Debit, Credit or Cash

[Cassie]

I'm considering moving from debit/credit to cash on most purchases. With all the Target/Neiman hacking, I'm thinking this move might limit my exposure. Now that I'm retired I have more time and can plan better. For example, once or twice a month I can withdraw cash for groceries, gas, spending money etc. I'm also not giving my phone number, zip or any other information at checkout. Yesterday I made a purchase at Bath & Body and was asked for my zip code which I gave because I was not thinking. Any thoughts on limiting exposure to hackers or is it hopeless and something we just have to deal with? Thanks for reading.

 

[frayne]

I have one credit card and use it primarily for gasoline and on line purchases. I also have email alerts set up for anytime something is charged to my card. I don't have and will never have a debit card. In this day and age I think it is virtually impossible to totally fly under the electronic radar.

 

[meierlde]

I'm considering moving from debit/credit to cash on most purchases. With all the Target/Neiman hacking, I'm thinking this move might limit my exposure. Now that I'm retired I have more time and can plan better. For example, once or twice a month I can withdraw cash for groceries, gas, spending money etc. I'm also not giving my phone number, zip or any other information at checkout. Yesterday I made a purchase at Bath & Body and was asked for my zip code which I gave because I was not thinking. Any thoughts on limiting exposure to hackers or is it hopeless and something we just have to deal with? Thanks for reading.

To confound the marketeers if you live in a large city find the zip code of the downtown post offices post office boxes and give it. Since a post office box does not say much about which part of town you live in it will confound the marketeers.

 

[braumeister]

Two points:

1. You are passing up a substantial amount of free money in credit card rebates. Give that a thought at least.

2. When asked for your zip code, just make up a five digit random number. The reason they ask for it is that most people use a credit card for their purchase, and with just the combination of your name and your zip code, they can do a remarkably good job of finding your home address and phone number online. Then you are entered into marketing databases which are bought and sold to your detriment.

 

[Nemo2]

You are passing up a substantial amount of free money in credit card rebates. Give that a thought at least.

We charge virtually everything, (wish we could pay income/property taxes, etc, that way too), pay off the balance each month and earn travel, or other, rebate dollars which mount up...it's like getting a 'free' flight/trip once in a while.

 

[brewer12345]

When asked by a cashier for a zip code I just tell them that I don't give it out. Nobody has ever pushed further.

 

[scrabbler1]

Last summer I got a cashback credit card so I have started using a CC for some of my cash purchases, mainly for purchases from my local supermarket. This means I make a cash withdrawal from an ATM once every 3-4 weeks instead of one every 2 weeks which is handy in the winter. With online banking, I can pay the bill electronically (same bank for CC and checking account).

I have to build up $25 in cashback before I can claim it so I am still a few months away from my first redemption.

I used my ATM/debit card maybe once every 3 or 4 years but I have no plans to use that card for anything but cash again.

 

[Midpack]

Whenever we're asked for zip code, address, email, etc. in a retail store, we politely decline. I can't remember ever being challenged, and the cashiers are just doing what they're told, they don't seem to care/mind at all.

We never use our debit card (unrequested bank issue), except at our own bank ATMs.

All cash purchasing would be safer, but it would be a PITA, and the 2% or more cash back rewards are nice. We only have one credit card (forced to carry another yesterday...), and we watch it very closely with email alerts and looking online periodically.

Though I fully understand not wanting to contribute further, like it or not, all of us have information online that we can't see or control.

 

[akck]

You are actually better off using a credit card for your purchases. First, there are the rewards offered on the card. Next, you can get your funds returned by disputing a charge, which would be difficult for a cash payment for items/services to be rendered. Next, you are limited to a maximum of $50 for any fraudulent charge and in most cases the $50 is waived.

So what can you do to minimize fraud? What you need to do is to be diligent in checking your cards transactions online. I check my cards at least weekly and utilize CreditKarma.com at least monthly. This way, I can be on top of any fraudulent charges and stop them immediately.

 

[Ready]

Since my cards all have a 2% rebate, switching to cash would be like giving myself a 2% pay cut. I can't imagine why anyone would want to do that. Common sense must come in to play when being asked to disclose personal information that is none of their business.

