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Frequent Contributor

Prefer Credit Card Over Debit Card or Check

https://www.cnbc.com/2019/08/27/debit-cards-are-dangerous-warns-fraud-expert-and-ex-con-artist-frank...

".....With today’s technology, all a thief has to do is go online, give a check-printing service your name and account number, have the checks sent to a post office box and voilà — there goes the contents of your checking account.....a debit card is certainly and truly the worst financial tool ever given to the American consumer. Why? It’s simple: Every time you use one, you put your money and your bank account at risk.....Instead, use a credit card. I use one for practically all of my purchases, even when I’m traveling abroad. With credit cards, federal law limits my liability if there’s an unauthorized use of my card....."

YBB
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Contributor ○

Re: Prefer Credit Card Over Debit Card or Check


@yogibearbull wrote:

https://www.cnbc.com/2019/08/27/debit-cards-are-dangerous-warns-fraud-expert-and-ex-con-artist-frank...

".....With today’s technology, all a thief has to do is go online, give a check-printing service your name and account number, have the checks sent to a post office box and voilà — there goes the contents of your checking account.....a debit card is certainly and truly the worst financial tool ever given to the American consumer. Why? It’s simple: Every time you use one, you put your money and your bank account at risk.....Instead, use a credit card. I use one for practically all of my purchases, even when I’m traveling abroad. With credit cards, federal law limits my liability if there’s an unauthorized use of my card....."


I use credit cards practically for all purchases. But my wife still uses cash. That came in handy here in Mexico City today for some purchases because they asked for cash in Mexican currency. They don't accept American dollars either. But, she uses credit cards also in Chicago when making big purchases for the grandchildren.

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Contributor ○○○

Re: Prefer Credit Card Over Debit Card or Check

 

Good advice. Credit cards offer greater protection against unauthorized use.
Under the Fair Credit Billing Act (FCBA), your liability for unauthorized use of your credit card tops out at $50.
However, if you report the loss before your credit card is used, the FCBA says you are not responsible for any
charges you didn’t authorize. If your credit card number is stolen, but not the card, you are not liable
for unauthorized use.

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Explorer ○

Re: Prefer Credit Card Over Debit Card or Check

There are places in foreign countries that only accept cash so, when we're traveling, we use a USAA debit card for getting cash--that way we avoid credit card cash advance charges and foreign transaction fees. The account is used only for that purpose and we only add cash as needed.
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Participant ○

Re: Prefer Credit Card Over Debit Card or Check

I’ve been using my credit card instead of debit for almost all purchases because it gives me 2% back. We are averaging about $60/month cash back from the credit card, simply for using to for purchases we had to make anyway. This is equivalent to the monthly interest we would get from about $40,000 in CDs or money markets. Not a bad deal at all.

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Frequent Contributor

Re: Prefer Credit Card Over Debit Card or Check

I use chip enhanced credit cards for purchases and my debit card for cash at my bank ATM only. In use cash and credit cards for all purchase, checks only for a few billed items. The bank knows what accounts are paid directly. I think that is safe.

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Contributor ○○

Re: Prefer Credit Card Over Debit Card or Check

Further, with credit cards, there are cashback rewards that can be employed profitably for Manufactured Spending, if utilized "prudently".  

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Participant ○○○

Re: Prefer Credit Card Over Debit Card or Check

Some years back my bank ATM card came with a MC or Visa logo so it could be used as a debit card. Though I never, and I mean never, use the debit card. Too many risks of being scammed. But somewhere along the line I used the card at the bank ATM to pull cash and next thing I know, someone is using the card as a debit card and buying UGS and DSW shoes and a whole variety of items. Called the bank and went through the hassle of getting the stuff taken off my account and the funds credited back. 

Some time later, it happened a second time. Same scenario. Since then I contacted the bank, gave them the card with the MC logo on it and asked for JUST an ATM card. My card can only be used to withdraw cash from the ATM. It is not a debit card. 

I totally agree, debit cards are far too risky in today's technological environment. 

