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[mike23]

mike23, your entire scheme seems to depend on not paying interest rates on introductory cards which absolutely rapes people in the long term (imagine 12-20% on a big ticket purchase like a PC or TV).
That or getting "rewards" back from credit card companies, which in a lot of situations are completely useless for many people.

I'm talking about paying off the credit card at the end of each billing cycle which avoids interest. The important part is that I'm not suggesting spending money you don't have, just spend it on the credit card and get all the benefits.

My Amazon card gives me 1% on all purchases and 3% from purchases on Amazon.com. It takes about 3 clicks to trade in 2500 points for a $25 deduction on my balance and it's there within a few days. My Citi card is a bit worse with respect to the points:dollars ratio but its still just a few clicks.

 

[Cyan]

Ugh, on this forum there always seems to be certain topics with a small but incredibly vocal minority offering bad advice to anyone who will listen.

Add the CC/DC debate to that list of topics.

Agreed. People go nuts over this stuff when really it's mostly just personal preference.

Bottom line is, using a credit card and using a debit card work out to be mostly the same, assuming you pay in full every month. Really, the main benefits of a credit card are a) float and b) a somewhat better situation if fraud occurs. And the main benefit of a debit card is not having to worry about missing payments.

 

[FStop7]

Responsible use of credit cards offers greater protection and benefits.

Don't spend the money you have! Spend the money you don't have and pay for it later!

It's the American way!

imagine 12-20% on a big ticket purchase like a PC or TV

It's kind of funny to think that these barely count as big ticket items any more as you can get a very nice PC or TV for under $1,000. The days of $5,000 electronics purchases are over unless you want a Bravia or a loaded Mac.

 

[elrechazado]

Don't spend the money you have! Spend the money you don't have and pay for it later!

It's the American way!

Or, you know, spend the money you have, and never carry a balance, but get the rewards and protections offered by good credit cards?

but naw, you're right, herp derp credit cards are dumb.

 

[Hartt951]

If you don't see why that's a bad idea, I can't help you. Nobody can.

I bought something from a Chinese website, and the next day I got a call from my Credit Union asking if I made that purchase. Debit Cards are perfectly safe and secure, plus not being able to buy stuff without having the money for it is not a bad thing. Those people are living life debt free and aren't face with having to file for bankruptcy if the shit hits the fan.

 

[Zaraki_Kenpachi]

Also... why are some of you guys saying that debit cards don't offer fraud protection and security and stuff?

My bank offers me the exact same security features as credit cards.

Because the money is gone? Yes, you get the money back eventually but it can take up to a month like it did for me. Being out $2000 for a month instead of just having a contested charge of $2000 on a credit card sucks balls. Plus you usually get free warranties on things you buy with credit cards where you don't with debit cards. And you have horrible self control if you say debit cards are smart people and credit cards are for those who want to live outside their means. Very ignorant.

 

[GhaleonEB]

Debit cards are for people who knows how to save and only spend their own money.

Credit cards are for people who wants things they can't afford in the moment.

Debit for life!

I have a credit card that is linked to my checking account.

 

[Zaraki_Kenpachi]

Agreed. People go nuts over this stuff when really it's mostly just personal preference.

Bottom line is, using a credit card and using a debit card work out to be mostly the same, assuming you pay in full every month. Really, the main benefits of a credit card are a) float and b) a somewhat better situation if fraud occurs. And the main benefit of a debit card is not having to worry about missing payments.

No, the only real argument comes up when people ignorantly bash the other for ridiculous stereotypes.

 

[Cyan]

Because the money is gone? Yes, you get the money back eventually but it can take up to a month like it did for me. Being out $2000 for a month instead of just having a contested charge of $2000 on a credit card sucks balls. Plus you usually get free warranties on things you buy with credit cards where you don't with debit cards. And you have horrible self control if you say debit cards are smart people and credit cards are for those who want to live outside their means. Very ignorant.

Exactly. That's one reason I use my CC for everything.

No, the only real argument comes up when people ignorantly bash the other for ridiculous stereotypes.

