?

Keep 6 months worth of living expenses and invest the rest.

Well yeah, that'd be the sensible thing. What I got from the conversation was "You should already have the full value of any loan you take out in liquid assets", which is imbecilic. I'm sure I missed a few steps in there but felt like saying something obnoxious.

 

[Valkyr Junkie]

It ain't "points" that I get, it is cold hard cash..... Some people just can't seem to grasp that AmEx is paying me to use their credit card... Yeah, I could pay cash, I have enough in the bank, but it would be foolish to basically turn down extra money just so I can say I don't use an "evil" credit card....

Why are you preaching to the choir?

 

[Axion22]

I've only read the first two pages, but uh...my bank has erased fraudulent charges from my checking account on two separate occasions.

This is a debit card. What planet are you guys on?

Don't ask, when you refute the things they say are problems, that's "retarded" logic. I have no choice but to assume they have a direct incentive to convince people to use credit cards.

 

[CrankyJay]

Did I say my wife? I meant to say my ex-wife.

LOL. Oh fuck.

I believe that's only if you itemize though.

edit: Actually, you don't have to itemize:

http://www.irs.gov/taxtopics/tc456.html

 

[ToxicAdam]

No shit. I can't believe it's legal for those evil corporations to force people to use debit cards. Someone aught to pass a law.

Actually, isn't this the opposite? A corporation will be forcing people back to using credit cards because they can extort more money from their bad habits.

 

[Zoe]

Well yeah, that'd be the sensible thing. What I got from the conversation was "You should already have the full value of any loan you take out in liquid assets", which is imbecilic. I'm sure I missed a few steps in there but felt like saying something obnoxious.

We're talking about the scenario where a person has the option between paying it off with cash on Day 1 versus taking out a loan.

I believe that's only if you itemize though.

edit: Actually, you don't have to itemize:

http://www.irs.gov/taxtopics/tc456.html

Yeah. I did it on my online return.

 

[eznark]

Actually, isn't this the opposite? A corporation will be forcing people back to using credit cards because they can extort more money from their bad habits.

As long as no one elects AstroLad president, people can always use cold, hard cash. Or food stamps.

 

[GaimeGuy]

I pay my bill through my CCs website which is linked to my checking account. Takes less than a minute.

that is exactly how unpinned debit card transactions work.

 

[jmdajr]

Did I say my wife? I meant to say my ex-wife.



Well yeah, that'd be the sensible thing. What I got from the conversation was "You should already have the full value of any loan you take out in liquid assets", which is imbecilic. I'm sure I missed a few steps in there but felt like saying something obnoxious.

yeah, if you had that much money why take out the loan?

just make sure you have a safety net and be sure you can afford to take out the loan in the first place.

 

[EYEL1NER]

And what's that shit talk about paying gas with debit?

I can go to any Shell, Exxon, etc. gas station, and tell the cashier "I want $20 of gas"... the employee just slide the card, and done. $20 are paid from my bank account. No money is hold.

If my bank account doesn't have the $20, the transaction is not done. That simple.

your doing it wrong! the right way is to barrow money from American Express, then go home and pay off your American Express with your money.

lol wtf

But think of all the perks you will be getting!!!!!

 

[David Incorporated Esq.]

We're talking about the scenario where a person has the option between paying it off with cash on Day 1 versus taking out a loan.

Gotcha, should have caught on to that seeing as how I was the first guy to say "take out a loan on a $30,000 car, invest the $30,000."

Welp.

Anyway, there's just no good reason to use a debit card instead of a CC that I can see, outside of being a pants-wetting ninny who's terrified of cats, sunny days and debt.

Edit:

yeah, if you had that much money why take out the loan?

just make sure you have a safety net and be sure you can afford to take out the loan in the first place.

Because you can take out a loan then invest the rest of the money you would have spent on the item and invest it at a higher rate of return than the interest on the loan. You'll come out ahead in the end.

This is basic shit.

 

[Alucrid]

Don't ask, when you refute the things they say are problems, that's "retarded" logic. I have no choice but to assume they have a direct incentive to convince people to use credit cards.

I don't think anyone has said that banks or cus won't work with you to solve fraudulent purchases with debit cards, just that some think that fraudulent purchase solving is easier with a CC.

