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MarilynW
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| Posted: Dec 09 2008 at 6:17pm | IP Logged
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We only have one and use it wisely and sparingly - but I am wondering about getting rid of it and switching to a debit card (as recommended by Dave Ramsey) - I worry though as I feel a debit card has more inherent risk with theft or error. I really need a card as I do most of my shopping online, through buyers clubs etc.
I would be interested in knowing if anyone survives without a cc.
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Marilyn
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guitarnan
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I think you need a backup credit card. Here is why. I am a travel writer and have seen several instances where people paid for trips with cash or checks, only to have their airline, travel agent, etc. go out of business. Under the Fair Credit Billing Act, you can dispute any charge to your account that results in services not provided. Cash customers have no such recourse. They lose their money.
This isn't just true for travel, it is true for any transaction. Believe me, I'm not advocating going all credit card, but for large purchases (especially for services!) you really do have more protection in the U.S. if you use a credit card.
I tend to pay off big travel charges instantly (or even before they hit) - remember that I am a travel writer and have to rent cars and go places to earn a living - so that I am protected but don't add big bucks to my outstanding balance.
One other thought - right now many banks are cutting credit limits. If you shut down an existing card entirely, even if you have great credit, you might not be able to get a new card right now should you need it for a family emergency.
I realize this information is so not sensible. In fact, it defies logic. The American banking system spend decades rewarding people who kept credit cards and paid minimum payments, and now the banks are yanking the rug out from under consumers with zero warning. It's wrong. Your only recourse, though, is to protect yourself. Build up a good (Dave Ramsey-size) savings account for emergencies, but keep a credit card for purchases you want to protect.
Disclaimer - I'm not a financial planner - in fact, I have made quite a few mistakes with our own finances over the years - but I know that the Fair Credit Billing Act protects people who pay with credit cards, and that people who pay with cash or debit cards are at risk. I think we need to get politically active and ask the new administration to give equal protection to consumers who pay with cash.
Sorry for the rant, but I'm very frustrated by banks (not naming names, but they are involved in a Chicago sit-in) that accept federal help, then stick it to their customers, both corporate and consumer.
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Nancy in MD. Mom of ds (24) & dd (18); 31-year Navy wife, move coordinator and keeper of home fires. Writer and dance mom.
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Paula in MN
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My concern with a debit card is it comes out of your account immediately. If there are fraudulent charges you won't know right away. With most credit cards you aren't liable for those fraudulent charges, so how does it work with debit cards?
We use one credit card, but we use it for everything all month long, and then pay the bill at the end of the month. Our money stays in the bank earning interest that much longer -- not that the interest is that much, but it's something.
Interesting idea - can't wait to see responses!
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 Paula
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cheesehead mom
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I believe (check with your bank) that most debit cards are now protected against fraudulent charges. I verified this with my last bank before using my debit card online. We pretty much exculsively use our debit now.
Laura in WI
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MarilynW
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| Posted: Dec 09 2008 at 6:47pm | IP Logged
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Nancy and Paula - you have both mentioned the exact concerns I have.
My husband has the same concerns.
I am just trying to balance our budget for next year and considering all my options. (hey - at least I do not have the federal budget!!!)
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Marilyn
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PDyer
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Paula in MN wrote:
| We use one credit card, but we use it for everything all month long, and then pay the bill at the end of the month. Our money stays in the bank earning interest that much longer -- not that the interest is that much, but it's something. |
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Paula describes our approach as well. Our credit card also offers rewards which we cash in to use for Christmas gifts and for Amazon.com certificates when it's time to buy books. 
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LisaR
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we've lived 16 years of marriage without a credit card. however, through our bank account, (which we DO carry debit cards) we were issued one Credit card which we have kept tucked away should a major emergency of some sort erupt.
We've looked into the free rewards type things over and over again, but it jsut does not seem to pay off for my personality especially. I'd jsut get too excited over the prospect of a future "reward!" 
For gas, we literally are 1-6 mi from everything, and dh gets reimbursed for many car expenses through work.
the gas credit card would take a long time.
PS our debit is protected/can be used the same as credit.
in fact, now without penalty, we COULD technically "overdraw" on the debit and it would jsut switch over to actign as a credit...
which is now making me wonder why we needed to be issued that other, bank, credit card.
hmmm
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CatholicMommy
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Most debit cards "are" Visas or Mastercards - such that you are protected against fraud (I learned this one when I dropped my card at a gas station - someone charged $400 worth of stuff to it before I realized it was gone (within 24 hours) - and I got every penny back). There was another instance, when I went on a cruise with a family I nannied for - a cleaning person took the card from my room, charged $700 worth of alcohol to it (this was over New Year's too, by the way) and returned the card. I noticed it was at a different angle (and turned around (pre-children I used to be SO particular about things were set up in my purse - all cards turned the same way!)) - anyway, I called my bank that day and got it all straightened out....