Credit cards also offer warranties against theft, damage and warranty extensions, and I can use them to dispute a charge with a merchant if I'm unhappy with their products or services. And I pay nothing for this.

I can't imagine why anyone would want to give all of this up.

 

[H2ODude]

Wait a minute; I thought when the gas pump/credit card reader at the checkout counter asked for your zip code it was to confirm your identity. Not so?

 

[akck]

Wait a minute; I thought when the gas pump/credit card reader at the checkout counter asked for your zip code it was to confirm your identity. Not so?

Yes, that is the purpose. It also can potentially get the merchant a better fee rate by confirming the purchase.

 

[Sue J]

I used to use reward cards for everything. I enjoyed keeping track of which card had what promotion going on and maximizing the rewards. If DH was making a purchase I'd let him know which card to use at which store. He found this very confusing and over complicated. Often he'd just use the card he saw first in his wallet. Obviously, he didn't enjoy the game as much as I did.

About 2 years ago we switched our grocery shopping from a full service/full price/gigantic selection major grocery chain to a local grocer with enough selection and better prices. This local grocer does not take credit cards. I also go to Aldi (no credit cards) monthly, the 18 year old cat loves the canned cat food, so I pick up other things there, too.

DH has always been very "hands off" when it came to household finances. In one of our very rare money conversations he mentioned that he thought it was over complicated to have to think about what card to use at what store under what circumstances. He asked if we could just use cash for any shopping we did. Simple.

Although I enjoyed the rewards card games it's worth it to have him feeling involved and I think he feels like his input matters. I get cash for the upcoming month to use for shopping in person at stores. For gas and online purchases we still use a PenFed VISA card and bills are auto paid with ACH. Our checking account also has a debit card but we don't use it very often.

SInce many charge cards have downgraded their rewards programs this cash system is even more attractive. The best part is that DH now likes to do the grocery shopping!

 

[HawkeyeNFO]

Loss of credit card rewards would have cost me well over $1000 each month in 2013 due to some manufactured spending that I do. I hardly ever carry any cash.

 

[frayne]

Guess, I'm the luddite in the crowd !

 

[meierlde]

Wait a minute; I thought when the gas pump/credit card reader at the checkout counter asked for your zip code it was to confirm your identity. Not so?

What they ask for is the billing zip code. So if your concerned get a private or post office box. In a large city you can get one with a different zip code. They just want be sure that the person using the card knows the billing zip code.

 

[bssc]

Another person who charges everything. In addition to the free cash back, I get airline reward miles.

Also three more things to consider:
1) Credit card companies are on the hook for when fraud happens. In most cases, you could owe a max of $50 but it usually is waived.
2) If you pay cash, you have no credit history. Even if you don't work or borrow money, it does impact your insurance rates.
3) People can still steal your identity without card information from dumpsters, public records and so on.

 

[jebmke]

Another person who charges everything. In addition to the free cash back, I get airline reward miles.

Also three more things to consider:
1) Credit card companies are on the hook for when fraud happens. In most cases, you could owe a max of $50 but it usually is waived.
2) If you pay cash, you have no credit history. Even if you don't work or borrow money, it does impact your insurance rates.
3) People can still steal your identity without card information from dumpsters, public records and so on.

We charge everything possible. Makes cash management easier.

 

[Cassie]

Thank you for the responses, I'm going to use my cc and pay bill monthly. It occurred to me that I haven't redeemed by cash back in a year, I think I have about $325, going to take care of that today and activate the extra points offered for this quarter when buying gas.

 

[Walt34]

We use a mixture of cash and credit cards. No debit card because the consumer protections on a cc are so much better. Generally we use cash for something that will be used up by the time the bill arrives (gasoline, meals out, etc.) and yes, I'm one of those who still writes a check at the grocery store, or cash for smaller purchases. This is not cast in stone and sometimes we'll use a cc if not doing so would require an ATM run. But that is the exception.

I just have some inner difficulty with having to pay for something long after it is gone. There is no rational reason and sometimes I will use the cc at a gas station. Where we usually buy gas they still let you pump first and then pay. At others, especially if it is raining, very cold, or crowded I'll go for the convenience and use the cc. Every cc purchase is immediately recorded in a spreadsheet that DW wrote so there are no "surprises" when the bill arrives and we always know what amount of discretionary spending we have left for the month.

