I use my Costco American Express for everything I can and pay it off every two weeks. I like the cash reward check every year. More than pays for my 50.00 yearly Costco membership. It was almost 300.00 this year.
I wish I had listened to my girlfriend 10 years ago when she told me about it.

I use my Visa for everything over $3. I have loose change in my vehicles, but never more than a few of dollars - less than $5 in my purse. I don't go to garage sales, so no real need to carry cash.

Where we are, there is often a $10 minimum.to charge or debit. I would not pay for a gift card.
I use cash, charge or debit, depending on the circumstance. Also with our MC we rack up points toward free air travel.

Virtually everything goes on a CC and has for decades. I doubt we go through $800 in cash per year -- tips, small purchases. Some bills are direct-debit from checking. I pay a few by check. This provides me a record of *everything* except cash. I don't take a purse to the grocery; just put my driver's license and CC in my pocket.

I still use cash for things like my hair stylist, gasoline and restaurants because I don't like for those types of places to have access to my credit card. Your prepaid/gift card idea would work well for that because it would have limited liability. I guess, though, that my budgeting works similar to yours because I get a certain amount of cash from the ATM at the first of the month and keep the receipts so I know how that money was spent.

Why would I pay extra for a gift card when I have a card to use for free?

I see no benefit to this. I use my credit card for nearly everything, cash for the minor (under $5) things. I do pay the account in full every month. My liability is limited in case of fraud. They can't get to my bank account to empty it, either.

If you lose a gift card, it's gone. And as a percentage of what you purchase, the effective interest rate could be pretty high, depending how much you load on the card.

I use a credit card for nearly everything and pay it off every month. Then I cash in my rewards for gas cards or travel expenses every year. I do carry about $100 in my wallet in case I see something I just have to have at Yard sale, and replenish each month. I have never had a debit card ever. My daughter did and had her bank account cleaned out once. That was enough for me.

KK

I am pretty much cash all the way now, I find it easier. My GF still writes checks~~~it is crazy! So many shops around here will not take a check for less than $10~~~so she has to usually hunt for something else to buy. Her DH will not let her get a debit card~~~she even goes to the grocery store to write a check to go buy gas?? Isn't that nuts???

I usually use my American Express because it has the best cash back. If I can't use it, then VISA. We pay the credit cards off each month so no big deal. I mainly use cash for the kids for school projects.

We just use the Visa that's tied to our bank account most of the time. I run it like a credit instead of a debit card to help avoid fraud. We have a Costco Amex that we use, partly for the rewards. The main reason we got it is that I have to run my bank card as a debit there and I refuse to do so. I keep a little cash for small purchases or times like ordering lunch as a group at work. I never carry checks anymore.

Even if they get to your bank account, you get it back. Yes, you have to sign a legal statement (affidavit) saying you truly didn't spend the money, but? what does that matter if you didn't spent it? I'm limited in my liability too since I check my account daily. The moment anything is amiss, I'm on the phone.

Bothersome when I have replace all my credit card information, but now, I have NO accounts which autodraft my card. I changed one over to bank account, and the other two? i will just not keep one on file. Solved!

I use the debit card that comes with my bank account. Money comes right out of the checking account . I do monitor it regularly and keep good records.

Interesting that some have had problems with their debit cards. We have never had any issues with our debit card, but have had credit card fraud 3 times with our Visa card. We've just been issued new cards each time..I think the company can tell we didn't make the purchaes....but it's awful knowing someone has tapped into your personal info.

One Christmas I bought Visa gift cards for a bunch of people and nearly fainted at checkout when all these charges were tacked on...never again. I just can't see giving Visa, MC or any other company extra money for the "privilege" of using their card.

Yogalady---your GF's hubby won't let his wife have a debit card, but she can write checks? This makes no sense at all. Even if he was worried she would over-use it, most banks offer overdraft protection....or he/she could simply check out their balance online every day if need be.

I always like to carry at least $20 on me....just in case I need/want to stop off and buy a soda or lunch....chipping in to things at work like retirements, flowers for sick coworkers, etc...I usually never walk around with more than $40-50. We use debit or credit for most purchases and seldom write checks anymore....especially since we pay all bills online.

I'm like Rose for most purchases. Use the debit card associated with our cking account.

I use my Capital One Visa for monthly bills like electric, cable, etc., and for big purchases. 1.5% cash back. It's up to $142 right now! We faithfully pay it off every month.

