Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Credit cards...are they worth the risk?
Old 12-14-2007, 03:51 AM   #1
Recycles dryer sheets
 
Join Date: Jul 2007
Posts: 346
Credit cards...are they worth the risk?

I have never had a credit card. I always paid in cash or check or with a debit card.

But after thinking about how you can get cash back and gain a little more interest on your own money it got me interested in maybe getting one and paying it off every month.

I would have no problem paying a credit card off each month my concern is the possibility of someone stealing my identity or something along those lines.

There were a bunch of stores last year that had their credit card info stolen and everyone that shopped there was in a mess.

I just wanted to see what those of you who have used credit cards think if these risks are worth it or not for gaining some cash back and a little interest?

Thanks

Jim
__________________

__________________
summer2007 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-14-2007, 04:17 AM   #2
Full time employment: Posting here.
 
Join Date: Oct 2007
Location: New York
Posts: 898
I can't imagine not having a credit card. How do you purchase things online? How do you rent a car? Even checking into a hotel w/o one must be hard. International travel?

I personally view traveling with loads of cash to be riskier than owning a credit card.

Also, the identity theft risk can be hedged against - main thing is to get your credit info locked at the three agencies.
__________________

__________________
Money's just something you need in case you don't die tomorrow.
Maurice is offline   Reply With Quote
Old 12-14-2007, 04:26 AM   #3
Recycles dryer sheets
 
Join Date: Jul 2007
Posts: 346
I use a debit card for online purchases. I don't travel internationally.

Jim
__________________
summer2007 is offline   Reply With Quote
Old 12-14-2007, 05:05 AM   #4
Full time employment: Posting here.
 
Join Date: Oct 2007
Location: New York
Posts: 898
Ah, right. I can totally see living w/ just a debit card. I misread your post.

The only potential problem I can see is that some rental car companies in some locations won't accept them. I'm not sure the scale of this problem, I've had debit cards rejected for rentals in NY for sure.
__________________
Money's just something you need in case you don't die tomorrow.
Maurice is offline   Reply With Quote
Old 12-14-2007, 06:07 AM   #5
Recycles dryer sheets
 
Join Date: Jan 2007
Posts: 222
Quote:
Originally Posted by summer2007 View Post
I use a debit card for online purchases.
You're wary of credit cards but you use a debit card? You know that number can be stolen too, and if so, the thief has direct access to your money. I think credit cards are much safer in this respect. I've had my credit card number stolen a few times, and it was no big deal. Here's why: first off, the credit card company spotted the purchases pretty much right away and called me to ask whether or not I made them (it's scary how well they know your spending habits). I told them I hadn't, and that was that. The fraudulent purchases were frozen, and I was issued a new card. Second, even if the credit card company doesn't catch it, I will when I get the statement. And then I simply call the CC co, tell them I didn't make those purchases, and they'll be frozen as well. I don't pay for them unless they determine that I really did make them.

However, if someone steals your debit card number and withdraws your money, the money's gone. I'm sure you can talk to the bank and get the money back, but it's the difference of not paying in the first place (stolen credit card) vs. getting reimbursed (stolen debit card).
__________________
CompoundInterestFan is offline   Reply With Quote
Old 12-14-2007, 06:41 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
It all comes down to using it responsibly. Many people spend more with a cc than cash. I try to avoid that I have my payments automatically deducted from my checking acct - avoiding late fees; mailing expense and time.

I never use my debit card, except for cash withdrawls - I believe DC have less legal protection than cc.

Go for it.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 12-14-2007, 07:13 AM   #7
Full time employment: Posting here.
Sandy's Avatar
 
Join Date: Dec 2006
Location: Florida
Posts: 855
I had shopped at that store that had all the credit card numbers stolen. The bank sent a new card, I had never seen any unexpected activity.

On the other hand, I used my debit card at a restaurant and the waitress had a skimmer - took the info and next thing I knew, the bank called me about a in store charge on the opposite coast, 1 hour before I bought gas locally. I filed a police report, the bank made good on the stolen funds and amazingly, the local and state cops along with FBI, used my charge and one other to catch a major ring. Sentenced to federal prison.

