Caught Capital One's hand in my pocket

[kyounge1956]

Sure, they are both LBYM. However, speaking strictly financially now, using a payment method which reduces the cost of the things you buy (by 1%-5%), and gives you float sure seems to be a financial advantage. I can't see any financial advantage to paying more, sooner.

So a rewards CC allows the LBYM'r to either live on a slightly lower 'Means', or to raise their 'Living' slightly on the same means. TAke your pick, but either choice is better. So I feel OK in saying (again, speaking strictly financially now), that it is something that they "ought to" do. Now, if they have reasons to feel they would have a problem using a CC, then fine, they should do what works for them. But I think they should recognize that they are giving up some financially power, and take that into consideration in the decision.

Let's use a non-CC analogy. Say you have a strict budget of $20 gas/week. You could say it makes no difference if you buy a car that gets 20mpg, or one that gets 30mpg, because you are only going to spend $20 regardless. But you can do more (live "higher") with a 30mpg car (on the same means), right? Or, have more opportunities to go under budget on weeks you drive less, and save that money or use it elsewhere. Either way, you got more for your money at 30mpg.

-ERD50

I think in saying "speaking strictly financially now", you have come to the crux of the matter. I agree that using float and getting cash back are financial advantages. But what if one is seeking some other sort of advantage--time, or security, or peace of mind, or any number of other possibilities? If that's the case, one isn't thinking "strictly financially" and I can see where that would result in decisions that look odd and perhaps even of questionable wisdom to somebody who is. Now me, I think I am more interested in maximizing free time and peace, than in getting the most out of every dollar. Remembering that I'm not speaking "strictly financially", why would I go to any effort to get more out of a dollar if I already have all I need without making the extra effort? Why would I use up even a few seconds of time to get something extra that I don't really want? Why would I concern myself at all about whether I paid the lowest possible price for something, when I was willing and able to pay what it cost when I needed to buy it? I might save money that way, but it would neither increase my free time nor contribute to my peace of mind, and I would rather have the time and the peace than the money. (Remember that 20% pay cut? Speaking "strictly financially", that made no sense whatsoever. Thinking in terms of "what will increase my peace of mind" it made all the sense in the world.)

To use your non-CC example, why would I bother to replace the car (which involves at least some expenditure of time and effort in the form of research, test drives, etc) if it will carry me as far as I need or want to go within my budget? I'll expend the effort to replace the car when it is no longer able to do so. And I'll probably use a broker, even though it may cost a little more, rather than negotiating for the lowest possible price at a dealership. In fact I know I will, because that's what I did do when my 27-year-old Toyota Tercel finally bit the dust.

 

[ERD50]

I think in saying "speaking strictly financially now", you have come to the crux of the matter. I agree that using float and getting cash back are financial advantages. But what if one is seeking some other sort of advantage--time, or security, or peace of mind, or any number of other possibilities? ...

I'm quite certain we are going in circles now. I broke out "strictly financially" just to be able to identify it and talk about it in isolation - yes, make the decision on the whole picture. As I've said several times, CCs offer me convenience, save time, and provide rewards & float. It's all gravy for me, there is no downside, there is nothing to "balance it against". If there are downsides for you, do what works for you.

To use your non-CC example, why would I bother to replace the car ....

What if the car was a color you don't like, or you don't have a valid driver's license, or..... ? Geez, that line has nothing to do with what I tried to illustrate with that analogy. We are going nowhere.

-ERD50

 

[ERD50]

As others have mentioned... if you are the kind who will spend more with a CC, then anything over the $125 to $500 cash back you spend.. well, then you are worse off...

Exactly - it's all quite simple really. -ERD50

 

[eridanus]

No taxes due--it's a reduction in purchase price.

Excellent, thanks.

 

[RonBoyd]

Here is an interesting analysis of banking policies:

Propaganda: How The Banking Industry Wants You To Think About Overdraft Fees

 

[clifp]

I am late to this thread (never worry like mortgage pay off threads a repeat performance is coming real soon now), so I'll touch on a benefit off credit cards (beside in my case a 2% rebate on Schwab Visa) that hasn't be brought up, disputed charges.

About 6 weeks week ago I signed up for a internet service which offered a free 7 day trial. After spending a few hours I decide it wasn't worth the $100/year and I called up to cancel the service. The European lady was very nice and canceled. When I got my credit card statement I saw the $100 charge. I called the company and they said they I need to respond to the email that I sent confirming my cancellation. I said you mean my phone call wasn't sufficient and I didn't get an email or it when into the spam filter. I offered to pay for one month service but they refused, so I said I'm disputing the charges with the CC company.