It's more "my way is the only right way, everyone else is stupid!" coming from all sides. But hey, that's human nature.

 

[FStop7]

Or, you know, spend the money you have, and never carry a balance, but get the rewards and protections offered by good credit cards?

but naw, you're right, herp derp credit cards are dumb.

Or just spend the money you have and don't bother with a pointless middle step that is a waste of time in order to make yourself feel like a big shot.

Any decent debit card (Chase, for example) offers the same protections as if it were a credit card.

 

[elrechazado]

Or just spend the money you have and don't bother with a pointless middle step that is a waste of time in order to make yourself feel like a big shot.

Any decent debit card (Chase, for example) offers the same protections as if it were a credit card.

How about the massive amounts of cash back and other rewards? I buy everything with my credit card, often for discounts offered through CC partners, on top of cash back rewards, and pay my balance all the time, and get fantastic protections. Problem? Also, as others are pointing out above me, the float on a fraud situation is not mine, it's with the cc company.

Big shot? This isn't 1979 when having a "gold card" meant you were some pimp...what are you babbling about?

 

[br0ken_shad0w]

Don't worry, debit card users. Us credit card users also got fucked when Congress passed its watered-down credit card reform in 09 which didn't even have a cap on interest rates.

Not to join the debit vs credit war, but I do love my Amazon credit card.

 

[FStop7]

A couple of good articles that sum it up -

http://www.daveramsey.com/article/the-truth-about-credit-card-debt/

http://www.walletpop.com/2009/09/28/dave-ramsey-on-the-myth-of-credit-cards-as-a-necessity/

 

[elrechazado]

A couple of good articles that sum it up -

http://www.daveramsey.com/article/the-truth-about-credit-card-debt/

http://www.walletpop.com/2009/09/28/dave-ramsey-on-the-myth-of-credit-cards-as-a-necessity/

So the aggregate numbers prove that the individual can't use responsibly. That was a nice load of shit.

 

[Cyan]

A couple of good articles that sum it up -

http://www.daveramsey.com/article/the-truth-about-credit-card-debt/

http://www.walletpop.com/2009/09/28/dave-ramsey-on-the-myth-of-credit-cards-as-a-necessity/

Ramsey's program is essentially AA for credit card abusers. Of course he's going to say to never ever use them for anything, and that there's nothing good about them.

 

[mike23]

A couple of good articles that sum it up -

http://www.daveramsey.com/article/the-truth-about-credit-card-debt/

http://www.walletpop.com/2009/09/28/dave-ramsey-on-the-myth-of-credit-cards-as-a-necessity/

Credit cards are bad because idiots can't use them correctly?

The fact of the matter is, I'm $1000+ richer now than if I'd only used debit cards and I'm only a college student. The fact that I have a credit card doesn't make me spend any more or less money, I just use them for what I was going to buy anyway.

edit:

I especially like the first one:

Responsible use of a credit card does not exist. Credit card debt is a major problem in America.

Hm, apparently I don't actually exist.

 

[elrechazado]

Credit cards are bad because idiots can't use them correctly?

The fact of the matter is, I'm $1000+ richer now than if I'd only used debit cards and I'm only a college student. The fact that I have a credit card doesn't make me spend any more or less money, I just use them for what I was going to buy anyway.

No, that's impossible, because americans as a whole have lots of credit card debt.

or something

 

[WickedAngel]

Don't spend the money you have! Spend the money you don't have and pay for it later!

It's the American way!



It's kind of funny to think that these barely count as big ticket items any more as you can get a very nice PC or TV for under $1,000. The days of $5,000 electronics purchases are over unless you want a Bravia or a loaded Mac.

I don't know who you're getting credit through but no creditor I've dealt with has ever required that I spend money I don't have.

You're right in a way though; debit cards can't be beat if you're irresponsible and/or inept with personal finances.

 

[Kai Dracon]

Odd, quite a few people I know use both a debit and a credit card. Most do it this way:

Debit card is used for petty costs that add up fast when you don't keep track - buying fast food, stops at the grocer, normal gas fills... stuff like that. Consumables. Things that aren't investments in a long term item you buy then own.

