Debit, Credit or Cash

[Mulligan]

Quote:

Originally Posted by Cassie I'm not online with banking...or purchases other than a plane ticket. I also don't have a pay-pal account. I do move $$ from my bank account to my brokerage account. Help me get the other foot in the 21st century.... what are the pros cons of using cc or banking online? Thanks

I muddle along in the middle of things... Some autopay, some monthly from CC, and about 5 checks a month. Every transaction I purchase is a rewards card except restaurants and they will never see my CC. Cable provider will always get a check because they know it's not direct pay and I use it over their head every year. If you were a frequent traveler in retirement it would be very convenient to set all your bills online, as you would never worry about overdue bills when returning or having someone pay them while you are gone.

[Cassie]

Quote:

Originally Posted by Mulligan I muddle along in the middle of things... Some autopay, some monthly from CC, and about 5 checks a month. Every transaction I purchase is a rewards card except restaurants and they will never see my CC. Cable provider will always get a check because they know it's not direct pay and I use it over their head every year. If you were a frequent traveler in retirement it would be very convenient to set all your bills online, as you would never worry about overdue bills when returning or having someone pay them while you are gone.

Thanks, I have set up auto pay for mortgage, gas, electricity, phone, u-verse, alarm, & LTC. I too muddle in the middle...guess we're middle muddles.

[scrabbler1]

Quote:

Originally Posted by Cassie Thanks, I have set up auto pay for mortgage, gas, electricity, phone, u-verse, alarm, & LTC. I too muddle in the middle...guess we're middle muddles.

I am a middle muddler, too. I have ACH for monthly payments to entities I am unlikely to change or get rid of. Those include phone/internet, cable TV, and electric. For my monthly co-op maintenance I switched to auto-pay through my online banking (they mail a paper check) because they don't take ACH. I have to change the monthly amount every year and, for 2014, I had to change the mailing address for the check. The only thing I do not like so much about this method of payment is that I don't get to include any payment coupon (but my co-op's managing agent is fine with this). But otherwise that is on autopilot like the ACH payments.

For health insurance, I will pay by paper check because I have changed providers so many times over the years and don't want to set up something new and I want to include the payment coupon. I also worry about being double-billed by mistake.

For my credit card, I pay it on line through online banking because it is the same bank with my checking account. Just a few point-and-clicks to make the transfer.

All of my other bills are less frequent than monthly so I am fine with paying by paper check I mail out myself. And they all include some payment coupon and/or lots of info I write in the memo part. These include income taxes, auto insurance, homeowners insurance, and charities. With some of these, I have used a paper check from one of my mutual funds because it was for a large amount, too big for my regular checking account to handle.

Once in a while I have an in-person payment by check such as for my dentist.

Overall, it is good to have all of these choices so I can pick the best one for the bill I need to pay, giving me the best combination of convenience and security.

[bssc]

One thing we do for restaurants is that round up to the nearest dollar so when I check the statement, I get alerted if something is off. Off included bad math on my part and them forgetting to charge me for the tip.

[clifp]

I never use a debit card for the all reason outlined above. I'll pay cash for small transactions and for anyone willing to give me a cash discount. Other than that a rewards credit card, not only that but I have that using something like Mint. It really helps summarize my spending to use credit cards on most everything.

[cranberryjoe]

I use credit cards for everything and pay in full each month. I play the card shuffling game to maximize cash back rewards, although at some point I'm sure I'll get tired of the complexity and drop down to using one or two cards.

One benefit of paying everything with credit cards is expense tracking. It's easier to know how much I'm spending on groceries and restaurants and hobbies because it's all in the CC statements which I download into my financial tracking software (MoneyDance). I've tried tracking cash expenses and it just doesn't work for me. I'm in my first year of ER and I want to track expenses closely for the first few years to be sure my plan is working.

[HFWR]

Nearly all bills and purchases are paid by credit card, for either air miles or cash back. Paid in full each month. Use my debit card to get cash from the CU's ATM.

