Survivalist Forum banner

1 - 20 of 31 Posts

·
Registered
Joined
·
5,420 Posts
Discussion Starter #1
Only because I've seen this topic come up a few times, and there are some very opinionated defenders of each in this forum, I thought this article was an informative look at the advantage/disadvantage of each, especially the different law that covers each type of card:

Are Credit Cards Safer Than Debit Cards?

verdict: yes
 

·
Registered
Joined
·
491 Posts
One upside of credit cards, if you can be financially responsible with them, is the rewards options. Pick whichever you want, airline miles, Amazon points, cash back, etc. In the current economy, the return can be a greater percentage than you get in interest on your savings account.

For instance, it is very easy to find a card with 1% back on everything. Got good credit, and then you might be able to get one that gets up to maybe 5% on some things. If this is money you are already intending to spend, then it is free money.

I put everything possible on my credit card. I also send in multiple electronic payments a month to keep a reality check of where my checking account stands versus my credit card. My wife and I had a very bad financial issue years ago due to huge medical bills for my son, sudden loss of a job, etc. We worked through that and recovered, but the credit card debt involved was scary. That is why i am so diligent to ensure we watch it so close. I also keep a limited limit on my card, Back then, we had credit card limits that in total exceeded our yearly income. That is totally insane, but the companies just kept raising the limits even if we were not using the full limit.
 

·
Registered
Joined
·
53 Posts
One upside of credit cards, if you can be financially responsible with them, is the rewards options. Pick whichever you want, airline miles, Amazon points, cash back, etc. In the current economy, the return can be a greater percentage than you get in interest on your savings account.

For instance, it is very easy to find a card with 1% back on everything. Got good credit, and then you might be able to get one that gets up to maybe 5% on some things. If this is money you are already intending to spend, then it is free money.

I put everything possible on my credit card. I also send in multiple electronic payments a month to keep a reality check of where my checking account stands versus my credit card. My wife and I had a very bad financial issue years ago due to huge medical bills for my son, sudden loss of a job, etc. We worked through that and recovered, but the credit card debt involved was scary. That is why i am so diligent to ensure we watch it so close. I also keep a limited limit on my card, Back then, we had credit card limits that in total exceeded our yearly income. That is totally insane, but the companies just kept raising the limits even if we were not using the full limit.

One thing to note with using your points directly on Amazon is that you lose about 20% of their value compared to just turning your points into cash and then spending it on Amazon


Sent from my iPhone using Tapatalk
 

·
Golden Cockroach
Joined
·
498 Posts
One upside of credit cards, if you can be financially responsible with them, is the rewards options. ...
There are no free lunches. Those rewards are paid for with transaction fees charged to merchants (and usually passed on to the consumer).

There is a local liquor store chain that advertises two prices for all their inventory - cash price and "non-cash" price (ie. credit card price). They pass on the ~3% savings from avoiding CC processing to the customer if you don't use a credit card. I don't know how they get away with it as I'm pretty sure the contracts that CC companies impose on merchants to accept CC payments prohibit this behavior, but they have been doing it for many years now.
 

·
Registered
Joined
·
9,754 Posts
Fueling stations have doing this for many years if not decades, with a cash price and CC price showing on their signs.
 

·
Indefatigable
Joined
·
19,787 Posts
We use a credit card sparingly and only to bump the credit rating. Good to have in an emergency, it saves a trip to the bank or ATM. We usually put less than $100 on one, several times a year and pay the entire balance every time.
 

·
Registered
Joined
·
491 Posts
There are no free lunches. Those rewards are paid for with transaction fees charged to merchants (and usually passed on to the consumer).

There is a local liquor store chain that advertises two prices for all their inventory - cash price and "non-cash" price (ie. credit card price). They pass on the ~3% savings from avoiding CC processing to the customer if you don't use a credit card. I don't know how they get away with it as I'm pretty sure the contracts that CC companies impose on merchants to accept CC payments prohibit this behavior, but they have been doing it for many years now.
Oh, I know that happens, but aside from the store you mentioned, gas stations someone else mentioned and Gunbroker that I know of, the fee is already built in and I get no discount. So I might as well get what I can. Just because I stop using cards there is not going to be a sudden drop in prices because businesses are saving that money. It is a system that has been in place since before electronic processing of cards. It is not likely to change any time soon. In addition, some middle man services charge businesses even more to funnel the transactions to the credit card processing system. I work in the financial sector, I know way more of the back room happenings that I really want to.

