Comments on: 8 Reasons Credit Cards Beat Debit Cards

By: May

May — Fri, 31 Jul 2009 19:53:30 +0000

This sounds like a great idea. I think i might give it a try also :]

By: Joe

Joe — Thu, 23 Jul 2009 02:49:35 +0000

1. I’m not a member of a credit union.

2. When gas was $4 a gallon in CA, it was really easy to go over $50.

4. refer to answer 1.

5. The idea of missing cash out of my bank account and losing a few days of interest doesn’t excite me.

6. I’ve flown round trip to Shanghai and Seoul twice. I also stayed at a Westin hotel for 3 nights for free. That’s at least $3000 in benefits. My gas card deducts 5% of my gas bill every month. Only 1%?

7. Most people are not wealthy.

8. In addition to warranty benefits, my credit card has a loss/theft provision, which I’ve used twice. Once for a pair of sunglasses stolen at the beach and a digital camera. That’s around $500 in benefits. Which debit card offers this service?

By: Jamie

Jamie — Thu, 23 Jul 2009 01:04:25 +0000

I’ve worked in the banking industry for years, and I can tell you that even if an item isn’t paid, you will still be charged a fee just for trying to overdraw your checking account. I’ve seen it countless times where I work now: a customer tries to use their debit card, the item is returned because of NSF, but the account is still charged a $25 fee just for trying. oftentimes, the next day the merchant will try to pull it again, resulting in yet another fee. you also need to pay whatever fee the merchant charges when items come back unpaid. even if you do carry a balance on your credit card, the interest you pay each month probably wouldn’t add up to what you could be paying in fees at your bank. i use my discover card for everything and i have earned hundreds of dollars in rewards, whereas i’ve only paid a few dollars in interest on those months when money was tight and i couldn’t pay off the balance in full as i normally do. So it’s there when I need to carry a balance, but if I don’t, i don’t pay anything extra. Credit cards all the way!

By: Jim

Jim — Wed, 22 Jul 2009 16:37:12 +0000

Without a debit or credit card whatsoever?

By: Victoria

Victoria — Wed, 22 Jul 2009 16:26:32 +0000

Okay, so I found this article by chance while I was researching “How to Manage personal finances without a debit card.”

I graduated college in ‘06 and from the time I was a freshman, our bank gave every student a debit card with our college’s logo on the front.

Since then, this is the ONLY way I have ever known to really manage my money.

However, I am finding that my spending is beginning to get out of control, and I think that its hard to track because of the debit card.

So, that said. Can you PLEASE do an article on how to manage your money withOUT a debit card? I can’t find anything on the net…

By: Neil

Neil — Tue, 21 Jul 2009 17:00:40 +0000

Agreed. Interest free loans and rewards, too. Can’t go wrong.

By: emma

emma — Tue, 21 Jul 2009 16:41:02 +0000

1) You can run your debit card as credit at gas stations, so no $50 block.

2) You generally approve the amount the store is charging, so if 4.95 rings up as 495.00, you will be given a chance to catch it before approval.

3) I totally agree that renting a car on a debit card is a royal pain! I can do it, I do it often, but 50% of the time I have some hassle associated with it. Like: the company SAYS they take debit, but the individual branch or the guy behind the counter says they don’t, and 40 minutes of arguments ensue. Or: They put a $300 hold on the account that takes up to 2 weeks to clear. Etc. Huge pain.

By: Amanda

Amanda — Tue, 21 Jul 2009 16:11:22 +0000

I think for me the points are the main reason credit cards beat debit cards. Those points have paid for lots of airplane flights. To me that’s making money off of your credit card because I have business expenses I have to make so why not make them with my credit card.

By: Kimberly

Kimberly — Tue, 21 Jul 2009 14:08:15 +0000

I prefer to use debit cards for day to day purchases and to save the credit cards for online purchases and big ticket items.

By: Casey Johnson

Casey Johnson — Mon, 20 Jul 2009 19:08:52 +0000

I found a way to MAKE money with credit cards. No, I’m not nuts.

But there’s caveats on how to do this. First of all, you gotta stick to a budget. STICK to it, don’t splurge too much. Secondly, PAY THE ENTIRE bill once it comes due. If you cannot do either caveats, you’re screwed.

If you use credit cards constantly, your cash sits in your bank account longer, amassing more interest earnings. With debit cards, you eat away at your cash a bit, thus earning less interest…

The effect of this gets more dramatic the higher the interest your earn.

The low interest rates paid nowadays sure suck and I don’t earn much nowadays. But play with your average earnings and spendings, assume 5% interest rates and you will see how much indirect money credit cards actually make you.

If this is already well known, I apologize. But I have to say, I never see anybody mention this nice fact about credit cards.

- Casey

By: barbara

barbara — Mon, 20 Jul 2009 13:35:09 +0000

Just finished paying off $40K in credit card debt. My family has a credit card for emergencies, but I have never touched it. I pay cash, use my debit card or do without. I treat my debit card like a checkbook and record the transaction immediately so I don’t forget.

By: DDFD at DivorcedDadFrugalDad

DDFD at DivorcedDadFrugalDad — Mon, 20 Jul 2009 12:44:58 +0000

Great post! I was aware of most of these, but learned a thing or two. Thanks for sharing.

By: thenewlyfrugal

thenewlyfrugal — Mon, 20 Jul 2009 06:00:02 +0000

Most banks have a “courtesy overdraft limit” on your debit card, which is separate from accepting or refusing overdraft on your checking account. For example, almost all Wells Fargo debit cards come with a -$10 limit, which is just enough to get you eating about 4 overdraft fees if the purchases hit right.

So if you’re going to insist upfront that you have no overdraft, make sure your banker also turns off the amount your debit card will authorize in the negative as well. It’s still no guarantees that you won’t overdraft with your debit card (due to floating $1 charges for gas, iTunes, and a few other anomalies), but you’ll be somewhat safer.

By: thenewlyfrugal

thenewlyfrugal — Mon, 20 Jul 2009 05:52:31 +0000

You forgot another killer — if you go to a restaurant, they often hold an extra 10-20% on your card for any possible tip you may wish to write in. This also isn’t updated until the merchant batch processes their receipts, which can also take days.

I know it doesn’t sound huge, but in my past life as a customer service rep at a bank I saw it a lot.

By: kitty

kitty — Sun, 19 Jul 2009 21:40:37 +0000

This is right. Additionally, if you set up automated payment in full on credit cards, you’ll get the benefit of both: knowledge that the money will be taken from your account and extra protection and grace period that credit cards offer.