I called up Schwab and they asked all the right questions and told me they'd have a resolution in the next 6 weeks, and in the mean time I didn't need to pay the disputed charge. I have only done this twice before and both times I got my money back. I am cautiously optimistic this time.

AFAIK credit cards are the only form of payment that gives you this option, and when you are dealing with Foreign companies, really the consumers only recourse.

 

[RonBoyd]

Get ready to take another hit.

Credit card merchant fees ahead? - ColoradoBIZ Magazine

 

[samclem]

Get ready to take another hit.

Credit card merchant fees ahead? - ColoradoBIZ Magazine

I remember when many gas stations offered a discount to those paying cash (in effect, a surcharge to those paying by CC to cover these merchant fees), maybe that will return. I'd have no problem with that, the merchant should be free to pass those costs to consumers if he wants. It might encourage me to buy my gas/airline tickets, etc somewhere else if I could get it at the same price but use my CC. Or, maybe I'd go to cash/debit cards.

For some things, the extra warranty, fraud protection, and dispute resolution features of a CC would be well worth a 1.5% net fee (3% up front minus the 1.5% cash back). But I'm happier still not paying it and having those merchant fees built into the price--for everyone.

 

[ziggy29]

I remember when many gas stations offered a discount to those paying cash (in effect, a surcharge to those paying by CC to cover these merchant fees), maybe that will return. I'd have no problem with that, the merchant should be free to pass those costs to consumers if he wants. It might encourage me to buy my gas/airline tickets, etc somewhere else if I could get it at the same price but use my CC. Or, maybe I'd go to cash/debit cards.

There's a liquor store chain around these parts that gives a 5% cash discount. Needless to say, I don't go for the 2% cash back there.

 

[Texas Proud]

I am late to this thread (never worry like mortgage pay off threads a repeat performance is coming real soon now), so I'll touch on a benefit off credit cards (beside in my case a 2% rebate on Schwab Visa) that hasn't be brought up, disputed charges.

About 6 weeks week ago I signed up for a internet service which offered a free 7 day trial. After spending a few hours I decide it wasn't worth the $100/year and I called up to cancel the service. The European lady was very nice and canceled. When I got my credit card statement I saw the $100 charge. I called the company and they said they I need to respond to the email that I sent confirming my cancellation. I said you mean my phone call wasn't sufficient and I didn't get an email or it when into the spam filter. I offered to pay for one month service but they refused, so I said I'm disputing the charges with the CC company.

I called up Schwab and they asked all the right questions and told me they'd have a resolution in the next 6 weeks, and in the mean time I didn't need to pay the disputed charge. I have only done this twice before and both times I got my money back. I am cautiously optimistic this time.

AFAIK credit cards are the only form of payment that gives you this option, and when you are dealing with Foreign companies, really the consumers only recourse.

Yes... but I think it was addressed with the legal protections you have with a CC.. this is one of them.. and I have used it a few times myself over the years...

As an example... I had my car serviced... picked it up Christmas eve... they ran my CC... did not get their 'code' (this was a long time ago)... so they ran it again... still nothing.. they said 'it must not be good'... so I gave them another... still nothing... so they said they would charge it after Christmas...

Well, all charges came through... and the dealership did not want to refund me any of the money (they did not have anyone smart enough to figure this out... and deferred on the side of 'we are right since we have the money')... well, the CC took all the info... and refunded me the extra three charges..

Six months later.. the charges come back... a couple of quick calls and some heated words about how can these come back so far from the original date... they were removed for good...

With a debit card... I would be out $2,700 plus and might not get it back... since the dealership had the money, the bank would not do anything about it...

Debit 0 - CC 1

 

[growing_older]

I have occasionally had a dispute with a merchant (or in a couple cases noticed duplicate charges for a single purchase). In a some of these cases, the merchant was either too large to care or too stubborn to want to do the right thing. Since these disputes involved CC charges, I was the one in the stronger barganing position (still in posession of the money) and was able to prevail. It was pretty obvious at the time, that if the merchant had been in posession of my money they intended to keep it, regardless of the actual facts of the case.

 

[RonBoyd]

I have occasionally had a dispute with a merchant (or in a couple cases noticed duplicate charges for a single purchase). In a some of these cases, the merchant was either too large to care or too stubborn to want to do the right thing. Since these disputes involved CC charges, I was the one in the stronger barganing position (still in posession of the money) and was able to prevail. It was pretty obvious at the time, that if the merchant had been in posession of my money they intended to keep it, regardless of the actual facts of the case.