I only ever had one problem with our debit card, freakin' Target scandal back in December. I RARELY shop at Target, but they had the yoga pants, in long length, that my daughter loves. So I bought them for her for Christmas and used my debit card. Had to get a new one issued.

I don't see a risk to the holder of a CC.

If you didn't make a charge that shows up on your bill, you notify the issuing bank, and they absorb the cost. If your card is lost or stolen, you notify the bank, and they absorb any fraudulent charges while immediately issuing you a new card.

Pay your CC statement on time, in full, and your cost for using the bank's money for 30 days is...nothing.

Yes, banks issue credit cards hoping we will carry a balance or accept a cash advance, but we are all grownups here, right? We know we are spending our own money when we charge something. We know better than to pay 18% interest on our groceries or some knick-knack-- let alone interest on the interest. We know how to pay bills on time. We know we'll pay 25% interest on any 'cash advances' offered by the bank. DON'T WE?

My Pal's DH will not let her have a debit card because he is afraid of theft. He was a grocery store manager for years for a popular chain in our area~~he was forced to have his paychecks put on auto deposit with the bank. He wakes her early on the mornings their SS checks are deposited and makes her call the bank and make sure they are there?? I tell her to do it all on line, he will not do that.

It is like all crazy to me;(

Debit cards if stolen, the money is taken out immediately and it's gone if stolen. Credit cards you can dispute and your money is NOT taken without your permission. Also I get cash back with credit cards. I also do NOT abuse them or have a spending addiction.....

It's not gone if it's stolen nicole. I just explained how you simply dispute it and they put it back in.

rob333.....a lot of people live pay check to paycheck. It's GONE when they need it! Miss a couple of house payments while your disputing it and lets see how GONE it is or isn't.....

It's not gone forever. My bank immediately re-credits the charge. I live paycheck to paycheck, so it applies to me.

Disputing and getting money back usually isn't instant. It's relatively fast but not instant, at least in my experience. First you have to catch the problem, and most people don't check their bank accounts every single day. Then you have to take the time to figure it out, get the bank to sign off on it and all the associated paperwork and wait for the money back.

The real issue is if you have a bill payment that hits your checking account before you realize there's a problem, and there's not enough in there to cover it. The lender doesn't care why they didn't get their payment, and then you're stuck with overdraft fees, late payments and all sorts of issues.

I think it's much safer to stick to a credit card and pay it off every month. I do use a debit card but keep only a small balance in checking. But people have different levels of comfort so whatever works for each of us is fine.

Debit card for most everything I purchase in person unless it's just a couple bucks. Visa credit card for everything I purchase online which is a lot especially from Amazon. Checks to the church and other donations as well as to the housecleaner, pet sitter and hair salon.

Personal risk from unauthorized use differs between debit and credit cards. It also differs from bank to bank.

For debit cards, by law you can be liable for up to $500 if the unauthorized use isn't reported within two days. For those of you who only check monthly paper statements, that could be a problem. Some banks offer better protection, you should check with your issuer to learn what their policies are.

Most credit card issuers will reverse all unauthorized charges.

I feel much more risk about a card connected to my bank account, than one that just runs up a balance to pay. I use my debit card only for ATM transactions in round numbers, that way I know anything else that comes through is a problem.

Chi, maybe it is different when it is a bank account card or a free standing credit card, when disputing. When it is attached to an account is what I am basing my situation on. Or maybe I just have a cool bank.

Merchants can NOT impose a minimum amount for a charge. If they're reported they can lose their plate.

I use the debit card from my bank or cash. There are some stores that have had problems with debit card info that was stolen so I only use cash at those stores and never will use a debit card at a convenience store. I don't desire a credit card as much as my bank tries to convince me that I need one. If I want to purchase something online I get someone to order it for me and I reimburse them but it is not often that I buy anything online. My SIL will also offer to put my purchase on her credit card and i just reimburse her when the bill comes in. Works well for both of us.

Cherryfizz - really?

You don't want the risk/convenience of a credit card, but you're wiling to expose family/friends to the same risks? Yeah, that's nice.

Get a Paypal account.

