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Old 10-02-2009, 02:57 PM   #21
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Just as long as those using them are aware of what they are exposing themselves to,...
Such as? Again, kept in context of those who pay their bills in full and on time, which is very easy to do with on-line banking.

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Old 10-02-2009, 02:58 PM   #22
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Originally Posted by REWahoo View Post
Ya mean like what those of us who post on internet forums are exposing themselves to?
Yeah, well there is that, REWahoo....

REWahoo, I meant that they are exposing themselves to constant positive reinforcement for spending that they probably don't think about much. If someone thinks that LBYM to the extent reported by Khan, Shawn, or Aaron is something they could not possibly do (for any one of a number of reasons or excuses), and if they use a credit card a lot, then I think they might benefit by thinking about what/who they are exposing themselves to. Sometimes these are SO predictable.
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Old 10-02-2009, 03:09 PM   #23
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Yeah, well there is that....

I meant that they are exposing themselves to constant positive reinforcement for spending that they probably don't think about much.
Sorry, but I'm far to logical for that kind of thinking. No way would I look at something and think " Geez, that thing is $100, but I don't really need it, but heck, I'm gonna get $1 back in rewards, so I'm gonna go for it!". Nuh-uh.

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If someone thinks that LBYM to the extent reported by Khan, Shawn, or Aaron is something they could not possibly do (for any one of a number of reasons or excuses), and if they use a credit card a lot, then I think they might benefit by thinking about what/who they are exposing themselves to. Sometimes these are SO predictable.
IIRC, one of those people sat through sweltering heat rather than turn on the AC. Hey, if that's OK with them that's fine. But each of us have different needs/wants. I think it is a real stretch to say that is influenced by responsible CC usage.

It seems the opposite is true. As I said, if you spend $20K/year, and you could put half of it on a 1% CC, that would be $100 each year. You could buy a nice something with that, or give it to charity. Why not?

You lost me with the "predictable" comment.

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Old 10-03-2009, 03:14 AM   #24
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(snip)You seem to be stretching for rationalizations for your personal choices. Whether I spend $20K/year or $200K/year, I would choose to get 1% or more back on every purchase I can make with a CC. It makes a lot of sense. Personally, I'm surprised that any LBYM person would willingly give up a 1% sale on just about everything. But to each their own.

edit - missed this one:


Actually, I am very interested in hearing this. I know you have said you just don't want one (fine), but I don't recall what the advantages were and how they would apply to others. Please enlighten.

-ERD50
I would put the benefits under two general headings: eliminating unnecessary sources of aggravation, and avoiding doing business with people, or businesses, I don't trust. We probably each vary in the amount of money we think is an adequate recompense for a given quantity of aggravation. I happen to have a low tolerance for aggravation, and a pretty high tolerance for doing without money that's not actually necessary for immediate needs. I used to be in a supervisory position at my job. I was miserable at it, in every sense of the word. Eventually, I had the opportunity to make a transfer to a non-supervisory position, which involved a pay cut of (IIRC) 20%, but it might have been closer to 25%. I consider taking that transfer and the accompanying pay cut to be one of the smarter things I've done in my life, and I have definitely been happier afterward than I was before. If eliminating aggravation is worth knocking 20% off the top of my only source of income, it's certainly worth more than the piddling one or two or five percent I'd get back on the lesser amount I might charge on a credit card.

That's heading number one. As for heading number two, I have mistrusted credit card companies ever since the bad old early 80's when I was making barely enough to live on, and getting credit card offers in the mail one after the other. At the time I only thought "anybody who would loan money to someone as broke as I am right now must be out of their ever-lovin' mind!" Having heard somewhat more about the credit card industry since those days, I now suspect they were crazy like a fox, looking for someone who wouldn't be able to pay in full every month, or even better, would only be able to make the minimum payments. Why would I want anything to do with businesses that profit by targeting the vulnerable, and benefit when their customers get in debt over their heads? I've heard it said that tobacco products etc are the only thing it's legal to sell that harms the consumer when used as intended by the seller, but I think credit cards deserve at least a nomination to that hall of shame. I have no desire to do any business at all with companies that, if this thread is any indication, have no qualms about overcharging, sneaking extra amounts onto the bill, changing the payment due date, generally fleecing their customers any way they think they can get away with and then lying about it afterwards; I don't want "rewards" that come out of the profits they make by use of such practices; and I don't believe in knowingly dealing with dishonest businesses. They don't deserve the favor of my custom, or anyone else's either. If every episode of the sort of shady business practices described in this thread was followed by a mass exodus of customers, the companies that use them would either clean up their act or have to shut down. Whichever it was, we'd all be better off as a result.
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Old 10-03-2009, 03:44 AM   #25
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... it is unlikely that much of anyone would be interested in the advantages of not having one.