Moral of the story - lots of folks try to get your funds illegally - from the street corner hold up for cash to elaborate scams. The risk is all relative, and my experience is that plastic, in either debit or credit form, is pretty safe.
__________________
I would not have anyone adopt my mode of living...but I would have each one be very careful to find out and pursue his own way, and not his father's or his mother's or his neighbor's instead. Thoreau, Walden
Sandy is online now   Reply With Quote
Old 12-14-2007, 07:42 AM   #8
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 191
I echo CompoundInterestFan's thoughts... nothing is 100% safe, but credit cards are pretty safe overall.

I had my ATM card stolen about 15 yrs ago... I can tell you this, I would much rather deal with fraudulent charges on my credit card. With a credit card, it suffices to make a call and the charge is "gone" (and a new card is in the mail). With the ATM card, I had to file a police report, fill out a bunch of forms with the bank and wait for the $$ to be credited back. What a hassle...
__________________
lucija is offline   Reply With Quote
Old 12-14-2007, 07:50 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,644
I always use a credit card when I can. It generates frequent flyer miles and I never pay interest or fees. I am very uncomfortable with debit cards. I don't want to be popping my pin number into grocery store registers. That would make me worry that someone could steal my card and empty my bank account. Is there any guaranteed protection in that case? If someone steals my credit card I am protected. And the cost of that protection is already built into the price of goods we all pay for.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is online now   Reply With Quote
Old 12-14-2007, 07:59 AM   #10
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
I echo what most everyone has mentioned. From my reading Credit Cards are much safer than Debit Cards. With a Credit Card your liability generally is limited to $50 which usually is not enforced if you report the loss in a timely manner (whatever they mean by that - quickly, I guess). With a Debit Card your bank account could be totally drained - if you keep a goodly sum there you could lose a larger amount of money and maybe not get it back as easily or maybe not at all. Besides as donherr mentioned about cash back applying to credit cards - which, to my knowledge, do not apply to DC's. Additionally, you get a long float with Credit Cards.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 12-14-2007, 09:13 AM   #11
Recycles dryer sheets
mn54's Avatar
 
Join Date: Sep 2007
Location: mpls, mn
Posts: 441
Quote:
Originally Posted by Maurice View Post
I can't imagine not having a credit card. How do you purchase things online? How do you rent a car? Even checking into a hotel w/o one must be hard. International travel?

I personally view traveling with loads of cash to be riskier than owning a credit card.

Also, the identity theft risk can be hedged against - main thing is to get your credit info locked at the three agencies.
Is locking your credit at the three agencies a hassle? What is the cost to lock and unlock? Have you had any problems associated with having your credit locked?
__________________
mn54 is offline   Reply With Quote
Old 12-14-2007, 09:17 AM   #12
Thinks s/he gets paid by the post
Coach's Avatar
 
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
Jim, I think that if I were as comfortable as you are without a credit card, I would not get one just for the cashback and float. I very much admire folks who avoid using credit.

Coach
__________________
Coach is offline   Reply With Quote
Old 12-14-2007, 10:25 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,471
IMO a debit card is much riskier than a credit card. A debit card provides direct access to your bank account. A credit card has tons of protection.

I use a credit card regularly - but just for super convencience, and the cash flow (30 day float), as I pay it off every month. I have refused every debit card a bank has tried to send me - no way.

Audrey
__________________
audreyh1 is online now   Reply With Quote
Old 12-14-2007, 11:36 AM   #14
Thinks s/he gets paid by the post
maddythebeagle's Avatar
 
Join Date: Jun 2005
Posts: 2,450
Quote:
Originally Posted by audreyh1 View Post
IMO a debit card is much riskier than a credit card. A debit card provides direct access to your bank account. A credit card has tons of protection.

I use a credit card regularly - but just for super convencience, and the cash flow (30 day float), as I pay it off every month. I have refused every debit card a bank has tried to send me - no way.

Audrey
I have 1 debit card connected to a small balance checking account and dont rely on that balance for other bill payments...If you use one, you dont want to rely on that account for other bills while the bank clears up a mess....I got a debit card with that account because I have a few stores that only take debit card...Another problem with the rewards structures on these cards is that they require signature transactions to get the rewards....so you would want to use a credit card for that reason, also since the rewards are generally higher....