[youbet]

Why is it that people, especially on this forum, mention "paid in full each month" in regard to credit card usage. Given this audience, wouldn't it be the extreme exception for someone to regularly carry a balance?

I assume, on this forum, when I mention that I use my credit card for some categories of purchases, that everyone knows that means that items purchased during the month on the CC are paid for in full at the end of the billing month. That is, that I'm not carrying an ongoing CC balance.

Bad assumption? Should I be mentioning "paid in full each month" each and every time I mention "CC?"

[Mulligan]

Quote:

Originally Posted by youbet Why is it that people, especially on this forum, mention "paid in full each month" in regard to credit card usage. Given this audience, wouldn't it be the extreme exception for someone to regularly carry a balance? I assume, on this forum, when I mention that I use my credit card for some categories of purchases, that everyone knows that means that items purchased during the month on the CC are paid for in full at the end of the billing month. That is, that I'm not carrying an ongoing CC balance. Bad assumption? Should I be mentioning "paid in full each month" each and every time I mention "CC?"

I think some posters are just emphasizing that they are not chasing credit card cash back money buy owing interest back on the purchases. Some of those cash back commercials are so over the top, they make it look like you earn a profit every times you successfully beat your friend to the punch to pay for lunch with your credit card.

[aja8888]

Quote:

Originally Posted by youbet Why is it that people, especially on this forum, mention "paid in full each month" in regard to credit card usage. Given this audience, wouldn't it be the extreme exception for someone to regularly carry a balance? I assume, on this forum, when I mention that I use my credit card for some categories of purchases, that everyone knows that means that items purchased during the month on the CC are paid for in full at the end of the billing month. That is, that I'm not carrying an ongoing CC balance. Bad assumption? Should I be mentioning "paid in full each month" each and every time I mention "CC?"

Yes, it would be hard to believe that the frugal folks on this venue would be caught dead with a revolving balance on a CC. Rates are crazy high (25%+) and anyone that has to pay that rate is certainly not a candidate for FI, let alone ER or even R.

I suppose you can abbreviate "paid in full each month" by using PIFEM?

Example: "I use my CC (PIFEM) for all my purchases..."

[Mulligan]

Quote:

Originally Posted by aja8888 Yes, it would be hard to believe that the frugal folks on this venue would be caught dead with a revolving balance on a CC. Rates are crazy high (25%+) and anyone that has to pay that rate is certainly not a candidate for FI, let alone ER or even R. I suppose you can abbreviate "paid in full each month" by using PIFEM? Example: "I use my CC (PIFEM) for all my purchases..."

I am probably a bit of an oddball compared to others here, as I pay my rewards purchases in full each month, but I have a couple separate cards I use to carry 0 % rates (3% upfront fee) for frequent 2 year loans. I live off my monthly pension,do not want to dig into my reserves, and have plenty of cash flow to cover the debt. In my 20s I would "borrow from myself" but never seemed to pay myself back. I always pay back my creditors, so I do it this way.

[aja8888]

Quote:

Originally Posted by Mulligan I am probably a bit of an oddball compared to others here, as I pay my rewards purchases in full each month, but I have a couple separate cards I use to carry 0 % rates (3% upfront fee) for frequent 2 year loans. I live off my monthly pension,do not want to dig into my reserves, and have plenty of cash flow to cover the debt. In my 20s I would "borrow from myself" but never seemed to pay myself back. I always pay back my creditors, so I do it this way.

Neat, where does one get a CC with a 3% front fee for use as a 2 year loan? (Curious)

[Nemo2]

Quote:

Originally Posted by youbet Why is it that people, especially on this forum, mention "paid in full each month" in regard to credit card usage. Given this audience, wouldn't it be the extreme exception for someone to regularly carry a balance?