This way of doing things has just evolved other the years and it works for us. YMMV.

 

[Midpack]

We use a mixture of cash and credit cards. No debit card because the consumer protections on a cc are so much better. Generally we use cash for something that will be used up by the time the bill arrives (gasoline, meals out, etc.) and yes, I'm one of those who still writes a check at the grocery store, or cash for smaller purchases. This is not cast in stone and sometimes we'll use a cc if not doing so would require an ATM run. But that is the exception.

I just have some inner difficulty with having to pay for something long after it is gone. There is no rational reason and sometimes I will use the cc at a gas station. Where we usually buy gas they still let you pump first and then pay. At others, especially if it is raining, very cold, or crowded I'll go for the convenience and use the cc. Every cc purchase is immediately recorded in a spreadsheet that DW wrote so there are no "surprises" when the bill arrives and we always know what amount of discretionary spending we have left for the month.

This way of doing things has just evolved other the years and it works for us. YMMV.

No judgement here. Unlike you, we use CC or online payment for everything possible. But like you, we record each charge as it occurs in our check register and subtract it from our balance immediately - we've done that since 1980 or before. When we (online nowadays) pay our monthly CC balance, it's recorded as NC (no charge) and all the prior CC charges are checked off in the register (already subtracted). So we're a mix of new and old...

 

[rbmrtn]

I also use a CC for everything I can, for the cash back reward. Rarely ever use cash, haven't written a paper check in many years. As other mentioned your liability for fraud is limited, just check and report it promptly.

One annoyance is when changing cards, is changing the various accounts that are setup to autobill the card.

 

[H2ODude]

No judgement here. Unlike you, we use CC or online payment for everything possible. But like you, we record each charge as it occurs in our check register and subtract it from our balance immediately - we've done that since 1980 or before. When we (online nowadays) pay our monthly CC balance, it's recorded as NC (no charge) and all the prior CC charges are checked off in the register (already subtracted). So we're a mix of new and old...

Very similar to what I do. Anything that can go on CC does, and every day or two post it in quicken on the CC register. Then the ending balance is posted in the checking register; the shown balance in the checking register is sort of a real time "this is what we have" figure. Each month when pension and what I take from investments is moved in to checking, I put in a dummy estimate of the four biggest recurring expenses; electric, gas, smartphone, and cable. That way the checking balance is a pretty good estimate of "what's left" as you go along. Yeah, it's excessive but I enjoy doing it that way. When cc bill comes in I reconcile and have discovered occasional errors. Last one was when we gave a niece a subscription a year ago for Christmas; they re charged us for renewal which we did not want. Amex took care of it.

DD and SIL are very well off and charge everything. They don't reconcile, just pay the cc bill. As much as they use it I can only guess there are some false charges hitting them. I just can't go that way.

 

[Dash man]

I just have some inner difficulty with having to pay for something long after it is gone.

I have an aversion to debt, but I pay 95% of all purchases with a rewards credit card. I use my iPhone banking app to monitor my accounts and pay my bill the same day the charge shows up on the account. It's amazing how the rewards add up over time. We're saving $1500 on a cruise later this year from a combination of credit card cash back ($900) and travel agency rewards ($600). Haven't paid a cent in interest or fees in years.

 

[daylatedollarshort]

I am getting rid of all the debit cards. One of my kids just had his checking account cleared out by someone making online charges with his his debit card number. It is one thing to have fraudulent charges on your accounts where you can just say, nope not mine, and another to have your checking account wiped out and hope the financial institution makes you whole again some day in the future. I think in this case he will get his money back, because the fraud department discovered it first and alerted him, but it was after his money was already gone.

We also do the 2% back and are getting into the more advanced rewards points / frequent flyer points games. I can't believe I didn't start doing this years ago. It does seem like it is not that hard to make an extra $500 - $1,000 a month in cash and travel value. Just doing the sign up bonus points a few times a year each seems like it will be a number of free round trips to Europe at minimum.