Credit cards are used for things you're still going to pay off either within one month, or over 3 months *at the most* but no more. The credit cards are used for... Things. Games. Music. Electronics. Clothing. Furniture. Tools. Appliances. I know a fair number of people who follow a simple rule: if they can't pay the credit card off for a small item that month, or a medium sized purchase in two months, they don't buy it now. They divert funds into savings for a few months.

Seems to work out quite well. Debit and drawing on cash forces you to think carefully about your consumables, which also happen to be the things you do really need no matter what: you gotta have gas, you gotta eat, etc etc.

Credit for the Toys (tm) does provide some float on the non-essential goods in case an emergency comes up.

Everybody's happy.

 

[poweld]

I actually am amazed that people here don't see the benefit of responsible use of CCs. I've had mine for a little over 3 years now, and I treat it as a debit card in that I have never had a balance on it that I wasn't capable of paying off at the end of the month.

I've never accrued a penny of interest on my CC debt. Instead, I've gotten the safety of mind that if my card was stolen, any money spent was not my money, as well as, if I were to estimate, $400 cash from points.

Just because some people abuse credit doesn't mean that everybody does.

 

[RBH]

Debit cards are for people who knows how to save and only spend their own money.

Credit cards are for people who wants things they can't afford in the moment.

Ignorance for life!

Fixed.


Believe it or not, it is quite feasible to use a credit card responsibly.

Responsible use of a credit card does not exist. Credit card debt is a major problem in America.

Oh man.

 

[br0ken_shad0w]

Hm, apparently I don't actually exist.

No, you're still the bane of credit card companies. According to them, you're a deadbeat.

 

[captmorgan]

No, you're still the bane of credit card companies. According to them, you're a deadbeat.

They can call me anything they want as long as they keep giving me free games.

 

[See You Next Wednesday]

I'm talking about paying off the credit card at the end of each billing cycle which avoids interest. The important part is that I'm not suggesting spending money you don't have, just spend it on the credit card and get all the benefits.

My Amazon card gives me 1% on all purchases and 3% from purchases on Amazon.com. It takes about 3 clicks to trade in 2500 points for a $25 deduction on my balance and it's there within a few days. My Citi card is a bit worse with respect to the points:dollars ratio but its still just a few clicks.

Are you saying you have a credit card with no permanent APR?
Has things changed & credit cards don't charge a minimum of 8% to the maximum 27+% off ever purchase you make + annual fees after the first free introductory year?

 

[Anno]

Are you saying you have a credit card with no permanent APR?
Has things changed & credit cards don't charge a minimum of 8% to the maximum 27+% off ever purchase you make + annual fees after the first free introductory year?

Only if you run a balance. If you pay the bill they send you in full every month you don't get hit with any interest, regardless of the rate.

 

[Axion22]

Every time this comes up, someone trots out that debit is bad because credit is better.

Fuck off, debit's better than cash, okay?

 

[empty vessel]

I actually am amazed that people here don't see the benefit of responsible use of CCs. I've had mine for a little over 3 years now, and I treat it as a debit card in that I have never had a balance on it that I wasn't capable of paying off at the end of the month.

It is individually useful but socially detrimental in that it allows banks to make money from what essentially amounts to cost-shifting from credit card users to non-credit card users. Moreover, the fees that banks charge retailers have no real relation to the ostensible service provided (infrastructure of the credit transaction system). They are orders of magnitude higher in the US than what the same companies charge European retailers. Essentially, banks and credit card users collaborate to transfer wealth from non-credit card users to banks. Credit card users see only a slight overall wealth transfer, since a part of their rewards are taken back by the retailer in the form of higher prices.