And that is no small point. One those who are considering cash or a check (including that non-traditional form -- the debit card) should keep uppermost in mind.

 

[Texas Proud]

OHH.. I remember another one....

I had bought something online many many years ago... they hit my CC account.. and then went bankrupt... all I had to do was contact the CC company and they took off the charge... quick and simple...

With a debit card... I would be in BK heck... and probably never got my money back... and it was about $500....

 

[Finance Dave]

I am late to this thread (never worry like mortgage pay off threads a repeat performance is coming real soon now), so I'll touch on a benefit off credit cards (beside in my case a 2% rebate on Schwab Visa) that hasn't be brought up, disputed charges.

About 6 weeks week ago I signed up for a internet service which offered a free 7 day trial. After spending a few hours I decide it wasn't worth the $100/year and I called up to cancel the service. The European lady was very nice and canceled. When I got my credit card statement I saw the $100 charge. I called the company and they said they I need to respond to the email that I sent confirming my cancellation. I said you mean my phone call wasn't sufficient and I didn't get an email or it when into the spam filter. I offered to pay for one month service but they refused, so I said I'm disputing the charges with the CC company.

I called up Schwab and they asked all the right questions and told me they'd have a resolution in the next 6 weeks, and in the mean time I didn't need to pay the disputed charge. I have only done this twice before and both times I got my money back. I am cautiously optimistic this time.

AFAIK credit cards are the only form of payment that gives you this option, and when you are dealing with Foreign companies, really the consumers only recourse.

I've also disputed some charges on my CC. There is "some" protection in that if the vendor cannot prove they sent you the item (in other words, if the charge is actually fraudulent), then you will not have to pay so long as you notify the CC company in a certain amount of time (details in this article - http://www.usatoday.com/money/perfi/credit/2009-01-25-consumer-credit-card-charge-disputes_N.htm )

With a debit card you have similar protection, but the notification time is extremely short.


One of my two disputes was fraudulent, and I did not have to pay. The other was legit, it's just that the vendor name on the CC statement was not one I recognized...it did not match what was on the invoice or the name on the internet from which I purchased...so I ended up gladly allowing that one to be paid.

One other note...if the vendor can prove they delivered the item...the CC company will pay them without regard for your recommendation as to whether to pay them...it's not like you have complete control. For example, let's say you ordered a blue one and they sent a yellow one. The CC company will pay them...it will be up to you to work directly with the vendor at that point.

Edit: link to the Fair Credit Reporting Act - http://www.ftc.gov/os/statutes/031224fcra.pdf

 

[Finance Dave]

per my post above...here are some relevant quotes....

"Disputes must generally be filed in writing within 60 days after the bill is sent. In certain disputes, the goods or services must cost more than $50, and the transaction must have occurred in the purchaser's home state or within 100 miles of his or her mailing address. Although state laws vary, items bought online or by phone are generally considered purchases made where you are, Feddis says."


"By law, liability for unauthorized credit card use is limited to $50, but most banks don't hold the card holder responsible for even that amount. Unlike billing-error disputes, which generally must be filed in writing, unauthorized transactions can be reported over the phone. And, there's no requirement to do so within 60 days. "

Obviously there are some twists and turns in the laws as you can see in the article...$130,000 in rugs?

 

[Texas Proud]

per my post above...here are some relevant quotes....

"Disputes must generally be filed in writing within 60 days after the bill is sent. In certain disputes, the goods or services must cost more than $50, and the transaction must have occurred in the purchaser's home state or within 100 miles of his or her mailing address. Although state laws vary, items bought online or by phone are generally considered purchases made where you are, Feddis says."


"By law, liability for unauthorized credit card use is limited to $50, but most banks don't hold the card holder responsible for even that amount. Unlike billing-error disputes, which generally must be filed in writing, unauthorized transactions can be reported over the phone. And, there's no requirement to do so within 60 days. "

Obviously there are some twists and turns in the laws as you can see in the article...$130,000 in rugs?

Yes on both your posts... you will not win if it is just a dispute between you and the merchant... ie. you bought something and it was delivered, but delivered 'broke'.... this is a dispute between you and the merchant for warranty or replacement.... but you did get what you ordered...

Both of my disputes I mentioned were not a dispute of was it what I wanted, or buyer's remorse..... one charged me 4 times, the other went BK without delivery of product...

Either way, with a debit card I would be in a worse situation than with a CC... I would be out the money NOW, hoping to get it back..