Dumbest Credit Card Ad I've Seen

[JohnH]

This has to be the dumbest credit card ad I've seen in a long time (maybe in a lifetime). Their pitch is that you can "avoid interest even if you carry a balance". Then they offer the following explanation:

1. You choose the categories you want to pay in full like dining and utilities
2. The credit card co will separate and total them on your statement each month
3. You can avoid interest when you pay them in full – even when you carry a balance


So if I charge $100 to dining, $200 to utilities, and $300 to car repairs and then pay $300 against my balance, what difference does it make whether the interest I pay on the remaining $300 is interest on dining, utilities, or car repairs?

I'd like to ask them if they think their customers are that stupid, or it is just their ad people who are that stupid? Unbelieveable.

[Burke]

I think when you normally pay less than the full balance, you are charged interest on the average daily balance of the whole amount put on the card and outstanding. I guess they are offering to not charge on the part you actually pay? The reason I think that, is because one time I transposed some figures and was short $5 on the full balance. I got whacked.

[gkaiseril]

3. You can avoid interest when you pay them in full – even when you carry a balance

Most likely only the amounts that you specify as wanting to pay in full and pay in full would be excluded from the interest calculation. But everything else and any unpaid balances for the special category will be used in computing the interest charge.

[JohnH]

I checked the fine print in the ad, and it doesn't say anything about the daily interest, even though I also thought at first that may be what they were talking about. In any event, interest paid for the use of money is simply interest. Period. What the money was originally used for is irrelevant - the interest charge on the unpaid balance is still the same; the interest isn't special - it really doesn't care what the purpose of the borrowing may have been.

[taxxcpa]

I was one day late on one of my cards and got soaked with a fee. Now I no longer use that card and use only my Discover card which I've set up to have them draft my bank account for the full balance due on the due date. Now I can forget about paying it on time and let Discover do it automatically.

[ATSMAN]

I cut up most of my "free" credit cards and now just have 3 cards. A Discover card for most transactions, a Master Card and an Amex because COSTCO does not accept any card other than Amex.

Other than Christmas bills, I pay off the full balance each month.

[John of PA]

Today's commentary on Credit Cards......

All credit cards are "dumb". Credit Cards are legalized "Loan Sharking" and "Extortion". History will laugh at our times as how we could have been so "dumb" in falling for this "spending more money than you have" and " I'll give you one dollar today and you replay me 2 dollars tomarrow". Be sure to add all late fees and any other type fees to your interest rate. I say this from experience, having leaned this the hard way. Make no mistake about it, big corporation make thier billions convincing us that we should not be happy with what we have and we should want more, if they can keep us always wanting more, with thier powerful marketing and advertising muscle, then the top brass as these corporation make thier billions, sitting in thier big city 34th floor plush office, controlling our decision making like we are their pauns.

[taxxcpa]

[QUOTE=John of PA;156143]All credit cards are "dumb". Credit Cards are legalized "Loan Sharking" and "Extortion". History will laugh at our times as how we could have been so "dumb" in falling for this "spending more money than you have"
====
Anyone who is dumb enough to pay interest and penalties on their credit cards should be allowed to go ahead and prove that a fool and his money are soon parted.

For those of us who use them and pay in full at the end of the month, they are a no-cost convenience that enables us to avoid carrying large sums of cash or writing numerous checks every month.

I have several cards, but use only one which automatically drafts the full amount due on the due date each month, and gives me a cash rebate for using it.

[John of PA]

TaxCpa, you make some good points but keep in mind that you can accomplish your goal of not carrying around cash with a DEBIT card; and also studies have shown that even people who pay off thier credit card every month still tend to spend more money when shopping with a credit card than if they were using cash or a DEBIT card. The one advantage that has been established of a credit card is, if an unauthorized charge comes through, you can dispute the charge without having to have paid the charge, unlike a Debit card where the bank has your moeny during the dispute.

[David1980]

In this age of internet shopping I specifically use a credit card for all online purchases.

Yes, debit cards do offer consumer protection as well. But, I look at it this way. If someone steals my credit card number from an online purchase and charges $1,000 worst case scenario I can't use that credit card because they've maxed out the available credit. But I never have to pay the $1,000 they charged, I contest it. If someone steals my debit card number from an online purchase and charges $1,000 my available balance on my checking account is reduced. I can dispute the charge and won't be liable for the $1,000. However, if I have checks outstanding or need to pay rent or something I can have bounced check fees and late fees. Both with my bank and with whoever I didn't get paid on time as a result. A no-fee credit card is very easy for me to choose to use instead. I don't see the downside.

I also always carry at least two methods of payment. If my debit card gets declined I don't want to worry about how I'll pay. It's happened before where the bank's systems were down or due to a bank error (they gave me a $5 starbuck gift card on that one.) Had a credit card decline because of too many fuel purchases so suspected fraud (was on a car trip - probably could have fixed that one with a phone call.)

[ATSMAN]

I have a debit card but I don't use it except as a ATM card. You pointed out the problem with using a debit card and getting ripped off by an identity thief. You bank account is immediately debit and then you have to dispute it and wait for months t be restored. With credit card you don't have that problem.

So the rule of thumb is do NOT use debit cards for online shopping.

[FEDUKE404]

Prefer NO dwbit card

I have a debit card but I don't use it except as a ATM card. You pointed out the problem with using a debit card and getting ripped off by an identity thief. You bank account is immediately debit and then you have to dispute it and wait for months t be restored. With credit card you don't have that problem.

So the rule of thumb is do NOT use debit cards for online shopping.

For various reasons, some already stated, I choose NOT to have a debit card. I can do just as well with a credit card and I certainly have enough personal discipline to pay the bill monthly.

FWIW, online shopping with a known and secure web site is probably safer than handing your card to the waiter at the local restaurant.

For lesser known web sites, if you are troubled, you can always get a "one-time" virtual number that is linked to your "normal" credit card account. Even if your account information is stolen....the virtual number is operable for only the first transaction.

FE

[ATSMAN]

Do all credit card have that one time virtual #? I don't think Discover offers that?

[FEDUKE404]

Options from Discover card

Do all credit card have that one time virtual #? I don't think Discover offers that?

From Discover Card web site: https://www.discover.com/credit-card...faqs/soan.html

All kinds of related information is on the web page. Apparently you can now only access this feature by using your online account access.

It appears they may have tweaked the process a bit since I last used it, but the concept remains the same.

(I also have used a Master Card in a similar way. Check with your card provider....I'm SURE such options exist.)

FE

[John of PA]

I disagree with the comment that using your credit card in an arms length transaction is less secure than online. True someone looking over your shoulder, or a dishonets clerk can steal your credit card #. However, organized crime on the other side of the world cannot. But online they can, and do everyday.