Dumbest Credit Card Ad I've Seen

[John of PA]

I like the comment that if one has dicipline, they need not worry about a credit card. I not only agree, but just want to emphases that anyone who has a problem here should get help (or your clients). Help could be in the form of listening to Dave Ramsey on the Radio or his websight, or whatever works. Happy charging to all.

[FEDUKE404]

Attempting to explain

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.

SAFER....I said SAFER.... You know, comparing A to B concept.

If said organized crime on the other side of the world gets my number, I am protected against fraud. Just as I also am if the waiter gets creative with my credit card.

But I repeat my position that, statistically, the chances of Joe at the local sandwich shop skimming my card number are far higher than having that same number, safely within the www.amazon.com computers, creating a problem.

I've performed literally hundreds of online charges using my credit card (and for some lesser known web sites a "one-time" number was used), and I've never experienced a problem. On at least two occasions, the relevant card issuer has notified me of issues they have caught within their processing system, and a card with a new account number arrived forthwith. On the other side of the coin, I have had several issues where a merchant "double-charged" a purchase (or rang up a phantom purchase at the same time), and one family member even encountered an employee at a drug store who was scanning all CC numbers into a hand-held device. But once the dust had settled (and after a few telephone calls), I never faced 1¢ of money removed from my own pocket. (I have NO debit cards... why expose my BANK ACCOUNT funds to risk??) Yeah, I know it can eventually be "fixed"...but why go that route in the first place when there is no underlying need to do so.

I probably would get a similar rise from you if I said mailing a check via USPS to Dr. Jones statistically puts my bank account at higher risk than making an electronic payment, using RTN/DAN, to Dr. Jones. (I think I wrote somewhere around three checks, total, during 2012.)

FE

[John of PA]

Good point, I have on numerous occasion had unauthorized charges on my credit card, and tiny "test" transactions going through (1.00 charges) by some sort of scam artist; and the bank has always taken care of it with little inconvience on my end. You mention double charging by merchants, I did have that happen at a local restaurant that soon thereafter, closed up. We are in an electronic world, not the world our parents grew up in.

[JohnH]

The credit card companies are getting better & better at detecting fraudulent transactions. On a recent trip I used a credit card to pay the $2.50 rent a luggage cart at an airport, then to pay a $10.00 parking fee at another airport later the same day. Then I started to charge an item in the $200 or so range and the charge was rejected (actually they told the merchant to call, but the clerk didn't want to bother). Simultaneously, I got a text message from the credit card issuer's fraud dept. I called them & gave an explanation, and they immediately released the block on the card. I thanked them for their diligence. There's another lesson here - when traveling, it's always a good idea to carry two different credit cards. (I also keep them in different locations, but that's another story.)

[FEDUKE404]

Credit card charges while processing occurs

Good point, I have on numerous occasion had unauthorized charges on my credit card, and tiny "test" transactions going through (1.00 charges) by some sort of scam artist; and the bank has always taken care of it with little inconvience on my end. You mention double charging by merchants, I did have that happen at a local restaurant that soon thereafter, closed up. We are in an electronic world, not the world our parents grew up in.

This happens more than you think, but frequently due to non-nefarious reasons.

If you have online access to your credit cards, and can see "pending transactions," it is not unusual to see such legitimate test charges. One local gas station I use always runs a $1 charge, which will be there for several days until the "real" one processes. Some hotels will run a charge, upfront, for your entire projected stay and then straighten it out later. Last week I made a valid online purchase (national merchant) and the correct charge in the $200 range appeared as three identical pending charges. Once it went from "pending" to "cleared," all was well. Perhaps it's something like you don't want to see sausage being made, or something similar?

JohnH also mentioned some valid points. If you are a traveler, and have charges more or less appearing from two distant locations in a short time span, alerts will go off. I have received both texts and phone calls from the card services fraud units. I appreciate their monitoring! (The charges were all valid.) In a similar scenario, a family member is on the Left Coast and due to reasons not relevant here I allowed her to use my credit card number for an emergency purchase of several hundred dollars. The charge was rejected at the merchant level, I received a call due to the suspicious charge, told them it was fine, the merchant resubmitted the credit card charge, and all ended well within the span of ten minutes or so.

