Debit, Credit or Cash

[Mulligan]

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]

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]

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]

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]

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]

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]

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.

 

[happy2bretired]

Thank you...that's reassuring. But...I've not signed up for anything with Target.

 

[Sarpy]

We charge almost everything to either mileage or cash-back rewards credit cards, and have done so for many years. (I got started on these in my early career when I traveled a lot for work.)

Rarely write checks and haven't balanced a checkbook in ages. I do check my online accounts about once a week, but I have a buffer and a good sense of whether or not I'm exceeding 'normal' expenditures. We also use Quicken for monthly recording and tracking purposes and CU bill pay.

But I also use a debit card for occasional ATM withdrawals. We used to use ATMs for cash conversions when traveling outside the US, but won't do that again, unless we go into a local bank. Six months after returning from MX several years ago, had my checking, savings and line of credit swiped to the tune of $8k before it was noticed (by me) just a day or two after it started. Luckily, the CU reimbursed all the stolen money. (The rigged ATM was connected to the front of a convenience store in a busy tourist area.)

 

[rminor]

For many years we've used the highest cash back cards fo just about everything. We write down every transaction in our checkbook register like it was a check. That way we know exactly how much we're spending and when the bill is paid in full each month there are no surprises. Since all of the charges are subtracted when we write them in it's easy to pay the full amount. I also use mint.com to check every card daily and dashlane.com to make and remember strong passwords.

 

[Pleeplus]

You can put me in the club of using CC for all purchases and we keep track of our spending using the Mint App. For me it is less about the security than it is about getting rewards for my normal spending habits. As others have commented in this post it has become a game to see what we can get with points. So far this year we have used points for free flights to Florida and book a hotel in DC for a 3 day family get-away. We are currently banking points for flights in 2015 to visit my brother's family in Germany.

 

[splitwdw]

Mainly use cc for online purchases and travel. Have used occasionally for car purchase (at auction) or emergency purchases. Paid in full monthly. I can also say that but carry a balance.......how would Internetland know the difference. I know many people that don't pay in full monthly. Any rewards on cc are used against the balance. I have a set amount of cash for weekly expenses and that's it. I usually have a little cash left over that goes into a fund for gifts, parties, metal (for one of my hobbies).

 

[MBSC]

I also use a rewards credit card for as many of my purchases as possible. These are purchases I am going to make anyway, so why not get a little something back in the process. I pay the balance in full each month to avoid interest charges. The credit card also extends the warranty on certain purchases. If a transaction goes awry, my bank account will not be drained. It'll be up to the credit card company and merchant to straighten it out. I only use the debit/ATM card to make cash withdrawals at a no fee ATM. I usually only have to use the ATM 3-4 times a year.

 

[Nemo2]

I know many people that don't pay in full monthly. Any rewards on cc are used against the balance.

Any interest payable would far outweigh rewards accumulated.........(I learned, long ago, that "Interest is something you earn, not something you pay".)

 

[LinCella]

I bank online but use cash or debit for everything. I got into trouble with credit cards before and I'm not strong enough not to use them for unnecessary purchases that will take me five years to pay back and cost three times as much. I know my personality.

 

[Walt34]

I got into trouble with credit cards before and I'm not strong enough not to use them for unnecessary purchases that will take me five years to pay back and cost three times as much. I know my personality.

A wise man knows his limitations:

Eastwood- A Man's Got to Know his Limitations - YouTube

 

[pb4uski]

I also use a rewards credit card for as many of my purchases as possible. These are purchases I am going to make anyway, so why not get a little something back in the process. I pay the balance in full each month to avoid interest charges. The credit card also extends the warranty on certain purchases. If a transaction goes awry, my bank account will not be drained. It'll be up to the credit card company and merchant to straighten it out. I only use the debit/ATM card to make cash withdrawals at a no fee ATM. I usually only have to use the ATM 3-4 times a year.

I got $600 back from Discover last year for refrigerator repairs under their extended warranty program. Sweet!!!

 

[mystang52]

Years ago I applied for an Amazon credit card just so I could get $50 off the running shoes I was buying. They gave me a huge limit (either $30,000 or $40,000 limit, can't remember for sure). Shortly thereafter, they sent me an offer to use a check advance for no interest for 6 months, and no transaction fee.
I triple checked the fine print, wrote a check for cash for my full credit limit, deposited it in ING, and earned a hefty free interest before paying back in full before the 6 months were up. Never saw a no-transaction fee offer since then.

 

[misty57]

With all the security breaches lately, we have gone to mostly cash. I still use a cash back rewards credit card to pay our utilities, but that's about it these days.

 

[6miths]

Charge everything to one cash back card.

 

[Dcharles]

I was hacked after the Target mess with charges being made in Moscow, Russia. I had to cancel the card ASAP the day before our long planned for two week vacation. Thank God I kept my old Chase card for. backup. I am becoming more Leary about credit card transactions. I am thinking about going to cash.

 

[Greencheese]

I charge everything I can. When you can get 1-6% on every purchase you make why wouldn't you charge to a card? Plus with so much competition between the companies I've never had an issue disputing a charge or dealing with fraud. 1 quick phone call and I'm all good to go!