Debit vs. Credit Cards

[Skagit]

But what is that protection? Most debit cards have some kind of protection but if someone gets ahold of your card and PIN and spends/withdraws funds from your account - your account is slammed shut and you have no access to even the funds remaining in the account until the bank gets things sorted out which is normally about a week. So what do you eat or fill your car with that week.

When it is a debit card and they have your money you may or may not give it back. If it is a fraudulent charge on a CC you have not paid for it and can dispute it with the help of the CC company instead of fighting your own bank.

As someone who's debit card number has been stolen 3 times, this is not true. If you report a fraud charge they lock the card, not the account. You can go to the bank and get a new card made the same day. I know this because I had to do it 3 times last year. Someone within the banking system was skimming new card numbers as they were assigned. It does take a week or so to get your missing funds back but it's not really that big an issue because the bank will flag and put a hold on any large fraudulent charges anyway. They're really good at catching those, it's the $50-$100 charges that the computer system misses.

 

[Skagit]

I think maybe you are confused about what he was saying. Using the card rather than paying cash or using a different card made him $500. He never said he was spending on things he wasn't buying anyway.

As for ARMs, they are a tool that can be effective if used correctly. Tractors are great when used effectively, deadly if used carelessly. I see the ARM the same way.

You're right I misread it, sorry Hay Dude!

As to the ARMs I stand by my opinion, those are terrible and I can't believe anyone recommends those. Do a fixed rate mortgage and if rates go down refinance.

 

[Streetcar]

As I mentioned before, we have fraud protection on the debit card. It's been activated a few times in the past. Never took more than a business day to clear up, shut down the card, and get us a new one.

Is that with small local bank or credit union. For large bank headquartered here three days is good turn around for new card

 

[Torvy]

As to the ARMs I stand by my opinion, those are terrible and I can't believe anyone recommends those. Do a fixed rate mortgage and if rates go down refinance.

How are they terrible? An ARM often carries a lower rate initially than a conventional mortgage. That means for someone with new or messy credit they can get a less expensive loan while they build their credit. Sure, if you can qualify for a 30 year fixed up front and the same rate, then do that. When we did our first mortgage, we would have had over $50 a month higher payment for the first five years...60x50=$3000 more cost. BUT, you are betting that rates will go down after 5 years and/or your credit will improve. If you are financially irresponsible, stay away from all credit. If you are young and responsible, an ARM can be better than a conventional.

 

[Shenandoah MF1760]

two months later the polaris GM called and explained they have never had anyone do that and the finance guy did not think of the CC processing fee. He asked if I would pay it. Now, I don't want to beat up the guys that service my stuff, so I said I would stop in. We agreed that I would pay the fee, and they would give free maintenance on the new rzr for life (labor only).

Interesting. I did an impulse buy at the Honda dealership.

My wife saw the only Passport on the lot and said she liked it. We desperately needed a new vehicle and getting her to accept my choices is never easy. I had nothing really to object to with it so I said: "Buy it!".

Now when the finance guy asked for a downpayment of $10K, I asked if he took Amex. He didn't even blink, ran the card, called our credit union and my wife has a car she likes and I don't mind.

The interesting part is that Amex is known for charging ~ half a percent more to process than most other cards so that had to have cost them ~ $300.00. They've never called to complain, although if I could get lifetime labor for $300.00 I'd jump at the chance.

 

[Shenandoah MF1760]

Debit cards are starting to have similar protections as credit cards. Although when I travel I have an app that allows my Visa provider to know where I am so that charges will be authorized - this was handy in Tobolsk, Russia. I'm not aware of any debit cards that do that yet.

But one thing debit cards don't do is help with your credit rating.

I've been to places where they wouldn't take cash (please, no arguments about legal tender) as they were connected to the internet and that put money into their accounts almost immediately. I've also been to places that didn't take credit. Usually, rural places with little to no connectivity, and are unable to verify your card balance.

Some gas stations give a discount for cash, but what they really want is for you to either apply for their credit card or buy a gift card that they consider the same as cash (and that they hope you'll lose). And some stations discount their fuel if you use their card.

Some places won't take one card or another. I've had my Visa and Amex refused because they only took MC.

There was a time (~ 40 years ago) when interest on credit card debt was deductible from your income taxes, and inflation was so bad that buying on credit made sense because the price of what you bought you paid back at a lesser amount. It was when inflation went away and Reagan killed off that deduction that folks found themselves wallowing in debt.

Currently, I have a Visa, MC, and an Amex. All three are paid off monthly. My only debt is an auto payment, which I'd pay off if my investments weren't making more than the loan interest.

Bottom line: You need a good credit rating unless you have massive piles of cash, the deck is always stacked against you, and they are always inventing new ways to cheat you.

Be careful out there.