 

[MightyHealthy]

LOL @ the hate for debit cards..."wahhhh wahhh they put holds on my money!!!!!"

I'm going to close my Chase checking account next week. Ever since they purchased Wamu, it's been downhill.

c/s

WaMu chomped up Providian, and they actually IMPROVED my card service.

Chase chomped up WaMu, and I'm losing features left and right.

 

[jmdajr]

We're talking about the scenario where a person has the option between paying it off with cash on Day 1 versus taking out a loan.

As long as you don't blow all your money I say go for it. With no debt you can built back up your savings pretty damn quick. But ALWAYS have emergency mula.

 

[ToxicAdam]

As long as no one elects AstroLad president, people can always use cold, hard cash. Or food stamps.

They wouldn't, they would go back to paper checks (remember that awesome, speedy method of transaction?). Which is still rife with even more fraud and abuse than debit cards despite the fact that hardly anyone uses them anymore.

 

[Zoe]

As long as you don't blow all your money I say go for it. With no debt you can built back up your savings pretty damn quick. But ALWAYS have emergency mula.

What if it was 0% interest?

 

[Hari Seldon]

LOL. Oh fuck.

I believe that's only if you itemize though.

edit: Actually, you don't have to itemize:

http://www.irs.gov/taxtopics/tc456.html

There is an income limit though.

 

[jmdajr]

Gotcha, should have caught on to that seeing as how I was the first guy to say "take out a loan on a $30,000 car, invest the $30,000."

Welp.

Anyway, there's just no good reason to use a debit card instead of a CC that I can see, outside of being a pants-wetting ninny who's terrified of cats, sunny days and debt.

Edit:
Because you can take out a loan then invest the rest of the money you would have spent on the item and invest it at a higher rate of return than the interest on the loan. You'll come out ahead in the end.

This is basic shit.

well that depends. you have to do the math. If you have no debt you can save money much much faster in many instances. Given enough time you'll actually come out farther ahead.

I realize everyone can do it their own way, but you gottta come out ahead in the end.
Personally I like the debt free approach and not taking loans you don't need.

 

[joelseph]

There are numerous reasons, but for starters you have much less protection on a debit card as compared to a credit card. That Visa logo on your debit card doesn't mean you can call Visa if you end up with fraudulent charges; it just means it can piggyback off Visa's payment system. That means if you end up with bogus charges, you have to call your bank, who at a minimum will almost always require you to open a police report and jump through a bunch of other hoops. Of course there are thousands of banks, and each one may have different policies in cases like these, but you can almost always expect it to be more of a hassle than going through a real credit card provider. Not to mention fraudulent charges are taking away real money from you, and if you have overdraft protection on your checking account, you can be wiped out.

The smartest thing to do is get a credit card, and use it like a debit card (only charge stuff you can pay off). Not to mention you can get cashback and other rewards.

This is not true.

 

[Mr.Squirrel]

Credit unions for life, fuck banks

.

 

[David Incorporated Esq.]

As long as you don't blow all your money I say go for it. With no debt you can built back up your savings pretty damn quick. But ALWAYS have emergency mula.

I could do some math for you but it would be a pain in the ass. Take it like this, though:

Person A puts $100/mo. into the principal on their mortgage. Person B puts $100/mo. into an investment.

Person A will pay off the loan sooner but have less money at the end of it. Person B will have a lot of money making him more money.

Long and short of it is this: Loan + investment is faster than paying off in full ASAP.

 

[FlashFlooder]

So many people in this thread equate credit cards with debt. It's weird because I'm always advocating the use of CCs to my friends and generally anyone who will listen, but I've found some people just instantly shut down when they hear the words "credit card".

There isn't a single valid reason I can think of NOT to use them.

 

[Hari Seldon]

Because you can take out a loan then invest the rest of the money you would have spent on the item and invest it at a higher rate of return than the interest on the loan. You'll come out ahead in the end.

This is basic shit.

That isn't always a good choice. If you pay off something immediately you are getting a guaranteed return. If the lowest loan rate you can get is 5% and you pay it off immediately, that is a guaranteed 5% return on that capital. No bank is going to give you 5% on a savings account right now. So if you wanted to outperform that 5% then you have to add risk, or invest it long term in bonds or something so that you don't have access to the money for a while.

