Hotel discourages use of debit cards

[disneysteve]

I ought to send this to Dave Ramsey and see what he says.

I just booked a trip online and when making the reservation, got this message:

"The XXXX XXXXX Inn discourages the use of debit cards, and kindly asks that if another method of payment is not an inconvenience, 
it be used to reserve your guest room."

I'm curious why they say that. I suppose it has something to do with people giving a debit card number on an account that has no money in it, or not enough to cover the bill. Has anyone else ever encountered this?

[Like2Plan]

Originally Posted by disneysteve

I ought to send this to Dave Ramsey and see what he says.

I just booked a trip online and when making the reservation, got this message:

"The XXXX XXXXX Inn discourages the use of debit cards, and kindly asks that if another method of payment is not an inconvenience, 
it be used to reserve your guest room."

I'm curious why they say that. I suppose it has something to do with people giving a debit card number on an account that has no money in it, or not enough to cover the bill. Has anyone else ever encountered this?

I saw a similar sign at Holiday Inn. They went on to explain that they preauthorize a higher amount at check in for incidental and so on. If your debit card doesn't have enough to preauthorize it ends up with an overdraft. I believe what they were advocating was use a CC to reserve and at check in and then use the debit card when you settle your bill when you check out.

[disneysteve]

That makes sense. Again, this goes directly against what DR teaches. I know his response would be to just not do business at places with this policy, but if this becomes the norm, then what will he say - don't stay in hotels?

[snafu]

These 'holds' more than the sum of the reservation, when added to airfare has the potential to cause someone to inadvertently go over their credit limit when travel is booked several months in advance.

[bjl584]

Originally Posted by disneysteve

That makes sense. Again, this goes directly against what DR teaches. I know his response would be to just not do business at places with this policy, but if this becomes the norm, then what will he say - don't stay in hotels?

I have read one of DR's books, but I rarely catch his radio or tv show. Is he completely agaist the use of Credit Cards even for responsible people that pay the bill in full every month?

[maynard]

Ive seen that notice too. I still use my debit card and the "held" money is usually back in my account in a day or two. I could easily see how some people might get overdrawn so its good they tell you up front.

If a hotel ever told me i couldnt use a debit card, id be back in the car looking for a different hotel

[disneysteve]

Originally Posted by bjl584

I have read one of DR's books, but I rarely catch his radio or tv show. Is he completely agaist the use of Credit Cards even for responsible people that pay the bill in full every month?

Yes. He opposes the use of CCs completely. He believes nobody should ever use them for anything. He doesn't use one. His website doesn't accept them for payment when ordering his books or signing up for his classes. No credit cards at all ever.

That's one of the things with which I don't agree with him.

[kork13]

I guess I'm just a very amiable person, but I don't really see that sort of notice as a bad, discourteous, or inconvenient thing at all. It's merely a request, or a recommendation. They'll still accept a debit card, they just recommend against it (as mentioned, probably due to the pre-authorization). If the hold were to bottom out the account, the card may be declined (remember the new law that requires an 'opt-in' to overdraft?), which causes problems for the hotel, the customer, and so on.

The other possible explanation could be in the higher transaction fees associated with debit card transactions--I believe Visa/MC credit cards charge between 1-2%, whereas debit cards frequently charge 3-4% (due to added fees from the issuing bank).

[disneysteve]

Originally Posted by kork13

I guess I'm just a very amiable person, but I don't really see that sort of notice as a bad, discourteous, or inconvenient thing at all. It's merely a request, or a recommendation. They'll still accept a debit card, they just recommend against it (as mentioned, probably due to the pre-authorization). If the hold were to bottom out the account, the card may be declined (remember the new law that requires an 'opt-in' to overdraft?), which causes problems for the hotel, the customer, and so on.

The other possible explanation could be in the higher transaction fees associated with debit card transactions--I believe Visa/MC credit cards charge between 1-2%, whereas debit cards frequently charge 3-4% (due to added fees from the issuing bank).

Oh, I don't think it is a bad thing. It was just the first time I had encountered such a notice.

I believe you are backwards on the fees, though. Debit cards have lower merchant fees. I know that because we have recently been looking into accepting credit cards at our synagogue and we've been reviewing the fee structures. So I don't think it is about the fees but rather about the overdrafts.

[kork13]

Originally Posted by disneysteve

I believe you are backwards on the fees, though. Debit cards have lower merchant fees. I know that because we have recently been looking into accepting credit cards at our synagogue and we've been reviewing the fee structures. So I don't think it is about the fees but rather about the overdrafts.

hmmmm... maybe so. Much preferring my credit cards' rewards, I never use my debit card anyway (except at the ATM), so I'm no authority on them!

[bjl584]

Originally Posted by disneysteve

Yes. He opposes the use of CCs completely. He believes nobody should ever use them for anything. He doesn't use one. His website doesn't accept them for payment when ordering his books or signing up for his classes. No credit cards at all ever.

That's one of the things with which I don't agree with him.

I disagree with him on this point as well. I need a CC whenever I travel for work to reserve my airline ticket, for my hotel, for my rental car, and for all my meals. Theoretically, I could use my debit card or cash, but my employer reimburses me for all purchases once I return from my trips. It usually takes a week or two to get my reimburement check. It would take a big chunck out of my checking account if I were to pay for everything up front and then wait for my employer to reimburse me. I'm far better off putting everything on my CC and then paying the bill in full when it arrives.

From what I know about DR, he seems to focus on debt reduction as a top priority. He doesn't engage in much investment advice such as making money off of the CC companies by taking advantage of points or cash back programs.

