Comments on: The other side of the card

By: karla (threadbndr)

karla (threadbndr) — Thu, 26 Feb 2009 18:22:59 +0000

I have and use both credit and debit cards. The credit card is for travel, mostly. I don’t want to put up with the ‘cash hold’ that hotels and car rental places put on debit cards, thought I totally understand why they do it. So those charges go on the credit card and are then paid off with money from the vacation fund when the next bill cycle comes along. That keeps my credit card history active (since I’m using it a couple of times a year) but it’s still a budgeted expenditure.

Daily expenses, debit card all the way. I have a high yeild checking account, which requires direct deposit and a certain number of ‘no pin’ debit card transactions each billing cycle to get the higher interest.

By: Andy @ Retire at 40

Andy @ Retire at 40 — Sun, 22 Feb 2009 04:37:01 +0000

You're right, Credit Cards can be good and when used properly can be a great source of money savings. I would however disagree with your point about using them for an Emergency. In reality a good Emergency Fund should be the way forward rather than the use of a credit card. I would hope that wouldn't be needed though maybe in the case of an Emergency Emergency it could be a last resort (but keep it as a last resort though). Andy @ Retire at 40´s last blog post..Turning a Rental House into Completely Passive Income

By: Kristy @ Master Your

Kristy @ Master Your — Mon, 16 Feb 2009 00:11:05 +0000

Thanks for posting that Kelly! Kristy @ Master Your Card´s last blog post..Would You Work Part-Time Just to Have a Job?

By: Kika

Kika — Fri, 13 Feb 2009 17:12:54 +0000

Hi Shannon, what kind of card do you use which enables you to "earn" about $1000/year?

By: Shannon

Shannon — Fri, 13 Feb 2009 03:15:47 +0000

We use credit but pay in full each month. If I knew of a debit card that offered the rewards we get on our credit card then I’d go for it. I like the easy in downloading transactions, the ‘protection’ and especially the ~$1000 cash we make each year by using our credit card!

By: Emma @ Baby-log.com

Emma @ Baby-log.com — Thu, 12 Feb 2009 21:08:05 +0000

I'm joining the people that voted for the debit cards. Eben though I have had credit cards before, they are trickier to manage, the debit ones are much simpler and simplicity is important to me. Also the costs make the difference. I don't normally carry much cash on me, almost everything I buy is paid for by a debit card. Emma @ Baby-log.com´s last blog post..What makes a good (or a bad) hairdresser for your toddler

By: Amy

Amy — Thu, 12 Feb 2009 15:19:59 +0000

Hi Kelly - great post. I'm with you, I prefer debit for my personal spending style though I do also think that there are many excellent strategies to using credit cards well, such as the ones mentioned in previous comments. It all depends on your situation. Using cash or debit on a day-to-day basis suits the way I manage my spending, and I simply like the debt-free lifestyle concept. The perspective in the payments industry is that there is a general shift towards cash payment methods driven by perception of the economy, high debt, and the fact that there is diminishing credit available in general. Big name stores like Walmart and Target have reported this over the past few months, and we'll see some evolution in cash payments to better meet consumer needs. Fraud protection is just one aspect of the decision. Note that debit does not offer quite the same protection as credit cards in this respect. According to federal law, liability for fraudulent charges is greater on a debit card than credit card. You can be liable for up to $500 on a debit card, while on a credit card it's capped at $50. Having said that, Visa and Mastercard have zero liability policies that go beyond federal law, however there are loopholes that still lead to bigger headaches with settling fraud with debit. See article on consumerreports.org.

By: Kelly

Kelly — Thu, 12 Feb 2009 08:31:02 +0000

(This is a comment from Kristy, of Master Your Card, who for some reason was not able to get past the spam filters!) See her blog at http://www.masteryourcard.com/blog

Great post! I love credit cards – always have, though for different reasons when I was younger. A couple of things: 1. Credit and debit cards have the same protection when it comes to fraudulent charges. I think credit card companies invented this myth when debit cards came out because they felt their business model being threatened. But, in reality, debit cards are subject to the same rules dictated by Visa and MasterCard as are the credit cards that carry the same logos. The only difference is that with debit cards, you see the money leave your checking account before it’s replaced, whereas seeing your available credit line decrease on a credit card is less tangible to our minds. We don’t really equate that with money missing like we do with our checking accounts. Debit cards also require a little more paperwork than credit cards, but aside from those two differences, the protection is still the same. Banks are still required to call about suspicious activity, freeze the card when odd spending patterns arise, etc. 2. You can totally make money at the credit card company’s expense. I do this at least once or twice a year through arbitrage. This can cause a slight drop in your credit score for the duration, but you’re not paying interest and you’re earning a little money on them, so it’s a fair trade-off in my opinion. 3. Just as a side note, many debit cards are offering rewards now. I know Chase has at least three different ones, so I’m pretty sure others also have reward cards, as well.

By: Kika

Kika — Wed, 11 Feb 2009 21:42:37 +0000

My husband and I use a joint, no-fee credit card for everything possible and always pay it off in full each month. We earn cash back at the end of each fiscal year which we use to purchase extra groceries & tree at Christmas time. Using a credit card saves us time, fees and hassle of having to withdraw money regularly. It works for us. I have “had” to get a second card in my name alone, to build up my personal credit rating (everything has always been joint with my husband who is the main wage earner). I’ve read this can be really important should anything ever happen to my husband. I don’t need or really want this card but choose to charge something from my budget on it every couple months to keep it current. We are united in the goal of living within our means and our desire to stay debt-free. Sometimes, though, I wonder if “cash-only” would push me to be even more careful with spending.

By: Craig

Craig — Wed, 11 Feb 2009 18:45:47 +0000

I’m glad you decided to do a positive post on CC’s. Too many negative posts but the reality is, if you use them responsibly, it can help you in the long run and make your life easier and less stressful.