Cherryfizz, your bank doesn't offer a branded Visa or Mastercard that functions as both? We have a Visa that we can use as either. They also offer just a debit card. The money comes straight out of our bank account no matter if we use it as a debit or credit. There is no credit attached to it, though, so there is no worry of overspending. If the money isn't in the account, the charge won't go through. It does offer the limited liability of a credit card, though, so if you lose it, you're liable for a limited amount of money. I refuse to run mine as a debit, but it's awesome to have the features of a credit card while you know the money is just being withdrawn like you wrote a check.

kittiemom, your description is exactly what a debit card is. Most debit cards have Visa or Mastercharge compatibility, but your purchase comes out of your bank account. You're not using it as both.

That's what debit means - the bank debits the purchase to your checking account (ie, reduces the balance).

Seems like lots of people here are confused about the difference between credit cards and debit cards. They are covered by completely different banking regulations.

Here is a link that might be useful: credit vs debit

We use our debit card like a Visa-no password to remember. We are still paying off the move back to AL from last summer that we put on the regular VISA so I won't use it until it is paid off. I just recently took back the finances and I pay all the bills via our debit card, only a few by check and all but one or two of them are paid via the check system at the bank. Those are too our lawn maintenance guy and one of the hospitals. I have decided to pay off all our credit cards within the next year. I didn't realize that our VISA cc was still tied up. I will get them all paid off and limit Christmas gifting.

It rarely works, but offer for payment an autographed picture of me. I tell the potential recipient that it should be looked at as an investment. There is some potential that it might be worth big bucks in the future. Like I said it rarely works.

Then, I offer my first born male child. That does not go over very well either.

Jim

Hi Jim #1,

So - you're female child is #1 with you ...

... and the male one second best ...

... thus exportable?

o j

Jim-1 --Our CC's have our photos, but I've yet to see a clerk use my picture to identify me as the legitimate cardholder.

I don't understand why an adult would not have a CC --one with no ties to a checking or savings account.

There is zero risk to the cardholder. Your liability is to pay for what you've charged when the statement arrives -- or to notify the bank if your card is compromised or stolen. If the card isn't tied to your bank, you can't be unknowingly overdrawn.

BTW, I just read that the average American's checking account balance was at all time highs in 2012 and 2013: Over $4K. That could be because people don't trust stocks, and the rate of return on secured savings is so teeny. Maybe we're charging more? I hope it doesn't mean more people are living beyond their means and paying more in interest.

Who can explain it?

Living paycheque to paycheque?

What do you do if your factory has a major fire, as happened yesterday to a big veggie processor near Windsor, over-river from Detroit, causing the loss of 700 jobs?

Or the closing of the 100-year old Heinz plant in Leamington, with several hundred job losses?

Or your job becomes redundant due to automation ... or moving it to China?

Or bringing temporary foreign workers here to replace you?

Or you get a long-lasting, non-work-related illness?

Do you just chew fingernails ... or sweat blood?

When will you decide to get a financial cushion in place to keep your nose above water ... for a few months, at least?

And act on that decision?

ole joyfuelled ... part of the joy fuelled by having some funds on hand in case of emergency (or going into a residential or nursing home)

Hey joyfulguy -

Three sons and no daughters. Actually, my first born (becomes 40 this year) is a good guy, the third one has been a problem for many years.

No one wants my sons and not one wants my picture. I am stuck with my sons and the missus is stuck with a big stack of pictures.

Really mary c! - I am not exposing them to anything. My SIL has a credit card already, offer to let me use it so SHE can get the points that she can use. I could care less if I use a credit card because I have the cash, I don't really need it, My SIL is a responsible adult who pays off her card the as soon as the bill comes in The reason I don't have a credit card is not because of risk, it is because I don't need one. If I can't pay cash for something, i don't need it. Sure is nice to be debt free.

We use a credit card for almost everything we buy or services we use. I am debt free as we pay this off every month. Using a credit card all the time certainly does not mean one is in debt Cherryfizz. There is no interest charged when paid every month. We earn money back on all purchases. The only cash we use is to tip servers or something under $10 maybe.

Snidely, I'm an accountant. I believe I have a pretty good grasp of debits vs. credits. In fact, I said in my post that there is no credit attached to the card, which should indicate that I do understand that it functions as a debit card instead of a credit. And if I didn't understand the difference, I think that the fact that I see the money coming out of my checking account vs. getting a monthly statement from the card company would have probably tipped me off.

I well understand the difference between debit and credit cards. I realize that any card connected to your bank account is not truly a credit card regardless of how it is branded. The cards my bank issues are branded Visa cards. The money is coming directly out of the bank account, so it functions as a debit card. But because it is a Visa and not simply a bank issued debit card, our liability for unauthorized purchases is $0. Plus we can run it without a PIN, which you can't do with a card that functions only as a debit. At one point years ago, our bank had only bank-issued debit cards attached to accounts.