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Frequent Contributor

Re: Prefer Credit Card Over Debit Card or Check

My checking account was never compromised and I have the same account over 20 years. I never use a debit card.  I use the Fidelity 2% to pay any amount, even 99 cents. In the rare occasion the merchant doesn't accept my CC I will pay with cash. I pull out maybe $100 every 2 months for me and the wife together.

If I need to pay bills I try to use only my CC but 2 bills can only be paid by cash so I set up it up at my bank site and never at the merchant site.

If I want to pay somebody with cash I use Paypal because Paypal will verify your bank account in 1-2 days (it's probably the same as creating a link from Fidelity/Schwab to your bank) while Vemno is less secured with no waiting time.

For gas I use Penfed 5% cash back.  I use the same card abroad for all transaction(not the Fidelity CC) because this card has no fees.

For cash I use Schwab global ATM card.  They will pay back any fees which makes it a zero fee card.  When we travel abroad I take small amounts of $100 beacuse I don't care about fees, in the last 1-2 days I take just $50.

The European CC transactions are better, if you eat at a restaurant they come to your table with a small CC reader and do the transaction in front of you while in the US they take your card away for several minutes. 

In the last 3 years my Fidelity CC was compromised twice and they had to issue me a new CC and we had to wait several days for the new CC.  To solve this problem I have 2 Fidelity CC, one to pay only bills and one for daily use.  We get around $1000-1200 cash back annually.

Basically, my goal is to have a very effective and simple system of just 2 CC in my wallet + one ATM + paying zero fees and we pay all our CC in full every month.

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Frequent Contributor

Re: Prefer Credit Card Over Debit Card or Check

I’ve also gone to paying for nearly all of our “stuff” with Credit cards. We have a household “rule”- ALL our cards are paid in full every month, so we have no CC interest payments. Our cards give us about 1.5% to 2% cash back, so we use them for eating out, groceries, gas, shopping, and most other purchases.  Rarely do we use our debit card, only occasionally at gas stations if they charge a higher amount for credit cards. 

Win
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Participant ○

Re: Prefer Credit Card Over Debit Card or Check

I also have never had a debit or ATM card.  I have three credit cards that I use exclusively and pay in full each month. Occasionally I use Paypal on internet purchases. I write maybe three or four paper checks a month, and incidental expenses are paid in cash.  

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Follower ○○

Re: Prefer Credit Card Over Debit Card or Check

I play the miles/points games with CC and I never use debit cards or cash. If I need cash overseas, I use the Schwab bank card @FD1001 mentioned. I have a Chase Marriott card for hotels to rake up Marriott points, Chase Sapphire Reserve for Chase rewards points and United Mileage Plus Club for United miles and sometimes AmEx Gold. I used to have Costco Amex cashback for everything but since Costco switched to VISA I abandoned the cashback and I save way more with travel redemptions than even $700 annual rebate I used to get from Costco. 

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Contributor ○○

Re: Prefer Credit Card Over Debit Card or Check

Credit card is still a profitable field in cashback.  Typically one can get 5% for restaurant, gas, grocery, online purchases, travel, and home improvements.  And 3% for all other purchases.  It adds up.

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Explorer ○

Re: Prefer Credit Card Over Debit Card or Check

I guess I'm the odd man out. I never use credit cards and only have a single debit card with a local credit union. I keep a minimum of 20k in the account and they give me 3.3% interest, up to that 20k balance, as long as I use the card a certain number of times per month and log into my account at least once per month. $660 per year not including all ATM fees paid back. Good enough for me and I don't have to deal with paying things off every month.

Also, a debit card has the same protections as a credit card if you select credit when checking out. Sure, you may see the money taken out of your account if someone gets access, but the bank is required to put it back within a day or two of it being reported.

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Explorer ○○

Re: Prefer Credit Card Over Debit Card or Check

buddy17: you make good points.  However, my concern is that while the bank is required to put the money back into your account if someone has gained access and drained the account, what happens to any payments that you have previously authorized that hit your bank account while it's empty?  I envision a cascading effect that will require some significant effort to sort out.  And if this were to happen while I was traveling it could well be a nightmare.

I am one of those who don't use debit cards; as someone else mentioned, I even had my bank issue me a cash card that is not a debit card.