 

[jmdajr]

I could do some math for you but it would be a pain in the ass. Take it like this, though:

Person A puts $100/mo. into the principal on their mortgage. Person B puts $100/mo. into an investment.

Person A will pay off the loan sooner but have less money at the end of it. Person B will have a lot of money making him more money.

Long and short of it is this: Loan + investment is faster than paying off in full ASAP.

I've done the math too. I don't agree. It all depends. With no debt you can save money and play catch up very quickly.

 

[btkadams]

People, seriously. Stop fucking using debit cards.

This is the stupidest thing I've ever read. The world shouldn't be living on debt.

My preferred method of payment. But maybe they're better here in Canada.

It's also mine. Canada supposedly has the highest usage rate per capita of debit.

 

[eznark]

They wouldn't, they would go back to paper checks (remember that awesome, speedy method of transaction?). Which is still rife with even more fraud and abuse than debit cards despite the fact that hardly anyone uses them anymore.

No they wouldn't, because no one accepts checks anymore.

 

[Valkyr Junkie]

This is not true.

Which parts? Not my words; came from the mouth of the CEO of a security firm. Plenty of other people in this thread seem to be backing up these claims.

 

[sonicfan]

Why are you preaching to the choir?

Bah.....I was trying to really respond to the post you quoted.....by agreeing with you.....

 

[CrankyJay]

This is the stupidest thing I've ever read. The world shouldn't be living on debt.

It's a good thing you read the rest of the thread...oh wait. You didn't. Otherwise you would see I'm not advocating going into debt. You're just one of many that automatically equate credit cards with being in debt.

Some people use their cards responsibly and enjoy benefits debit card users do not.

 

[JGS]

I don't really know what you are talking about when you mention appearance. FICO scores are calculated from your ratio of outstanding balance divided by your credit limit. Nothing i have said is false.

There's not a negative impact for paying off the card

Have you looked at a credit report? There is a field for current balance. If you're always using your card (every few days), that field will never be zero.

People get hurt by zero balances because that indicates the account is inactive.

Available credit rules all. It doesn't matter if the card is at 0 unless your limit is at 0 too or the card company actually closes it for inactivity. I guess I should say it matter very,very little. Human underwirters may want to see where there are regular steady payments every month but the bureaus rarely care unless it's brand spanking new college kid level credit.

We recommend to our customers all the time to leave even a horrible card open that they may have had for a while and just cut it up because the more available credit you have, the higher your score and vice versa.

In fact, if you have a low limit card that you pay off every month, it could hurt your score because the balance shows when the company reports it. As far as the bureau snapshot method, your available credit is maxed out.

Bottom line rules of credit cards is simple. Use them, ut no more than 50-75% of your available. Never max it out and for the love of God never go over the limit, pay the bill on time regardless of the amount, & your credit will be amazing. Promise.

 

[David Incorporated Esq.]

It's a good thing you read the rest of the thread...oh wait. You didn't. Otherwise you would see I'm not advocating going into debt. You're just one of many that automatically equate credit cards with being in debt.

Some people use their cards responsibly and enjoy benefits debit card users do not.

I got a credit card and the next day three 60" LEDTVs showed up in my living room, which also had new furniture.

Now I'm up to my nose in debt!!! CREDIT CAAAAAAAAAAAAAAAAARDS!!!!!!!!!!!!!!!

Edit:

I've done the math too. I don't agree. It all depends. With no debt you can save money and play catch up very quickly.

I like how you think that playing catch up is better than your money making more money for you.

 

[jmdajr]

That isn't always a good choice. If you pay off something immediately you are getting a guaranteed return. If the lowest loan rate you can get is 5% and you pay it off immediately, that is a guaranteed 5% return on that capital. No bank is going to give you 5% on a savings account right now. So if you wanted to outperform that 5% then you have to add risk, or invest it long term in bonds or something so that you don't have access to the money for a while.

It's like taking a 15 year loan and 30 year. You can save more money a month with a 30 year loan, and less with a 15. But after 15 years, you are fucking done. Now you have all this extra money you can save for the next 15.