Credit Card Debt

[MovingtotheCove]

Thanks to all for pointing out the risk differences on debit vs. credit cards....yes, a cc seems to have insurance if lost and if a debit card were lost I guess a PIN could be somehow cracked.... In the end if I can get some "float" on the money by using a cc...sometimes as much as 50 days if the billing cycle is hit just right and earn my 5% reward level seems like a better choice than to have the debit card charge the bank account same or next day. Oh well, in the end the message we share is that we DO NOT ever pay interest and we DO NOT spend money we don't have and thus by not having debt we are hoping for ER with less worries than if we had debt. Just hope the rest of the economic mess doesn't mess with this too much.

[Alan]

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In addition, Visa and MasterCard have zero liability policies on debit card purchases processed through their networks. Those types of transactions, using cards with the Visa or MasterCard logo, require authorization with a signature instead of a personal identification number.

I wonder if the USA will follow Europe in moving to "chip and PIN" credit cards so that your CC or DC never leaves your possession. No more signatures (who looks at them anyway) instead you insert your card into a reader at the checkout and type in your PIN, or at restaurants the server brings a wireless hand-held reader to your table with the amount to be paid showing on the display. You take the reader, insert the card and type in your PIN.

I was caught several times over the past 3 years trying to pay and the establishment did not accept USA style swipe CC's. If they take Amex then they have a swipe style so no problem. There have been 3 times I had to get someone else to pay (business trips) and once when I had my Dad pay.

Last year, even in a very small shop in a tiny mountain village in N. Spain they had Chip and PIN but we did have our UK Chip and PIN Debit card to use.

[JustCurious]

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Originally Posted by ERD50 So most likely, I would notice and report it within 2 days of 'realizing' my card was lost or stolen (OK, I'm an honest person, but who is going to say "I lost it two months ago, just calling now!"?). So a $50 max hit. And $500 max if I was near brain dead. Further, it sounds like the companies are actually being less restrictive: I should take another look at my CU fine print though, but they have always been 'good guys', so I they are probably in line with this. -ERD50

I don't think you quite understand. Despite the use of the word "realize" in the article, your financial institution will not care when you realized your debit card was lost or stolen, they will only care when it was ACTUALLY lost or stolen. If it was lost 5 days ago, and you just realized it today, but someone used it 4 days ago, your financial institution will rightly conclude that you did not notify them within 2 days of the loss, therefore, you will be responsible for $500. You may feel comfortable with that, but I am not.

As far as relying on your credit union's good graces, well, let's just say you are more trusting with your money than I am. What if they don't do what you expect them to do?

[ERD50]

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Originally Posted by JustCurious I don't think you quite understand. Despite the use of the word "realize" in the article, your financial institution will not care when you realized your debit card was lost or stolen, they will only care when it was ACTUALLY lost or stolen. If it was lost 5 days ago, and you just realized it today, but someone used it 4 days ago, your financial institution will rightly conclude that you did not notify them within 2 days of the loss, therefore, you will be responsible for $500. You may feel comfortable with that, but I am not. As far as relying on your credit union's good graces, well, let's just say you are more trusting with your money than I am. What if they don't do what you expect them to do?

Well, I made those comments assuming that one could take the article at face value. Reality may well be different, I don't put much faith in articles I read, but that was the context of my reply.

Just checked on-line, my CU has a 100% coverage. Further down, it does say that it is my responsibility to report any loss or theft immediately. I'll write them to see what that would mean if it did take me 4 days to realize it was lost, and there were charges in the mean time.

"Trust" is kind of a funny word for me. I don't really "trust" anyone when it comes to financial matters. For me, I don't see it as "relying on their good graces", as much as just having a history of them doing the right thing for their members. When I have a history of working with an organization, and that organization has always treated me fairly and in a businesslike manner, I tend to spend a bit less time worrying about the corner cases of what might happen in unlikely situations. I expect (based on past experience), but maybe not "trust", them to do the right thing. Semantics maybe.

I'll give a counter-example of companies I do *not* "trust" - the kinds of places (cable companies come to mind), that advertise all these starter rates, and make it difficult to even find out what the real on-going rate is. Or the gas station near me that has the big low price on the sign that you can read from the street, with little letters "price with car wash". I don't want to do business with them if I can avoid it.

-ERD50

[Sue J]

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Originally Posted by REWahoo My situation is 180 degrees from yours. My electric, satellite TV and phone bills are set up to auto charge my CC. The county charges a 3% fee to use a CC for property tax payments so I pay that bill by check.

I do the same thing, have my utilities automatically charged to a credit card. I do this for the 2% cash reward on utilities. It's the only thing I use this card for. It's supposed to be for electric, water, cable TV, etc. but specifically not for internet. But our internet is through our cable company so I get the reward on that one, too.