This post was edited by kittiemom on Sun, Jul 20, 14 at 9:23

'Disputing and getting money back usually isn't instant. It's relatively fast but not instant'

ample reason to buy gift/debit cards for a vacation.

If the card is stolen, the amount remaining on it is the extent of the loss, & my bank account remains intact.

no stress.
no anxiety.
no filing a claim.
no waiting to see when the cash is restored.
don't have to call & ask anyone to wire money to get me home.

well worth the few dollars the cards cost.

If you can't figure out how to use a CC to your advantage, not to the issuing bank's advantage, you probably shouldn't use one.

Can you really be an adult and not know that using a CC is spending your own money? Does an adult not know that he must pay his bills on time or pay interest on the total? Doesn't he know that 'living on credit' beyond the 30 day float means he is paying interest on everything he buys, from a Twinkie to a suite of kitchen appliances? Doesn't he realize that continuing to run a balance means he is paying interest on the interest?

Why would anyone NOT use a cash-back (or point-gathering) CC? Why wouldn't he use the bank's money for 30 days -- and only for 30 days? Let the bank pay YOU, not the other way around. You merely have to fail to be the dumb sucker they think you are! (Sadly, they seem to have proven most of us ARE dumb suckers!)

Twice I have reported a stolen or lost CC. During the call I was given a card number to use. I received my new CC within 24 hours via Fed-Ex. I had cash and checks on hand in the interim, but I can see the valid point Sylvia makes about vacationers.

chisue, I think that some people realize that they have a tendency to overspend if they use a cc, so they would rather just use their checking acct to avoid temptation. In our case, we earn rewards with our debit card just like a regular Visa, so we get the rewards and the simplicity.

We have, though, on multiple occasions, gotten a a no-interest store cc to purchase big ticket items like appliances. I know they count on the fact that a lot of people will miss a payment or won't pay off the purchase on time so that retro interest will apply on it. They're also hoping that people will use the card to charge other things and will carry a monthly balance and they can earn interest that way. DH says that if they knew anything about me they wouldn't want to sign me up, because I always pay off the purchase early and I don't use the card for other things.

1)
When we know how to do something, it's very easy to blast those who don't.

2)
Banks don't *tell* you how to use a credit card "to your advantage" rather than theirs.

3)
You aren't using your own money when you use a credit card.
You are using someone else's money, & you pay it back with your own money.

4)
There's nothing wrong with paying for the use of someone else's money, as long as you know what it's going to cost you before you agree to the terms.

kittiemom,

Glad to hear you're an accountant. We should have a lot in common, I'm a CPA, though I did accounting work only in a broad sense.

I may have misunderstood you, but comments like "is not truly a credit card " and "it functions as a debit card" don't suggest that you have a clear understanding of the difference. A debit card is a debit card, a credit card is a credit card, the main difference between them is what happens to an authorized charge. A debit card is not like a credit card any more than a car is like a horse. The regulations and practices that affect issuers and holders also differ, as I suggested. Nothing more.

(edited for misspelling)

This post was edited by snidely on Sun, Jul 20, 14 at 13:11

I try hard not to use my CC when shopping. I know I can get a lot of cash back with my AE/Costco card, but if times get rough (and they always do for us), paying off the bill at the end of the month isn't always easy. I used to be able to use my card, then pay it before we left the store. But then I got lazy and didn't do that a few times and next thing you know we're paying about 19% interest. So I only use it for Costco runs and nothing else. Otherwise, I use our debit card or cash.

I understand that Hellion, just because you have a credit card doesn't mean you are in debt. i worked in a bank for many years and can see it can be a slipperly slope from having no debt to huge debt. I had one senior customer who used his credit cards to his advantage by taking advances on his cards to pay down his other cards. The next month he would switch it up. I also saw my Mother's bank issue her a credit card when she was in the beginning stages of Alzheimer's. When I started taking care of her affairs I saw that she amassed a huge credit card debt by only paying down the minimum payment while still using the card to make expensive purchases. I will stick with my debit card/bank withdrawals and live within my budget

Cherryyfizz, I understand what you are saying to a point and it can be a slippery slope as you say for some, but not for all. I respect the fact you don't want a credit card, just as I don't want a debit card. We all should use what is the most comfortable to us.