How to switch to using credit cards for spending.

[EastWest Gal]

All good tips. I also get a text message with daily credit card balances and for every charge on the cards. Do not disturb at night keeps me from being disturbed by middle of the night payments (cell phone bill and others), but I see them first thing in the morning. That daily balance reminder keeps me from spending too much. Good fraud prevention tool.

 

[RetiredHappy]

We don't use debit cards because of the risk of being skimmed. Credit card companies offer much better protection against fraudulent charges. We try to put everything on credit cards and we had some big ticket items that we put on our main credit card for the past 12 months due to our move. Besides the free Costco Citi, Amazon Chase card and a hotel brand related credit card for timeshare maintenance fee charges, I just cash out $4K from our primary use credit card from the past year spending. Pretty impressive I may say.

 

[Alan]

Here's a perfect solution: 1) Get a credit card that offers rebates. 2) Make sure to set up online login for the card, including link to your checking account. 3) Start using the credit card. Every few days, go online and pay off the current balance.
There is absolutely no requirement to wait until end of the monthly billing cycle, so you can make as many interim payments as you wish to. This can resolve your wife's concern.
BTW, as one example Chase Freedom card pays 3% rebate for restaurants and drug store purchases, 1.5% for all other purchases. So you'll get money back (as a statement credit, I believe) for an extra bonus.

I agree that this is a good solution because that is how our son moved himself off debit cards to credit cards.

 

[jazz4cash]

I won't use my CC for a bill that has a service charge with it. Most of my monthly bills I use my bank's autopay or use ACH with the vendor (i.e. electric, internet/cableTV/phone). Whichever method of payment is easy and cost-free I will use.

I used to think this way also but then I realized I could pay the fixed service fee and still get over 1.5% cashback on my credit card, so why not. Some months I will pay an additional month in advance for the same fixed service fee so the math will work. If only I could pay property taxes this way but their fee > 2%.

 

[sengsational]

Loss of "Back Pressure"

The "Just Do It" answers don't address the loss of the "back pressure" that the debit card had (oooh, balance low, don't go out to the fancy restaurant).


One possible solution would be to have a spending account that gets funded, say, monthly. That monthly amount is the comfortable amount. If, when the CC bill is due, there is a shortfall, then a "special transfer" is initiated so the CC bill can be paid. These special transfers would be reversed as soon as comfortably possible. The fact that there's an unreversed transfer can replace the bank balance as the back pressure mechanism.

 

[RetireAge50]

I guess I was thinking more along the lines of should we keep X amount extra in checking or anything along those lines. My wife is stuck on using debit as she is afraid we will not have the money to pay when the bill comes. I think it’s more psychological than anything. Hope this makes sense.

I think of the credit card balance the same way as an outstanding check. We use a simple spreadsheet to help us keep track.

 

[Act2]

Seems a conversation with your wife might be a good idea. Is there something in her history (or yours) that makes her worry the money won’t get set aside to pay the credit card bills?

 

[MJ]

My wife and I each have citibank 2% cash reward (1%+1%) and we are both authorized users to each other cards. Citibank has had a promo 1st on my card and now on hers where you only pay the minimum monthly payment with 0% interest for the balance for about 6 months then MAKE SURE to pay the full balance when due. Also be careful with government payments allowing credit card payments since they may use 3rd parties who will charge 3% to 5% fee. Finally, since I use Ally checking with overdraft, I keep 0 balance in checking which draws from my savings account so I continue to earn interest (I know it's only .5%). I will continue to do this as long as Ally continues to suspend the $10 fee for over 6 withdrawals per month.

 

[athena53]

I think of the credit card balance the same way as an outstanding check. We use a simple spreadsheet to help us keep track.

My tactic is similar- I keep my checking account log in Excel and subtract credit card charges from the balance as I make them. A simplified version would show the balance per the bank, the amounts reserved for cc charges and the difference, which is your spendable total. (I have multiple columns for designated reserves such as property taxes.) Paying the credit card bill is no sweat- I have the $$ set aside.

 

[RobbieB]

Yeah, just do it. Stop using the debit card and use the credit card.

 

[MC Rider]

Agree with RobbieB and Nike.
Just do it.

 

[freedomatlast]

Never had a debit card and never will. No need for one. I charge whatever I can on the credit card and get cash back every month. The only person I know that has a debit card is a person with a terrible credit rating that can't get a credit card. Start using the credit card for everything and have the discipline to pay it off in full every month. You'll get the advantage of cash back and much better fraud protection.

 

[rwdflynavy]

Our debit card serves one purpose, get cash out of an ATM.

We use 2-3 credit cards, currently:
USAA Amex for 2% back on groceries (our biggest credit card spend each month)
Sam's club for virtually everything else (5% on gas, 3% dining, 3% Sam's Club purchases)
Chase Sapphire Reserve for Travel (phasing this one out)

I have a monthly excel budget and pay each card off at the beginning of the month. Works great for us.