All these utility bills are fairly small so I've been letting the reward build up and someday I'll cash it in. I wish I could use it for our natural gas bill, which is our highest utility, but they don't take credit card payments without a fee, so that one is deducted from our checking account.

[Olbidness]

The protections on my debit card (with the little visa symbol) are exactly the same as a credit card (with the little visa symbol).

[W2R]

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Originally Posted by Olbidness The protections on my debit card (with the little visa symbol) are exactly the same as a credit card (with the little visa symbol).

Mine too (except that I don't have to pay the first $50 like CC customers do), but these guys will never believe it! It's all written into the debit card agreement these days. Mine is a debit Mastercard with the little MC symbol and looks identical to a MC.

I can relate to their resistance to the idea of not having a credit card, though. For one thing, it is pretty scary to try if you have never done it. They are terrified that some car rental agency or hotel might turn down their debit card, which I have never experienced - - MC sees to that. Besides, most people seem to think that for them, credit card rewards more than compensate for any increase in consumerism and expenditures, and possibly fees, an occasional late charge, hassles over bills and due dates and interest rates, and so on.

Obviously 97% of those here prefer to have a CC, according to the poll. I tend to think that they are probably right, FOR THEM but not for me. This is one case where I just HAVE to be the oddball. I will probably die without ever having had a CC in my own name. But then, I enjoyed reading The Last of The Mohicans, too. I love the fact that I have essentially flipped the bird at the credit card companies. Some things in life are just so worth doing.

[OAG]

I never heard of anyone actually having to pay the "first $50 like CC customers do". I know it is there, but I think it is just to cover the CC issuer and they seldom, if ever, invoke it.

[W2R]

Oh, OK - - well, I don't have that $50 in my debit card agreement, it costs $0 to fix a fraudulent charge. So, you may "know it is there, but..." but in my case I "know it is NOT there...". When I first got my debit Mastercard, Mastercard pointed that out as some sort of wonderful thing.

[ERD50]

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Originally Posted by Want2retire but these guys will never believe it!

W2R, I honestly don't understand why you make yourself out to be such a martyr concerning this issue? You've made other statements like 'people may hate me for it....' etc.

As you say below "I tend to think that they are probably right, FOR THEM but not for me.". OK, isn't that good enough? I've said as much - the debit card seem to match your needs - so what's the issue?

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Besides, most people seem to think that for them, credit card rewards more than compensate for any increase in consumerism and expenditures, and possibly fees, an occasional late charge, hassles over bills and due dates and interest rates, and so on.

And I'm not sure why *you* have such a hard time accepting this from us CC users. My CC does not cause me to spend any more than I would otherwise - why would it? I've never had a fee, late charge, billing hassle (one apparent mistaken charge that I cleared up with one phone call, no big deal, and I suppose that could happen with a debit card?), and I've never had any hassle over due dates or interest rates. I can't even imagine what the "and so on" could be?

And for me, I don't "seem to think" it is worth the rewards $, it IS worth the reward $. Thousands of dollars over the years, with no issues. That is the easiest money I ever made.

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I love the fact that I have essentially flipped the bird at the credit card companies. Some things in life are just so worth doing.

That's odd - I'm the one that feels like I'm "giving it to the man", when I get paid to hold onto my own money for several weeks. Yes, for me, getting the rewards, and keeping my money working a few weeks longer is "so worth doing".

Yes, you are in the minority, but that doesn't mean that it is not right for you. It may be. But it also doesn't mean that it is wrong for us, just because that list of things that have never happened to me scare you. You seem so anxious to justify your position by repeatedly saying there are all these risks and problems with Credit Cards, but I have not experienced them, only the benefits. I think you blow them way out of proportion.

But if they bother you, and you feel better with a debit card, fine, stick with it. I hardly see how you are pulling one over on the CC companies though?

-ERD50

[FUEGO]

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Originally Posted by ERD50 But if they bother you, and you feel better with a debit card, fine, stick with it. I hardly see how you are pulling one over on the CC companies though?

Quite the opposite. People like us that have good credit, pay no late fees or interest, don't use convenience checks and pay off balances in full are "deadbeats" to CC companies. W2R could screw over the CC companies even more by getting a CC and paying it off every month while racking up frequent flier miles, points, or cash back.

Looks like I'll be getting another $250 cash back check in the mail in another couple months just for buying what I buy anyway.

I think most CC's come with $0 fraud liability now.

And this is a general question, but how do chargebacks work on debit cards? Say I buy something from somewhere and they don't deliver. I call up my CC and charge back the purchase so I owe nothing. Do debit cards allow you to chargeback? I rarely use it, but the handful of times I have used it in the last decade have proven successful, and threats of chargebacks are also effective in negotiating with the crappy companies to get what you want anyway.

But whatever works. I'm just not sure how not taking advantage of a month or two of float and not getting 1.5-5% back on everything you buy is considered getting back at any companies.