 

[Hay Dude]

So you spent $3000 to save $500? Your financial math is, iffy Don't I remember you recommending adjustable rate mortgages or was that someone else?

I spent $3,000 on the credit card, that I was required to spend anyway, so why not buy something for $3,000, but only be charged $2,500?
You pickin up what I’m putting down?

 

[Sigarms]

Guys, I'll be the first to admit I can derail a thread, but I think it would be wise not to derail it into politics. I think it's a rule we can all live with...

 

[Joel/ak]

Fine by me....bad habit I got...my bad

 

[Jstpssng]

The first time that my debit card was shut off I had no credit cards. I was trying to pick my snow sled up after being serviced and my card suddenly wouldn't work. I called the CU just as they were trying to close and they turned my card on long enough to get my sled back. They also advised me to order checks because there'd been a massive data breach, and all accounts would have to have new cards issued.

 

[jigs_n_fixtures]

I’ve had my debit card compromised once: I check balances every day when I get to the house and on my Wi-Fi network.

Went on, and there were two transactions I hadn’t made for $450 and $1250.

Looked up the companies which had made the charges. One specialized in selling phone cards to jail inmates, and owned the card accepting telephones. The otther leased and serviced ankle monitors.

The phone guys had a 1-800 number so I called them, and they wouldn’t give me much information beyond where they sold it. A Parrish in Louisiana. So, I looked up the Sheriff’s Office for the Parrish, and gave them a call. The gal who answered the phone was very helpful, and asked me what I did know. Which was the last four digits of the phone card.

Using that she could look up who bought it, “That damned Bill”. And, from that name she could identify where the ankle monitor was. She told me, “We know right where he is, and we’ll go get him. Have the security team at you bank call us, and reference case ###.

I had the funds back in three days.

 

[Jstpssng]

I’ve had my debit card compromised once: I check balances every day when I get to the house and on my Wi-Fi network.

Went on, and there were two transactions I hadn’t made for $450 and $1250.

Looked up the companies which had made the charges. One specialized in selling phone cards to jail inmates, and owned the card accepting telephones. The otther leased and serviced ankle monitors.

The phone guys had a 1-800 number so I called them, and they wouldn’t give me much information beyond where they sold it. A Parrish in Louisiana. So, I looked up the Sheriff’s Office for the Parrish, and gave them a call. The gal who answered the phone was very helpful, and asked me what I did know. Which was the last four digits of the phone card.

Using that she could look up who bought it, “That damned Bill”. And, from that name she could identify where the ankle monitor was. She told me, “We know right where he is, and we’ll go get him. Have the security team at you bank call us, and reference case ###.

I had the funds back in three days.

That's why I don't have a debit card associated with my main checking account. I don't keep that much of a balance on hand, and there would have been some overdraft charges, as well as late fees from the payments which didn't go through.

 

[KennyG]

You're right I misread it, sorry Hay Dude!

As to the ARMs I stand by my opinion, those are terrible and I can't believe anyone recommends those. Do a fixed rate mortgage and if rates go down refinance.

For most people, an ARM isn't the best choice, but sometimes it is. It's a matter of risk tolerance. I took out a ARM when I bought a Condo about 10 years ago. I didn't really expect to keep it this long, but I have and the rates went down a number of times before just starting to go back up. If it goes up more than I'm comfortable with, I have plenty of money in fixed return investments to pay off the loan.

 

[Sigarms]

Got to admit I'm more than happy with my credit union credit card for security.

I can think of 3 times over the years they gave me a call asking me about a transaction that they thought was suspicious (generally in areas overseas where I don't frequent). They told me not to worry about it. Only hassle was I had to wait for a new card.

When I was young and out of college going to a job interview in Baltimore, I took cash with me to stay at a decent hotel. Having ONLY cash and no credit card was really a pain in the butt (and this was back in the early 90's). Reality is we live in a electronic age.

 

[Sigarms]

But one thing debit cards don't do is help with your credit rating.

I would love someone explain to me the algorithm they use for your credit rating.

I use to have a 849 Fica score. I'm down to a 775 now and have I have no clue as to why.

 

[LD1]

I would love someone explain to me the algorithm they use for your credit rating.

I use to have a 849 Fica score. I'm down to a 775 now and have I have no clue as to why.

Sometimes lack of credit effects your rating.

If you don't have a mortgage.....may look worse than. Having a 500k mortgage that you only owe 10k on.

The first.....they have no idea if you have zero equity in anything, or have 5 million in assets paid. The latter, they at least know you have $490k in equity

 

[Jstpssng]

I would love someone explain to me the algorithm they use for your credit rating.

I use to have a 849 Fica score. I'm down to a 775 now and have I have no clue as to why.

The only time that number could matter is if you want to take out a loan. I could be wrong but at the point you are in your life; if your loan officer can't give you the best rate despite what the number says, it might be time to find a new bank. JMHO...