 

[Trailwalker]

This may seem like a silly question, but how do those of you without any debit card obtain cash? I live in an area where a number of merchants still don't take credit cards, taking only cash or local checks. The leading grocer only takes debit cards, local checks or cash.

 

[FLSUnFIRE]

I maintain my check register in Excel and project out through the end of the year my expected outflows with a bogey for the "usual" balance on each card (always paid with the exception of floating 0% when I can) and when the statement comes in, I update the amount of the bogey long before the due date/auto pay hits. I charge almost everything on a handful of cards to optimize cash back.


I would think debit card would be easier to screw up since the money comes out right then. If you happened to make an unexpected purchase right before an auto-draft bill hit you could potentially get dinged with an overdraft. With CC, I get 3 weeks of float from billing to the autopay hitting. I hate debit cards and only have one because my CU finally took away straight ATM cards.

 

[Bamaman]

As one who pays credit cards in full, switching all expenses to the credit card would be difficult. I only use the Visa card for car and homeowners' insurance and my wife uses it for small online purchases for the household. And when it's due, I have to scramble to come up with the cash to pay it in full.

Using a credit card for all expenses takes a lot of willpower, self control and organization. It could get away from you very easily if you're a heavy spender.

 

[target2019]

I am wondering if anyone has any tips for converting from using a mix of debit card and credit to all credit cards for spending. Right now most spending goes on debit with gas, ordering food, ordering online going on credit. Would like to consolidate all on credit for the various often mentioned benefits. Obviously all cards will be paid off each month and we have no debt.
Thanks.

I guess I was thinking more along the lines of should we keep X amount extra in checking or anything along those lines. My wife is stuck on using debit as she is afraid we will not have the money to pay when the bill comes. I think it’s more psychological than anything. Hope this makes sense.

What she does makes sense if your only goal is to never over-draw. But it makes tracking and reporting more difficult, IMO.

We have two checking accounts, and two paychecks for many years. The problem I have is in deciphering what $2,000 on a credit card actually consists of. It took a long time, but we now have one or two categories of spending on particular cards.

If you have all expense payments in Excel or Quciken, take a monthly average and double that (or more) for a minimum checking balance.

 

[jazz4cash]

This may seem like a silly question, but how do those of you without any debit card obtain cash? I live in an area where a number of merchants still don't take credit cards, taking only cash or local checks. The leading grocer only takes debit cards, local checks or cash.

My bank has ATM cards and an app with an ATM withdrawal feature. I’ve used it a few times when I forgot my wallet. I do have a debit card but I never use it.

 

[carnivalday]

Since I retired, I switched my entire monthly budget to a credit card. I put all my monthly payments on it monthly, and then use the card for any purchases, such as groceries, gas, eating out. That makes it extremely easy for me to monitor how much Im spending each month, and when my SS check is deposited, I just pay off the card. If I spent more than my SS payment covers, I transfer from my brokerage account to cover the shortfall. Makes my life really easy. I can't remember the last time Ive ever touched a dollar bill, my entire economic life is electronic.

 

[Trailwalker]

My bank has ATM cards and an app with an ATM withdrawal feature. I’ve used it a few times when I forgot my wallet. I do have a debit card but I never use it.

That makes sense and also seems like nice app feature. My bank doesn't offer an ATM card that is separate from a debit card. It might be time for me to look around for a different local bank. I do like having a local bank for things like safety deposit boxes, notary use, etc.

 

[Texas Proud]

This may seem like a silly question, but how do those of you without any debit card obtain cash? I live in an area where a number of merchants still don't take credit cards, taking only cash or local checks. The leading grocer only takes debit cards, local checks or cash.

I have an ATM only card... yes, you can still get one.... just have to ask...


There is NO incentive to the bank to give you one so they do not even give you the option... if you do not ask you would never know it was available...

 

[TheWizard]

OP et Ux are concerned about how to pay for bills incurred from using credit cards.
The ease of using credit cards allows one spend more than you presently have in your checking account, unlike the debit cards they have been using.

Therefore, do what I do: pay off your CC *balances* in full each time you have a payday, weekly, biweekly or monthly.
In my case, I zero out my balances twice a month.
The amount on my monthly bill for my two CC's is not especially relevant...

 

[brett]

I do not understand the issue. This is hardly rocket science.

 

[11522914]

This may seem like a silly question, but how do those of you without any debit card obtain cash? I live in an area where a number of merchants still don't take credit cards, taking only cash or local checks. The leading grocer only takes debit cards, local checks or cash.

My bank has a debit/ATM card. It has a unlock/lock feature. When I need cash - extremely rare - I unlock it using my phone, get the cash and lock it back up.

I use credit cards for any expense that accepts them without any additional fees.

 

[Trailwalker]

Another very nice feature.

I'm hoping the OP is already on the way to receiving cash rewards and enjoying the increased security of a credit card vs. a debit/atm card. My very fiscally conservative parents thought credit cards were an evil temptation until they discovered the free float and ability to pay off the account each month without paying any interest. The cash back cards make it very easy to choose credit over debit.