See also:

Interchange fees are common to payment systems throughout the world, and in the second part of their paper, Weiner and Wright review issues and developments in 10 countries. The striking outcome of this section is the diversity of how card payment systems work across these countries. For example, interchange fees are sometimes set by members of a network, by regulatory limits, by network management, by members of bankers associations, or bilaterally between card-issuing and merchant banks. Weiner and Wright find that interchange fees are generally stable or declining in most countries. In many of these countries, declines have been because of recent regulatory action or regulatory threat. The most common public authority to take these actions has been the competition authority in each country, although the central banks of Australia, Mexico, and Spain have been very active as well. Experience in the United States is different from other countries because in recent years its interchange fees generally have been rising.​

http://www.kc.frb.org/publicat/econrev/PDF/1q06pach.pdf (PDF)

 

[2San]

Stolen credit card info, means I'm fucked.
Stolen credit card, means I'm fucked.

Stolen bank on line login info, thieves can't do shit.
Stolen Debit card, thieves can't do shit.

Credit cards are way too insecure.

edit: nvm, American debit cards probably work differently.

 

[jamesinclair]

I remember back in the day when there were no fees on debit transactions (in Canada) and being surprised when one day I found out I only had a limited number of transactions.

Debit card transactions are pure profit for the banks, plain and simple. They should not be charging for what essentially is a user fee.

Banks argue that the transaction cost them money...


But cheques, which require much more processing, have never cost a penny!

. It takes a lot of mental gymnastics and even perhaps a little disingenuity to spin debit cards as inferior/more dangerous than credit.

No it doesnt, it requires finance 101.

Time value of money. Would you rather have the cash on hand for 30 days, and make interest of it, or give it away immediately?

Also... why are some of you guys saying that debit cards don't offer fraud protection and security and stuff?

My bank offers me the exact same security features as credit cards.

Debit fraud your cash is gone. It takes YOU jumping through hoops to get it back. And while you're going through hoops, the money is still gone.

Credit fraud, you never lost your cash, the bank lost cash. They jump through hoops to get it back. Your cash is always on hand.

 

[neutralgamer02]

How did this turn into a cc vs dc debate?

 

[JGS]

Consumers want cards to be regulated. Specifically, you want regulations to force banks to charge retailers less in fees. This will reduce the cost of goods, which are inflated due to the fees retailers have to pay banks and which they pass on to you through the cost of goods. Basically, banks are using cards to siphon money from consumers.

This is incorrect.

They will officially siphon money from their customers in other ways, the merchants will at best keep prices the same, but more likely give other reasons for price increases, and regulation will once again simply mean curbing consumer freedoms rather than banking freedoms. banks have never been in more control and richer now than since the last batch of regulations.

Heck, I'm not sure why I'm griping since it probably means a bigger paycheck for me next year...again .

 

[Open Source]

The lesser of two lobbying evils won.

Eh. Mostly true, although price controls are seldom a good long-term solution to anything.

But if anyone deserves to get bent over a barrel, it's large banks.

 

[ToxicAdam]

How did this turn into a cc vs dc debate?

It always does. Almost any thread about personal finance.

 

[empty vessel]

This is incorrect.

They will officially siphon money from their customers in other ways, the merchants will at best keep prices the same, but more likely give other reasons for price increases, and regulation will once again simply mean curbing consumer freedoms rather than banking freedoms. banks have never been in more control and richer now than since the last batch of regulations.

Heck, I'm not sure why I'm griping since it probably means a bigger paycheck for me next year...again .

You work for a bank, just FYI. While banks will siphon money in other ways, it is in the public interest that costs be direct rather than indirect. Interchange fees are a way for banks to hide costs, by routing them through retailers. If regulating interchanging fees causes banks to directly assess fees to their customers to make up the loss of revenue, that is a good thing. Services should be paid for directly by those who consume them, not hidden and distributed to those who don't. Credit card services are currently being paid for by people who don't own credit cards. That is not good policy. It's an externality.

 

[distantmantra]

Debit cards are for people who knows how to save and only spend their own money.

Credit cards are for people who wants things they can't afford in the moment.

This it the dumbest thing I've heard all day.

My wife and I use our American Express card as much as possible throughout the month and pay it off immediately. Why? Because we get airline miles for every dollar we spend on the Amex. Plus, American Express offers much better identity protection than our bank (Wells Fargo).