Perhaps because the majority appear not to.......(present posters excepted.. )

Bad Behavior: Men, Women and Credit Card Debt - DailyFinance

[Mulligan]

Quote:

Originally Posted by aja8888 Neat, where does one get a CC with a 3% front fee for use as a 2 year loan? (Curious)

Chase and US Bank are my usual best bets. Though I noticed Bank America sent me a 2.99% through mid 2016 with no cash advance fee. They usually like to drill you for 4% advance so I rarely use them. My best one was about 7 years ago. US Bank offered 0.99% lifetime loan no cash advance. That guy who came up with that deal must have got fired because it was never offered again. I plunked them for $25,000 to buy back my remaining service credit years. Thought about just paying the minimum forever just for fun, but I went ahead and paid it off. I bet I get 2-3 offers a week in the mail with checks ready to use. I always buy my vehicles and such with them as the rate is always better than a bank or conventional loan and no paperwork either. Sometimes on major purchases I will buy on my rewards card to get the cash back, then cycle it on to the 0% interest access check the following month.

[aja8888]

Quote:

Originally Posted by Mulligan Chase and US Bank are my usual best bets. Though I noticed Bank America sent me a 2.99% through mid 2016 with no cash advance fee. They usually like to drill you for 4% advance so I rarely use them. My best one was about 7 years ago. US Bank offered 0.99% lifetime loan no cash advance. That guy who came up with that deal must have got fired because it was never offered again. I plunked them for $25,000 to buy back my remaining service credit years. Thought about just paying the minimum forever just for fun, but I went ahead and paid it off. I bet I get 2-3 offers a week in the mail with checks ready to use. I always buy my vehicles and such with them as the rate is always better than a bank or conventional loan and no paperwork either. Sometimes on major purchases I will buy on my rewards card to get the cash back, then cycle it on to the 0% interest access check the following month.

Thanks, I may be getting offers like that, but I never really look at them closely. I'll have to keep an eye out and see if what comes in the mail is similar.

[Mulligan]

Quote:

Originally Posted by aja8888 Thanks, I may be getting offers like that, but I never really look at them closely. I'll have to keep an eye out and see if what comes in the mail is similar.

Just remember they are trying to set the trap and snag you by one of two ways.. 1) late payment so they can rescind the rate offer and make you pay full rate immediately 2) purchase something on the card after you have cashed the check. This way they do not have to give you the grace period on purchases and can charge interest immediately. My cash advance cards are never used to purchase anything.

[Major Tom]

Quote:

Originally Posted by youbet Why is it that people, especially on this forum, mention "paid in full each month" in regard to credit card usage. Given this audience, wouldn't it be the extreme exception for someone to regularly carry a balance?

Many registered members don't post very often, or at all, and there are plenty of people who read these forums who don't join. I bet there are quite a few people browsing here, who are curious about ER and may not yet be fully clued in to the wisdom of paying CC balances in full every month.

It doesn't hurt to spell it out. I'd hate to think that a person casually browsing this forum would get the impression that it's possible to fund ER through liberal use of credit cards, with little attention given to actually paying off the balance!

[Walt34]

There have been a few who acknowledged that in far less favorable times they succumbed to the lure or perhaps necessity of paying cc interest.

There was a time early in DW's life. She had just started a better-paying job and the transmission on her car needed a pricy repair. No car, no job. She had it paid off in three months. That's a good reason to pay cc interest.

[happy2bretired]

Yesterday I received a little baby item catalog from TARGET. That alone set off my radar...no babies here. The big problem was it was addressed to my address and with my last name, however, with a first name that no one in my family has. Call me paranoid. I did a free credit report from one of the free credit report places...all was ok. But, it was still bugging me this morning, so I placed a fraud alert thru the same credit report place. They will alert the other two places. The fraud alert is good for 90 days. Maybe I can sleep better for at least 90 days.

[cranberryjoe]

I signed up for a Target credit card over the summer. I immediately started receiving flyers in the mail addressed to my address and my last name but some other first name. No fraud on the card. Something is screwed up in their marketing database, and it was occurring long before the highly publicized breach.