Now when I can save money by paying cash or mailing a money order, I do that. Plus, I have a few shop owners that I know personally that I am way more apt to pay with cash to help them save the money. Places like Wal-Mart, not so much.
 

·
Registered
Joined
·
34,130 Posts
Both visa and MasterCard offer the EXACT SAME protection for their credit and debit card.

debit cards have daily limits (easily raised by authorized users) to prevent your account (their liability) from being emptied.

If <$1,500 for 24 hours (only 1x has it taken longer than that for me to get my money back) is a big deal: you have bigger issues.
 

·
Purposeful Prepper
Joined
·
1,570 Posts
Which is safer depends in part on who you are.

If you are financially disciplined the credit card offers advantages. If you make a purchase on a credit card for gas or groceries pay the card off THAT DAY. Get a cash back reward.

In an actual emergency you have access to more money quickly and easily.

If you do not have the money available for an important purchase and use a credit card be careful to get a cash back reward and have a plan to pay it off quickly. On a large purchase paid off within 60 days the cash back either covers the interest or nearly covers the interest.

If you are not financially disciplined you are better off using a debit card.

I have an ex-wife (note the ex- part) who would charge anything she could on the credit card without any regard to understanding that had to be paid back. She maxed out a number of credit cards over the years. After our divorce she admitted that she could not even make the minimum payments on the credit cards and went into credit counseling. After 5 years of doing the thing of putting money into separate envelopes marked for their purpose she paid off the last of her debts. To her credit...

If you can't handle a credit card then a credit card is very dangerous.
 

·
Come and Take Them!
Joined
·
2,936 Posts
We recently bought a refrigerator on our debit card, that proved to be a lemon. Wish I would have used a credit card instead. It would have saved having to go to court.
 

·
Super Moderator
Joined
·
66,003 Posts
There are no free lunches. Those rewards are paid for with transaction fees charged to merchants (and usually passed on to the consumer).

There is a local liquor store chain that advertises two prices for all their inventory - cash price and "non-cash" price (ie. credit card price). They pass on the ~3% savings from avoiding CC processing to the customer if you don't use a credit card. I don't know how they get away with it as I'm pretty sure the contracts that CC companies impose on merchants to accept CC payments prohibit this behavior, but they have been doing it for many years now.
A lot of companies do that. Gas stations for example. When I got my merchant account, I was surprised that there were no restrictions against it.

Then again, gas stations get by with a lot of things such as using fractions of a cent. What other company does that?
 

·
Registered
Joined
·
5,632 Posts
I just paid for car tabs. State charged 3% to use credit card, free last year. Online check is still free.
I also paid my first medicare, $144/ month? Charged per quarter, i think no charge for using credit card.
 

·
Registered
Joined
·
15,930 Posts
About the only time I use my card is at the gas station and I always hit 'credit' to keep from paying the $.35 debit charge. The thing is, that card doesn't even have a credit account, it automatically comes out of my account at the bank. I don't even have checks for that account.

Now the other 15 or so cards that we have we just use to get the discount at the store we are buying from and we always pay it off that month. We never buy anything that we don't have the money in the bank for, even cars.
 

·
Registered
Joined
·
45 Posts
I don't know how they get away with it as I'm pretty sure the contracts that CC companies impose on merchants to accept CC payments prohibit this behavior, but they have been doing it for many years now.
Class action lawsuit against Visa in 2018 stopped the ban on passing on business cost to customers.
 

·
Registered
Joined
·
7,904 Posts
I use an amazon card for home and a starwood (now marriott) card for work. I get about a million points a year. A typical coach plane ticket is 25K, international business class is 120K-180k. Their top end hotels are around 25-50K/night The return is as high as 5%, but more typically 2-3%.

With the amazon card, all amazon purchases are 5% back. This represents a lot of our spend.
 

·
Deplorable Freedom Zealot
Joined
·
3,068 Posts
Aside from cash back, another plus for many credit cards, is the included extended warranty on items purchased with the card.

I have not owned a debit/atm card in over 15 years, and never will.

I have seen firsthand the amount of fraud associated with them.

It's much harder to get fraud straightened out on a debit card.

That's especially true, when your checking account is wiped out.

You accidentally write checks that bounce, if you are unaware of the fraud.

Leads to more hassle for bad check fees.

If a debit card is your choice, open up a separate bank account associated with it, so the thieves cannot totally wipe you out.
 
1 - 20 of 31 Posts
Top