[wrk4lvg]

I book my hotels online and use my debit card without issue, FWIW.

[ActYourWage]

Originally Posted by disneysteve

I suppose it has something to do with people giving a debit card number on an account that has no money in it, or not enough to cover the bill.

That's probably the answer. However, that is interesting. I wander if this may be something that happens more and more in the future.

I have, so far, been able to book all my hotels, etc. with my debit card.

One reason I believe DR is so against CC, is HIS bad experiences with them. This is a go/no go situation with him with no middle ground. DR deals a lot with the psychological side of finances and I believe his experiences with credit card collections have created this stance he takes against them.

I am not saying he is right or wrong, but that is one reason I think he is so against them.

[JoshuaHeckathorn]

Originally Posted by disneysteve

His website doesn't accept them for payment when ordering his books or signing up for his classes. No credit cards at all ever.

I've always found it interesting that DR's site accepts debit cards (Visa/MasterCard) for payment, and then they also say you could use a credit card too, even though they ask you not to. So, he says he doesn't accept credit cards, but then he says there's no way for them to control what you use.

Wouldn't it be interesting to know how many people actually buy his stuff on a credit card?

[cjscully]

With the new overdraft opt-in rules, I'd guess that hotels are beginning to have problems with their pre-authorization practices. I tend to book and pay for hotels online and have frequently done so with a debit card. Then at check-in I'm asked for a card to cover room "incidentals". I'm sure they pre-authorize a certain amount even then. With the new rules regarding debit card overdrafts, this may be causing hotels problems in terms of customer service. I can just hear the "You screwed up my checking account" phone calls or front desk complaints...

[disneysteve]

Originally Posted by JoshuaHeckathorn

Wouldn't it be interesting to know how many people actually buy his stuff on a credit card?

I'd say the answer is zero. He has said multiple times that the website does not accept credit cards. He has aired calls from people praising him for not taking credit cards. He has read e-mails from people upset that they were not able to use their credit card to make a purchase at the website.

What gave you the impression that his site does actually accept credit cards?

[jpg7n16]

Originally Posted by disneysteve

What gave you the impression that his site does actually accept credit cards?

His site admits that it's impossible to tell. See in blue.

From: http://www.daveramsey.com/store/faq/...ebitcardpolicy

Debit Card Policy

We understand what is running through your mind right now. "I can't believe Dave Ramsey is accepting credit cards! This can't be true! He's sold out on his principles!" But before you shave your head and run outside on your front lawn screaming, "The world is coming to an end, save yourself!" let's clear up a few things:

Number 1 - We are NOT accepting credit cards! Never have and never will. I mean, come on, do you listen to the radio show at all? Have you ever heard of a plasectomy? Please understand that accepting credit cards is something that will NEVER happen as long as Dave is still alive (and even forever after that!)

Number 2 - We are accepting DEBIT cards. We know that some people will go nuts when they hear that, but one factor is being overlooked. Debit cards do not work unless there is CASH available.

Number 3 - It was time for us to align our company policy with the advice we give our listeners. Dave recommends the use of debit cards for several items such as, Car Rentals, Hotel Reservations, and Internet Purchases. Dave personally carries and uses debit cards for online and phone transactions. One day we realized, "Hey, we are telling people that it's okay to use debit cards for purchases, but we're not allowing people to do that with us."

So don't worry! The Titanic is not rising, the sky is not falling and Ed McMahon is still not coming to your front door. We understand that some people will get upset over this decision. We also understand that some people will say we are selling out. However, all we are doing is simply aligning ourselves with the advice we give America.

DEBIT means CASH. CREDIT means CREDIT - and honey, we don't do that around here!

* The Lampo Group, Inc. and Dave Ramsey recognize that the Visa and MasterCard virtual monopoly on the debit card industries prohibits merchants from only taking debit cards. As such, it is impossible for us to ensure that every order has complied with our debit card policy. We trust that all of our customers hold EXCEEDINGLY high levels of INTEGRITY and maintain EXTRAORDINARILY high standards of TRUTH and HONESTY. Basically, anyone ordering from us who does not follow this policy is a shady and dishonest character. Don't put yourself in this group. You're better than that. Stick to our policy, NO CREDIT CARDS, and make us all happy.

[JoshuaHeckathorn]

Originally Posted by disneysteve

I'd say the answer is zero. He has said multiple times that the website does not accept credit cards. He has aired calls from people praising him for not taking credit cards. He has read e-mails from people upset that they were not able to use their credit card to make a purchase at the website.

What gave you the impression that his site does actually accept credit cards?

DR has the following in fine print on his site under "Debit Card Policy":

* The Lampo Group, Inc. and Dave Ramsey recognize that the Visa and MasterCard virtual monopoly on the debit card industries prohibits merchants from only taking debit cards. As such, it is impossible for us to ensure that every order has complied with our debit card policy. We trust that all of our customers hold EXCEEDINGLY high levels of INTEGRITY and maintain EXTRAORDINARILY high standards of TRUTH and HONESTY. Basically, anyone ordering from us who does not follow this policy is a shady and dishonest character. Don't put yourself in this group. You're better than that. Stick to our policy, NO CREDIT CARDS, and make us all happy.

So, basically he hopes you don't use a credit card, but that doesn't mean he won't sell you a book if you're a "shady and dishonest" character and use one.

[disneysteve]

Very interesting. So it is impossible for him to not accept credit cards. I apologize. I didn't know that.

I still disagree with the whole policy, but it is his right to run his business any way he chooses.

[jpg7n16]

Yet by the same logic, it is impossible for those hotels to know if it was a debit or credit card used at check out