I'm interested.

Not having a credit card would make travel quite difficult and renting a car nearly impossible.
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Old 10-03-2009, 04:21 AM   #26
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I'm interested.

Not having a credit card would make travel quite difficult and renting a car nearly impossible.
Not so. A debit card with Visa or Master Card logo works just as well, and I get airline miles with mine as well. I got rid of my credit card between fifteen and twenty years ago, but I've had no difficulty with travel, including buying plane tickets online, booking airport shuttles, making hotel reservations, paying for food at restaurants and the like. I believe I've also rented a car with my debit card. I've never had anyplace tell me "we only take credit cards, not debit". I have occasionally asked whether it makes any difference that it's a debit card, and it never has.

I do remember that years ago, many places would not accept a non-logo bank ATM card in the same way as a credit card, but that's so long ago now, I don't know if the banks even offer non-logo ATM cards any more. Even earlier than that, lots of places wanted a driver's license and credit card number with a check, and I do remember it could be a bit of a pain in the neck not having a credit card at that time. But it's been many, many years since I've experienced any inconvenience I could even partly blame on being credit-card free.
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Old 10-03-2009, 08:32 AM   #27
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I'm interested.

Not having a credit card would make travel quite difficult and renting a car nearly impossible.
That was true 20 or 30 years ago, and might or might not still be true abroad, but here in the U.S. the world has moved on. I travel and rent cars all the time using my debit Mastercard.

I am traveling to Oregon later this month, and put airline tickets on my debit Mastercard, for example. It functions just like a Mastercard in renting cars, too (as I discovered, much to my chagrin, when I accidently handed the rent-a-car girl my debit card instead of my government credit card when traveling for work a few years ago - - what a mess that was to untangle!).
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I've never had anyplace tell me "we only take credit cards, not debit".
Me either. As I understand it, I believe Mastercard actually requires those who accept Mastercards to also accept debit Mastercards.
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Old 10-03-2009, 08:37 AM   #28
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Kyounge1956,
Thanks for the good explanation of your reasoning. I haven't made the same choice, but I can see why many would.

Three "cons" of debit cards people should fullly understand before they decide to dump their CCs:
1) In some cases (use to secure a hotel room, rent a car, etc) the bank puts a temporary "hold" on a a big chunk of money in your checking account when you use a debit card. The amount of this frozen money can far exceed the amount of the actual purchase and can remain in place for several days after you've finished the transaction. The frozen money is unavailable for use to pay other bills. So, because you rent a car and the bank puts a freeze on $500 in your checking account, you might bounce a few checks or miss an automatic payment to the utility companies and your mortgage company. Life just got more, not less, complicated. Keeping extra $$ in the checking account to cover these eventualitiies (earning virtually no interest) is a "cost" of using debit cards instead of CCs.
2) Less recourse in the case of unsatisfactory purchases or defective goods. Disputing a charge on a CC is a good way to get things fixed with a merchant, and many cards give add-on warranty coverage for items purchased with their credit card. With a debit card, once the $$ leaves your checking account (e.g. instantly) you've got far less leverage with the merchant. I don't know if any debit cards extend the warranty periods for purchased goods--many years ago they did not.
3) Greater exposure to fraud and theft. If someone steals your CC, your liability for fradulent use is very limited ($50 under federal law). If someone gets your debit card and pin, you can lose every nickel in your affected accounts.

A debit card may have the Visa or Mastercard logo, and it works the same at the counter for most purchases. But the debit and CCs are very different animals, as some folks have learned the hard way.

