Are credit cards bad?

[marglo]

Re: Are credit cards bad?

What about Visa? My debit card says Visa on it.

[cercis]

Re: Are credit cards bad?

Yes, but the leading numbers will be different than a credit visa. I used citibank mastercard as an example because that's one I know by heart (that was the main card I did collections for).

I don't know why some wouldn't take it, but that's a risk.

[Bruce Wayne]

Re: Are credit cards bad?

I wrote a report on this issue recently as it does seem like more and more credit cards are removing the rewards and other perks for signing up to them.

[jmjj215]

Re: Are credit cards bad?

While I think it is possible with some effort, I find that I SAVE money due to Internet deals when travelling if I have a credit card versus not having one.

I use a CC now for the cashback, but we used a debit card for a long time to get those same internet deals. Am I missing something else?

[jmjj215]

Re: Are credit cards bad?

My wife and I did the same experiment mentioned above - used pure cash for groceries. We noticed no change in our spending from using the CC and getting the cashback. The trick is the budget that happens LONG before you're ever standing at a register.

[CRFSaver]

Re: Are credit cards bad?

Curious JMJ, how did you ever rent a car without a credit card?

[CJsoccerchic]

Re: Are credit cards bad?

I think credit cards are great - I have been establishing my credit with a credit card (and one car loan - paid off already) and thinking towards the future for when it comes time to buy a house - gotta have good credit to get the best rates, right?!

[marglo]

Re: Are credit cards bad?

Jm, I am expecting to learn the same thing you did...actually that is what I am hoping as I prefer to use a card to pay. Just easier plus I like the cash rewards! But I just have to know for sure. Like you we live on a budget.

[jmjj215]

Re: Are credit cards bad?

Curious JMJ, how did you ever rent a car without a credit card?

I used my debit card. It wasn't even an issue with them (Hertz I think? Most of the time). Should it have been?

[cercis]

Re: Are credit cards bad?

Sometimes it is Jesse. Plus, they put major holds on your cards, so either you were lucky or you are carrying a very high balance in your checking account (which is why it is sometimes an issue).

I would never do anything over the internet with a debit card. I know they are protected like credit cards, but it can take a long time to get your money back if it is stolen.

[jmjj215]

Re: Are credit cards bad?

The only thing I don't like about the dis on debit cards is that most people would be better off using them. How often do you actually dispute a charge? How often has your DC been stolen?

I feel that a lot of people are not yet ready for the responsibility (and added benefits) of CC usage - so it's tough for me to tout off the advantages b/c I feel like it might lead some people to use a CC and get into trouble.

I actually wrote an article about it here

[jmjj215]

Re: Are credit cards bad?

Let me reiterate. I use a CC for virtually every purchase. We pay it off in full each month. I enjoy the cashback and the security of being able to dispute a charge if it ever happened. I even enjoy the float to a certain degree. The cashback gets us one month's groceries every year. I have monitored our spending pre- and post- credit card and have noticed no statistically significant difference. I'm for credit cards if you meet the six criteria I mentioned in the article.

[cercis]

Re: Are credit cards bad?

Here's the issue I have with debit cards. Most people are not fully aware of the holds that merchants place on cards. When you rent a car or a hotel room, the merchant often places a hold of 2-3 (even as much as 5) times the amount that they expect to charge. If you have not planned for this hold, you could bounce checks left and right. That will cost hundreds of dollars and could cause you to have to purchase money orders to pay your bills (unless they have a place you can pay cash nearby).

Some restaurants even place large holds on cards. They say it is to allow room for tip (whatever) but they aren't fully cleared until they clear the register that night. So if that hold puts you into the red zone (maybe because a deposit hasn't been "released" yet) then you could bounce a check that day.

I don't even own a debit card. I found the stress of worrying about who was placing a hold and how much of a hold it was to be too much for me. I try not to keep any more than I have to in my checking account (because it is free to transfer from savings and that way I earn a smidge more interest).

[jmjj215]

Re: Are credit cards bad?

Definitely a valid concern cercis.

[CJsoccerchic]

Re: Are credit cards bad?

I find that using a cc is so much better on everything. Yes, you're not supposed tospend what you don't have - but if you have a guareenteed paycheck every two weeks and know exactly howmuch you willbe getting. then i see that it's OK to spend and use "credit"
Debit cards are not even in my wallet. I can't handle paying out hundreds of dollars on bounced checks or anything. I'd rather get charged one dollar on interest fees from my bank for not paying on time rather then charded 35 dollars for a bounced check!