Comments on: The Basics of Debit and Credit Cards Explained

By: Jim

Jim — Sun, 08 Feb 2009 15:47:36 +0000

Hi Aignap, I suggest that people set up billpay, not autopay, I think the flexibility is worth it.

By: Aignap

Aignap — Sun, 08 Feb 2009 06:31:01 +0000

Jim – great post, you definitely covered a lot of the basics. There is a point where I disagree with you on – setting up auto bill-pay.

I worked in retail banking for five years and seen enough damage to keep away from setting up any type of auto-pay. Even before I learned the ins/outs of banking, I was skeptic of auto-type transactions. I learned quickly there’s an expensive price tag for convenience.

My two points against auto-pay:

1) $.42 for mailing a payment is a whole lot less compared to a bank’s $33-35 NSF per item fee if you overdraw (there is a cap on NSFs in one business day, I believe 5-6 items.) This is where banks make their money. Many big banks clear bigger items before smaller ones. This is expensive especially if you have 2-3 small auto-pays and your ONE big rent/mortgage pymt. Instead of one NSF fee for the rent/mortgage, it’s three.

2) My personal preference is to send in payment instead. Knock on wood, but I have never had a payment lost or stolen. I am more concerned with identity fraud committed online vs US mail. But, I have seen both.

By: AmericasChoice

AmericasChoice — Tue, 20 Jan 2009 19:50:38 +0000

This was really a great post, and this blog is really boosting my knowledge in the financial industry which is a great help as I run several credit websites, making it very important to get all the up to date finance info I can. Good luck to everyone in the new year.

As a consumer myself, i also have to say the Online Bill Pay is the best way to go.

P.S. I definitely recommend subscribing to this blog’s feeds, they are a wealth of information.

By: Patrick

Patrick — Tue, 20 Jan 2009 17:12:39 +0000

I’m with you on the fact that I rarely use my debit card anymore. It just doesn’t make sense when I pay my credit card balance every month, get rewards for my purchases and more protection than a debit card.

By: thomas

thomas — Tue, 20 Jan 2009 03:38:59 +0000

Excellent series on credit cards. Very good roundup of the plastic demon (in some people’s eyes).

By: Eric N.

Eric N. — Tue, 20 Jan 2009 01:17:28 +0000

Woops…I just realized I was talking about auto-payments. I meant to say I do set up online billpay; I just haven’t set it to automatic yet.

By: Eric N.

Eric N. — Tue, 20 Jan 2009 00:58:28 +0000

Good info! I still haven’t gotten around to setting up online billpay. At first I wanted to force myself to manually log in and pay each month so that I can review my transactions and just to be on top of things. Now I think I’ve gotten past that point and can put it on auto pilot.

By: SimplyForties

SimplyForties — Mon, 19 Jan 2009 23:48:50 +0000

Thanks for another good article on the basics. I’m sending these to my son, who I hope is reading them!

By: John

John — Mon, 19 Jan 2009 23:16:58 +0000

Not mention in your post, something to watch for in the event you charge over your limit. Pay the fee, and close attention.
The next required payment amount may be only the amount to reduce the balance to your limit.
or sometime the amount is least.
Example, I went over by about $120 (paid the price, i.e. overlimit fee) On the statement the minium payment was $ 26.
If my next payment was $ 26, there would be another overlimit fee in the next cycle.

Another item to paid attention, most of my cards
do not decline charges which exceed the credit limit.

By: Mrs. Accountability

Mrs. Accountability — Mon, 19 Jan 2009 20:15:37 +0000

Wow, this is great! I even learned something – I always kind of equated “charge” cards with “credit” cards, having never really stopped to think about the difference in terms there. I’m sending my 19yo the link, very informative!

By: nickel

nickel — Mon, 19 Jan 2009 19:48:49 +0000

And if you don’t have any friends, send it to your enemies!

By: elementaryfinance

elementaryfinance — Mon, 19 Jan 2009 19:39:02 +0000

This is a great article! I was thinking of putting together a credit card series on my blog as well. I may just link to you. Very well done!

By: jim

jim — Mon, 19 Jan 2009 15:07:29 +0000

Send it to all of your friends!

And please let me know if I missed anything.

By: Miranda

Miranda — Mon, 19 Jan 2009 14:57:47 +0000

Thanks for taking the time to put together this exhaustive explanation of credit cards and debt! It’s very informative — something everyone should read before applying for a credit card.