Anyway, these are negatives that many people find to be outweighed by the positives of getting rid of their credit cards.
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Old 10-03-2009, 09:12 AM   #29
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A positive word for Cap One

Just for some balance, I would mention that I have found Cap One's Credit Card Serivces to be pretty decent. We took a trip to France this summer, and being the tight-wad that I am I applied for and received a Cap One Credit Card as they do not apply any foreign exchange transaction fees on overseas purchases. Based on my understadning, these fees can be up to 3% (perhaps more) of the purchase price. To the best of my knowledge, Cap One is the only major creit card issuer to provide this benefit.

I don't mean to dismiss the OP's issue/concern, but just wanted to share a positive expereince with Cap One.
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Old 10-03-2009, 09:37 AM   #30
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I would put the benefits under two general headings: eliminating unnecessary sources of aggravation, ...
I also have a low threshold for aggravation, however, my personal experience is that there has been almost zero aggravation with my CCs (one small wrong charge, cleared with one phone call), and some simplification (see samclem's post - float = convenience). The net is LESS aggravation with the CC, and rewards on top of that (thank you AMEX and Visa).

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and avoiding doing business with people, or businesses, I don't trust.
OK, but if you extend that to all lines of business, you probably need to live in a cave. As long as I pay in full and on time, I am not exposed to that side of things, and that's good enough for me. But to each their own.

Quote:
I don't want "rewards" that come out of the profits they make by use of such practices; and I don't believe in knowingly dealing with dishonest businesses.

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Originally Posted by kyounge1956 View Post
A debit card with Visa or Master Card logo works just as well, and I get airline miles with mine as well. I got rid of my credit card between fifteen and twenty years ago, but I've had no difficulty with travel, including buying plane tickets online, booking airport shuttles, making hotel reservations, paying for food at restaurants and the like. I believe I've also rented a car with my debit card.
Now you lost me. Aren't Visa and Master Card the bad guys that you don't want to do business with? And those rewards are profits from dishonest practices? Why is it OK with a debit card and not a CC? People run up fees with Debit Cards too - just overdraw your bank account on one and watch the fees pile up ( a teachable moment for my son).

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Old 10-03-2009, 09:43 AM   #31
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Um, guys? This is much ado about nothing:

8 New Credit Card Reform Rules You Should Know

"
7. No more double-cycle billing
Double-cycle billing allows for credit card companies to compute finance charges base on purchases made in current billing cycle rather than previous billing cycle. This policy hurts consumers who pay off their balances in full in one statement period but not the next. Credit card companies will now be prohibited from using this double-cycle billing practice."
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Old 10-03-2009, 10:05 AM   #32
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Along with the rewards and the float, I like having a couple of credit cards available as an emergency source of funds, especially if I'm traveling and may not be able to transfer money to my bank account, or time to do so if the money is at another institution.

I also find it less of a hassle than making sure I have enough in my bank account to cover purchases. I normally don't come within many 1000s of my credit limit, so I don't worry about my balance if I have to get gas or groceries or whatever. As long as I have the discipline to not abuse it, it works for me. I've had more charges, both bogus and legit, from my bank than I've had from my CC.
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Old 10-03-2009, 10:41 AM   #33
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Along with the rewards and the float, I like having a couple of credit cards available as an emergency source of funds, especially if I'm traveling and may not be able to transfer money to my bank account, or time to do so if the money is at another institution.

I also find it less of a hassle than making sure I have enough in my bank account to cover purchases. I normally don't come within many 1000s of my credit limit, so I don't worry about my balance if I have to get gas or groceries or whatever. As long as I have the discipline to not abuse it, it works for me. I've had more charges, both bogus and legit, from my bank than I've had from my CC.
Same here. The overdraft protection on my checking account is my Mastercard at the same bank. The interest rate on that card is 8%, and there are no other fees to pay. Sometimes when I have unusually high expenses (estimated tax payments + largish deposit in a TIRA to get below the next income tax level, etc) I deliberately use this as a short-term source of cash. Doing this for a very short time (e.g. pay it off within a month or two) can actually save money (and hassle) compared to selling equties and taking a tax hit, etc.