Banks want you to use debit cards because it is cheaper for them....
__________________
maddythebeagle is offline   Reply With Quote
Old 12-14-2007, 01:37 PM   #15
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
Quote:
Originally Posted by maddythebeagle View Post
I have 1 debit card connected to a small balance checking account and dont rely on that balance for other bill payments...If you use one, you dont want to rely on that account for other bills while the bank clears up a mess....I got a debit card with that account because I have a few stores that only take debit card...Another problem with the rewards structures on these cards is that they require signature transactions to get the rewards....so you would want to use a credit card for that reason, also since the rewards are generally higher....

Banks want you to use debit cards because it is cheaper for them....
Bingo

Debit Card = Good for Banks.

Credit Card = better for the consumer.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 12-14-2007, 03:16 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,881
Hey Jim,
Quote:
just wanted to see what those of you who have used credit cards think if these risks are worth it or not for gaining some cash back and a little interest?
I don't think that the "cash back" feature is a good reason to apply for a cc, though it is a nice feature for sure. I have used a national credit card(s) for over 35 years and have never had a bad experience. Others may disagree, but I do not believe that my positive experiences have been unique. We currently charge about 99% of our monthly purchases via CC. We receive about $300 annually in cash back credits.

You may wish to obtain a CC with a low credit limit ($500?) initially and try it out for a while and consider having it increased over time or canceling it if it does not work for you.

The bottom line is that you should fully understand the benefits and drawbacks of having a CC and go with what works for you and your family.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 12-14-2007, 03:23 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
I think since banks are pushing the debit thing, they should be pushing Congress to make the liability of debit cards the same as credit cards.

After all, with all the money they're saving not clearing checks, they should have plenty of money for lobbying........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 12-14-2007, 03:49 PM   #18
Recycles dryer sheets
 
Join Date: May 2007
Posts: 137
You are protected under Federal Regulations when you use your credit card to make a transaction. Your maximum liability for fraudulent transactions when you use a credit card is $50.00. If you report it with in 30 of receiving a statement it is 0.

This is written in law. You do not have the same protection when you use a debit card.
__________________
Freein05 is offline   Reply With Quote
Old 12-16-2007, 01:01 AM   #19
Full time employment: Posting here.
 
Join Date: Oct 2007
Location: Willamette Valley, Oregon
Posts: 831
Quote:
Originally Posted by Freein05 View Post
You are protected under Federal Regulations when you use your credit card to make a transaction. Your maximum liability for fraudulent transactions when you use a credit card is $50.00. If you report it with in 30 of receiving a statement it is 0.

This is written in law. You do not have the same protection when you use a debit card.

Yes. As many have mentioned, with a debit card, thief could drain your entire bank account which is associated with the card.

Also, forget theft. if you make purchase with credit card and the merchandise is unsatisfactory or not delivered (as with mail order), you can dispute/withhold the credit card payment from the merchant until the matter is resolved/

With a debit card purchase, you are stuck with the bad goods or no goods if they are never delivered. The debit card takes the money from your account the instant the purchase is made. No way to dispute it or have any leverage on the merchant.

Credit cards way better---plus the cash back rebates, extra month to pay etc.
__________________
Dreams Worth Dreaming are Dreams Worth Planning For. I Spent a Career Planning for Early Retirement.
RetireeRobert is offline   Reply With Quote
Old 12-16-2007, 01:08 AM   #20
Full time employment: Posting here.
Helena's Avatar
 
Join Date: Aug 2006
Posts: 619
I either use cash or my Amazon.com VISA cc.
There is no annual fee and I pay it off every
month, so there is no interest... plus I get
points to purchase goodies on Amazon.com.

So, actually, I am being paid to use the cc.
__________________

__________________
Helena is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Making money with your credit cards bssc FIRE and Money 32 04-20-2008 03:53 AM
Keep your house or the credit cards? saluki9 FIRE and Money 20 12-09-2007 07:59 PM
Secured credit cards? summer2007 FIRE and Money 3 10-16-2007 10:07 AM
Another way to profit from credit cards SLC Tortfeasor Young Dreamers 98 09-27-2006 04:59 PM
Some additional credit cards worth checking out. laurence FIRE and Money 6 09-15-2005 10:02 AM

 

 
All times are GMT -6. The time now is 10:13 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.