FE

[taxxcpa]

I had some large, unusual charges for my daughter's wedding several years ago. I just confirmed the charges and ended up with a big cash rebate from the credit card for making all those charges.

[JohnH]

We've wandered afar of the original post, but since I'm the instigator of the topic I assume nobody will be offended. Another point about credit cards. If you know in advance that you will be marking an unusual set of charges (such as multiple cities in a short period of time, out of the country, a rapid combination of small charges & large purchases in close succession, etc) it's a good idea to notify the credit card company ahead of time. Some will note it in their files while others will not confirm whether they will or won't. But it can sometimes forestall a rejection at a critical time, such as when you're dashing to catch a flight, trying to exit a parking lot, standing at the counter with your mother-in-law, etc.

[FEDUKE404]

Motive revealed

I had some large, unusual charges for my daughter's wedding several years ago. I just confirmed the charges and ended up with a big cash rebate from the credit card for making all those charges.

DULY NOTED!!

There was an underlying reason I made eight college semester payments using a major credit card.....

(The school no longer accepts credit cards for such payments. )

FE

[taxmandan]

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

Disagree completely. I have a debit card that is ONLY used for on-line purchases. Never has a balance until I'm ready to buy something, then I put enough $ in the account to make the purchase. This also slows down my tendency to impulse buying on-line. The card number was hacked once, for $29 at iTunes store, where I have never used a credit/debit card. Apple refunded the $29 the next day after I disputed it. My personal bank account debit card has never been used on-line or in a restaurant. The merchant accounts of restaurants are the least safe in the country and using a cc or debit to eat is high risk. First Data was hacked just last month through restaurant accounts.

Money management is what this thread is really about. Some people use credit responsibly and some don't, I've used debit cards for 20 years, my credit union was one of the first in the country to offer them and the benefits far outweigh the concerns for me.

[John of PA]

I like that idea of having a separate checking account for DEBIT cards used for online shopping, especially the dicipline advantage.

[FEDUKE404]

Doing the discipline thing

I like that idea of having a separate checking account for DEBIT cards used for online shopping, especially the dicipline advantage.

And I like even better not having to deal with the risks of having a debit card in the first place!

(Exactly what lack of discipline are we dealing with here??? Do you only pay bills with cashier's checks???)

Side issue: Does one's credit history ever get created/enhanced when only a debit card is used? My best guess would be "no," which could lead to some negative issues when seeking a mortgage, car loan, etc. (Even potential new employers will often perform a credit check.) Anyone with knowledge of this issue is welcome to comment!

FE

[taxmandan]

And I like even better not having to deal with the risks of having a debit card in the first place!

(Exactly what lack of discipline are we dealing with here??? Do you only pay bills with cashier's checks???)

Side issue: Does one's credit history ever get created/enhanced when only a debit card is used? My best guess would be "no," which could lead to some negative issues when seeking a mortgage, car loan, etc. (Even potential new employers will often perform a credit check.) Anyone with knowledge of this issue is welcome to comment!

FE

The lack of discipline I was referring to was my weakness for on-line impulsive buying when I see something that sounds/looks interesting before I take the time to realize that I really have no use for the item or it fulfills some trivial convenience. Since I keep no money in my on-line debit account, I have to go to the CU to make a deposit before I can return to the on-line purchase and that buys me time to rethink the real need for said item. The account is not tied to any other account so I can't even transfer money to it on-line!

I've never cared at all what using a cc or debit card does to my credit rating, my numbers are fine due to little use of credit.

I have a cc only because car rental companies require one, almost ruined our last Hawai'i trip when I took only a debit card with me. They froze the entire amount of funds in the account to secure the rental (4 times the cost of the rental car!), fortunately had another account to use for expenses.