 

[Scrow]

This is the truth.

Use a credit card, people. 30 day (at least) interest free loan, 1-3% off all purchases, fraud protection, extended warranties. Hell, I get free phone insurance from paying my phone bill on one of my cards. I could toss my phone into the ocean and a check for a new one would be in the mail the next day.

All for the cost of .... nothing. I haven't payed a dime in interest on my credit cards in years.

*shrug*

debit credit card.

best of both worlds.

 

[Yeef]

...how did this turn into a debit vs. credit thread?

Credit is better if you're responsible, but debit does have it's advantages. Namely, cashback. It's nice to be able to get cash without having to hit up an ATM since plenty of smaller places only accept cash or only accept credit if you spend a certain amount. This is mainly due to the fees associated with cards. I can't speak for all retailers, but a good friend of mine owns a small store and for him there's a break-even point. Basically, both credit and debit fees will charge a flat rate plus a percentage for all transactions (including refunds). With contracts he has running a card through as credit has a lower fee if the transaction is $80 or less, while if it's over $80 the fees are lower on debit.

cash grab for retailers over banks. Just pick the giant corporations you like better.

Not all retailers are giant corporations.

 

[elrechazado]

.

Not all retailers are giant corporations.

not all banks are either

 

[ElectricBlue187]

I've used both but lately I'm going just debit because it's easier for me to keep track of

 

[Yeef]

not all banks are either

I never claimed they were.

 

[Cyan]

debit credit card.

best of both worlds.

Except since debit and credit cancel out... it's just a card.

 

[Grimm Fandango]

I love that my debit card can give me cash back without the use of an ATM machine. Can credit cards do that? Serious question.

 

[thcsquad]

May I ask what debit cards offer the same perks?

I bank with PC and I get 2% back in points for all my purchases using their credit card so basically it works out that they buy my 1 video game every 4 months.

Every debit card I've owned has had free stuff, from Bank of America's Keep the Change to National City/PNC's points. My credit card (Capital One) has no perks, as far as I know.Maybe some cards that require years of credit have cool perks, but I had points on a debit card when I was eighteen and had no credit.

 

[Cipherr]

Debit fraud your cash is gone. It takes YOU jumping through hoops to get it back. And while you're going through hoops, the money is still gone.

Why does everyone keep saying this? I had one incident of fraud, wasnt much, $400 on a debit card, but when I called, I had my account balance restored to the moment when I told them I lost the card. We went through all the other nonsense of getting me a new card like 3 days later when the weekend came.

I used to do everything on my CC's when I was younger because it allowed me to keep cash on hand for oh-shit moments. But now, shit we are old and have substantial savings, and insurance of all types. Oh-shit moments arent going to have a catastrophic effect on me like it could back in school. So our CC's dont get a lot of use. Its just a preference thing really.

 

[elrechazado]

Why does everyone keep saying this? I

Because it's true?

 

[Yeef]

I love that my debit card can give me cash back without the use of an ATM machine. Can credit cards do that? Serious question.

Most credit cards allow you to do what's called a cash advance, which is basically the same thing, except they charge a huge fee for doing so.

 

[gohepcat]

?

Do people really not understand how much cash you can get from using a CC and paying it off at the end of the month?

I think I made about 200 bucks last year just by using my credit card instead of my debit.

Can someone please explain how that was bad? I always had the cash to cover it.


$200. Cash. Deposited in my bank account.

 

[aceface]

People are getting charged for debit cards? Never got charged anything by my credit union and I use the card for everything.

 

[WickedAngel]

?

Do people really not understand how much cash you can get from using a CC and paying it off at the end of the month?

I think I made about 200 bucks last year just by using my credit card instead of my debit.

Can someone please explain how that was bad? I always had the cash to cover it.


$200. Cash. Deposited in my bank account.

It's really a statement about the poor condition of personal financial education in this country. People have no idea how to build and manipulate credit to their advantage.

 

[Zoe]

People are getting charged for debit cards? Never got charged anything by my credit union and I use the card for everything.

Cause you use a credit union and not a bank.