Debit Cards Versus Credit Cards

[marglo]

Maybe this has been discussed here but I was wondering about the differences between using debit cards and credit cards. I have a debt card but have rarely used it. For a long time we used credit cards for most everything to rack up the miles and more recently the cash rebates paying off the card every month. Currently we are using cash for most things but do put a few things on a credit card and still pay them off every month. We also have several auto payments which are paid by credit card. Now that we are mostly on cash for our day-to-day spending, I am wondering about debit cards. Somehow they seem more risky to me, so I'm a little leery about using them esp online. I'd like to hear your thoughts on this.

[jmjj215]

I used to be 100% debit card. We've since moved to a credit card that gives us one percent cash back - the equivalent of one month's groceries for us.

[Snoopy2645]

I use a cc for about everything because of the rewards and the protection I havent paid an interest charge in along time though so I geuss I do good at paying them off every month too geuss that is key you know

[34saving]

If you're paying off your CCs every month I see NO reason to switch to a debit card. You lose the rewards, the grace period, and sometimes some security. Why would you want to do that?

[meaghanchan]

Even though I pay it off every month, I've stopped using a credit card except for internet purchases (don't know if I'm right, but I feel like it gives me more security online). I don't like seeing a certain amount of money in my account, and knowing that I have less than that, but not knowing exactly how much. Though I keep track of all my spending, I don't write down what I pay cash for, what I put on the debit card, and what I put on a credit card. Then I'm always surprised when I get the bill. If I keep it to one purchase a month, it's fine- I spend $200 on plane tickets, I get a $200 credit card bill, I'm not surprised. But when I use it for little things throughout the month... I get a $500 bill and whine when it comes time to write a check that big. It's too tempting just to pay the minimum!

[crosses]

Don't debit cards have less protection if they are stolen or misused?

[jmjj215]

Originally Posted by crosses

Don't debit cards have less protection if they are stolen or misused?

Nope. At least not w/ Wells Fargo.

[jmjj215]

CCs do come in handy if you have a dispute about a charge though (non-crime related). I guess "misused" could be something other than criminal.

[CRFSaver]

I believe you are only liable for 50 dollars from fraud including in your bank account...

[tamip]

I just can't trust myself with cc yet, to pay it off every month. So, I just use cash or the debit. If we travel, I'd be more apt to use the cc for protection- but only if we have the money saved already. (we don't travel much)

[cercis]

Originally Posted by CRFSaver

I believe you are only liable for 50 dollars from fraud including in your bank account...

This is true for most banks. But you have to ask. And while you're doing that, ask how long it will take to refund disputed funds.

Also, be prepared for large holds when you rent a hotel room or car. They will often place a hold that is double the amount they quote as the charge. They will only charge the correct amount and remove the hold when you check out/return the car, but in the meantime, you have money tied up there. That means you might bounce some checks if you don't have a large enough cushion.

[CRFSaver]

I always use a charge card for car rentals and hotels. Main reason I got an AMEX card was because you have to pay it off every month.

I believe the $50 dollars is govt mandated... Not sure though...

[jmjj215]

Originally Posted by tamip

I just can't trust myself with cc yet, to pay it off every month. So, I just use cash or the debit. If we travel, I'd be more apt to use the cc for protection- but only if we have the money saved already. (we don't travel much)

tamip. This is a great approach to take. You find out where you stand w/ CCs and run w/ it.

[cercis]

Originally Posted by CRFSaver

I believe the $50 dollars is govt mandated... Not sure though...

That could be. It wasn't as of 2 or so years ago, but I don't use a debit card so I don't keep up with it.

[PRICEPLUS]

I use a credit card to extend warranties, provide some protection if the goods or services are shoddy, and in cases where carrying a large amount of cash would be impractical as well as imprudent.

In case of emergency it is important to have the flexibility to use a credit card. If your account is low the debit card will be of litttle use. That is my .02 cents.

[Roger]

I believe that a credit card should be used only when you know how it will be paid off, in a severe emergancy when you can not pay any other way, for online purchases and to travel. This way you do not have a bill you can not pay, can repair your car as you drive home from Montana, can dispute the charge when the internet company sends you a black and white figurine instead of a white and black painting and so you do not need to go to strange places with lots of cash.
Last time I looked, debit cards were not protected by the $50 maximum charge if stolen except for certain issuing banks. If you want to use a debit card, carry a checkbook register with you and subtract out your purchases right away so you don't have problems with your account.
Roger

[mom-from-missouri]

Check with your bank. my debit card has the same protection as their credit card. But, the credit card still comes out of my checking account, just like the debit card. But, if I use it as credit, I get the % back and the reward points.