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Contributor ○

Re: Prefer Credit Card Over Debit Card or Check

We use three credit cards: one locally, one for bills, and one for internet purchases.  We also have an ATM card that we use at local branches of our bank to get cash.  We reserve the money in our bank account and pay the credit cards off in full every month.  We haven't paid credit card interest in over 10 years.

Having our monthly bills sent to a credit card really reduced the number of checks we write.  The only problem we've ever had was when new cards were issued with new expiration dates.  Some of our automatic payments didn't go through.  It was a simple fix once we knew it had happened. 

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Re: Prefer Credit Card Over Debit Card or Check

I read probably the same article on the Microsoft News that pops up on my computer.  Always good information, and especially timely for me.  As I mentioned in a post on another thread, I'm moving into an apartment next month.  Up until now I've just had a checking and savings account with the local credit union, and both my retirement annuity and social security was going into the checking.  I don't drive or own a car, and there is a branch of a regional bank (Citizens Bank) literally across the street from the apartment complex, so I opened a checking account with them, and am having my first of month retirement money direct deposited with Citizens.  I had no thoughts of also getting a credit card, but when opening the account I was offered a no-fee Citizens credit card with 1.8% cash back on everything.  So I took the card  and am putting all purchases on the card.  I was already getting a little leery about using my debit card, I would periodically hear about the dangers, and the advantages of using a credit card instead of a debit card.  I am using the Citizens account for all of my expenses NOT apartment related.  The credit union account will be used for rent and all associated apartment bills and expenses.  Early days with the new system, but I like the separation, one account for the apartment, and the other for everything else.  Obviously I will be paying the credit card in full each month, already wiped out the first month's bill.  And I don't even have to write a check, I can transfer the money directly from the checking account to the credit card bill.  

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Frequent Contributor

Re: Prefer Credit Card Over Debit Card or Check

Luckily, we haven't had problems with checking account compromised - so far. But I know of 2 friends whose bank accounts were compromised. In one case, this happened when they were overseas and the bank won't deal with their children here - for security reasons! So, they had to cut short their trip to sort things out.

Using debit card as credit card at the point of purchase is a good idea. But the debit card may be compromised in other ways and the linked checking account may be frozen while things are being sorted out. Often there is fraud associated with unused or little used cards.

As precaution, I have alerts set up on all accounts. I have authorized users on some cards and sometimes I ask about charges before they inform me. Also, not everything is connected to same account(s). 

YBB
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Frequent Contributor

Re: Prefer Credit Card Over Debit Card or Check

Mobile/e-check fraud growing.

https://abc7chicago.com/scammers-use-mobile-deposit-technology-to-rip-off-businesses/5503434/

"....."They white-out the payee, and change that," Kresse said. "They white-out the amount and put some large amount, but they don't white-out the account numbers at the bottom of the check, so eventually those funds will be withdrawn from that person's checking account."

Kresse said it's harder to detect fraud when only a check image is used for mobile deposits.

"The mobile app doesn't have human eyes looking at it. At least not yet," Kresse said. "They may do that. They may use artificial intelligence to take a part to determine the scam checks from real checks. Many apps, they're not doing that now and so the bad guys are getting away with this fraud."....."

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Follower ○○○

Re: Prefer Credit Card Over Debit Card or Check

Credit cards all the way except when it's absolutely necessary to use cash or check. I haven't needed new checks in years because almost every bill I pay is with a credit card, usually online. As others have said CC give the protection that you can't get with cash (if it's gone, it's gone) and the times I use a debit card is for ATM withdrawals (especially when traveling internationally, other than my CC, which has no transaction fee, I get the best exchange rate that way). I have 2 cards that I use almost exclusively, one gives me 5% on gas purchases, supermarkets and drug store, and 1% everywhere else (after I spend $6500, or about 2 months). The other card has quarterly revolving 5% rewards, which is nice when it's someplace you might spend a good amount of money at one time, IE Lowes, etc. As someone else said, I probably reap around $$800-1000 a year in rewards. Also, when using credit cards I'm able to increase or maintain my credit score (which of course is important for several reasons, lower loan rates, etc), this doesn't occur with debit cards. I see little benefit to using debit cards in place of credit cards.

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