I wonder if these very infrequent excursions from the "pay it off every month" discipline might positively impact one's credit rating?
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Old 10-03-2009, 10:53 AM   #34
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If you can't help to be late, then you can overpay (ie enough to
cover the bill and any recent charges), so when the computers
try to double bill, there is nothing left to charge interest on.
Still have to pay the interest charges up to that point, but at
least not for the whole month.
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Old 10-03-2009, 11:24 AM   #35
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K, what i do, by Calmloki.

Paper money, checks, and as much as is convenient, Penfed card on autopay. I manage to have enough in checking to cover the bill, PenFed draws what they need minus a credit of a minimum of 1.25% each month. I review the bill and match it up with our Quicken entries. This is orders of magnitude easier than the BofA card the gal has to gain airline miles on her Alaska Air program - that card and program, while simpler than some years ago, gets me all postal-y.

Here's the bad math justification for PenFed: each month we spend, say, $1000 just staying alive and warm. If we pay cash at the end of the year we are still alive and have nothing of the money we spent. If we use the PenFed card for the same $1000/month we have an extra $150. So is that $15%/year income on $1000? No, but we didn't spend the year's $12000 at the beginning of the year either. Annualized I suspect the return is closer to 7%. On money we are going to spend in any case. At the gas pump PenFed's 5% back means we pay $.15 less per gallon or so.

It is not convenient for me to use the card for stuff under maybe $20 if it is for personal use and not getting entered in Quicken - not worth the extra bookkeeping versus cash.
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Old 10-03-2009, 12:12 PM   #36
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I'm interested.

Not having a credit card would make travel quite difficult and renting a car nearly impossible.
That was true 20 or 30 years ago, and might or might not still be true abroad, but here in the U.S. the world has moved on. I travel and rent cars all the time using my debit Mastercard. (snip)
Well my travel abroad experience is very limited, but IIRC when my parents took me to Barbados with them in 2001, my debit card worked fine there too. I did take traveler's checks with me but I think I either bought something in a store with my debit card, or got cash from an ATM, with no difficulties. Other than that I haven't been outside of North America since before I shed the credit cards, so I don't know if there might be more snags using debit cards in Europe or the Far East.
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Old 10-03-2009, 12:20 PM   #37
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K, what i do, by Calmloki.

Paper money, checks, and as much as is convenient, Penfed card on autopay. I manage to have enough in checking to cover the bill, PenFed draws what they need minus a credit of a minimum of 1.25% each month. I review the bill and match it up with our Quicken entries. This is orders of magnitude easier than the BofA card the gal has to gain airline miles on her Alaska Air program - that card and program, while simpler than some years ago, gets me all postal-y.

Here's the bad math justification for PenFed: each month we spend, say, $1000 just staying alive and warm. If we pay cash at the end of the year we are still alive and have nothing of the money we spent. If we use the PenFed card for the same $1000/month we have an extra $150. So is that $15%/year income on $1000? No, but we didn't spend the year's $12000 at the beginning of the year either. Annualized I suspect the return is closer to 7%. On money we are going to spend in any case. At the gas pump PenFed's 5% back means we pay $.15 less per gallon or so.

It is not convenient for me to use the card for stuff under maybe $20 if it is for personal use and not getting entered in Quicken - not worth the extra bookkeeping versus cash.
You've really lost me. It looks like you're taking an annual kickback amount on the card and dividing it by your monthly expense amount. Otherwise I don't see how 1.25%+ equates to a 15% or 7% return.
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Old 10-03-2009, 12:43 PM   #38
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...Even though I am missing out on any rewards, somehow I just don't mind a bit...
No one ever became wealthy with the rewards on a credit card. There is wisdom in not having debt - you are wise not minding missing the "rewards"!
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Old 10-03-2009, 12:59 PM   #39
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I am traveling to Oregon later this month, and put airline tickets on my debit Mastercard
Out of curiosity do you use your debit card or cash for most everyday purchases? If you use your debit card for most purchases, I am curious why you think people are more likely to spend money using a credit card compared to a debit card. It seems they effectively function the same for people who pay off their card every month.
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Old 10-03-2009, 01:04 PM   #40
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"Credit cards are good...mmmmkay? Or is it, credit cards are bad?" Mmmm....
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