Short story: debit cards CAN protect you against fraud.
Now, with that said, when I get a rental car, they'll let me do debit cards now, but my credit card (through Northwest Airlines actually) gives me free insurance better than the insurance I'd pay for through the rental car company - and I purposely have this one card to build up frequent flyer miles....
I would suggest having ONE card. If you never use it, fine, but you've got it - and it's on your credit report as a positive - and if you have a card with some sort of benefits, all the better. Tuck it away somewhere and don't use it, but DO keep it (noting what was said above about banks right now - I just had my credit limit CUT because I was actually using it (had it for 3 years, never made a late payment, always paid in full - but rarely used it anyway - now I have a full time job (was a full time student) and I'm NOT paying childcare for my son anymore (YAY!!!) - and I rented two cars on it in the same month and didn't pay in full (paid almost all of it) and suddenly they cut my limit.... I don't quite get it).
Right now, it is Paula's idea that I am using too (since I can build up those points!).
HTH.
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mellyrose
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While most debit cards ARE protected against fraudulent charges, if the one you're using is attached to your main checking account, it can be a pain if you're a victim of fraud.
When I was in the hospital with Lydia, someone lifted DH's debit card number (not the card, just the number) and ran up gas charges all over town to the tune of more than $700. When I'm home, I usually check our account online regularly, but didn't bc I was in the hospital. Our account was beyond empty before we realized what happened. DH was denied while trying to buy groceries.
We didn't lose anything in the end, but it was a tough few days.
I would keep one credit card for emergencies / ease of use / protection. As long as you pay it off regularly, they can be an important financial tool.
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CatholicMommy
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| Posted: Dec 09 2008 at 7:26pm | IP Logged
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Oh yes, I forgot about the online thing - I am online just about every day and just automatically check balances (after my particular cases, I don't take chances!). I also learned that the bank associated with my debit card (a credit union actually) is really great about fraud cases - in that, if I try to charge something and it comes back saying bad balance or something, I can call them right then and there and find out what is going on - they will allow that transaction to go through until I get to a place I can see what is going on. (I checked into this, obviously!).
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nissag
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Yep. We have for several years now - it's fabulous. We have debit cards, which have been great.
Blessings,
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RamFam
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One thing I was told once was to have a separate checking account with a debit/credit card exclusively for online shopping.
Just a thought?
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Tami
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We haven't used a credit card in at least 10 years. It's really very freeing. 
Only one time did someone lift our # after a purchase (we could tell which store the person worked in from the timeline of last use to the phone call from the bank). The bank denied the purchase (it was out of the norm for our history, and the person had no secondary ID) and cancelled the card. The bank called dh to tell him (my card was still fine) and told him a new card was on the way! The bank had taken care of it all, and we never even knew it had happened!
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Dawnie
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I think our credit card is still technically active, but we haven't used it in over a year, I think. I don't know if we'll bother with keeping it active once the expiration date comes.
I see the wisdom in keeping a credit card to protect yourself when traveling...we just don't travel that much and using a credit card regularly (for us) resulted in more problems than benefits. I use our debit card for online purchases & have never had a problem. I don't buy that much online, though. I try to limit our homeschool purchases to once or twice a year.
This is the first year since we've been married (which is 10 years!) that we haven't carried a balance on our credit card. Every year before, we've had to use part or all of our tax return to pay off a credit card balance.  Not this year!!!  It is a fantastic feeling knowing that we are going to get to keep ALL of our tax return!
If you're nervous about giving up the credit card completely, why not just take it out of your wallet for awhile and put it in your safe at home, or maybe even a safe deposit box at the bank. You will still be able to get to it if you really *need* it, but you won't have the temptation of constant, easy access. Once we established an emergency fund of $1000, I didn't feel like it was necessary to carry a credit card with me anymore, because I knew that I could get the cash to pay for an emergency (like a car repair, a tow truck, whatever) if I needed it. "Needing" to go through the drive-thru at McDonald's and not having cash is not an emergency! (Stuff like that is what I *used* to use our credit card for  ) We've just had to discipline ourselves to make sure we have the checkbook or cash *before* we go out shopping, or to buy gas or whatever.
So, having lived w/o a credit card for a little while, I can tell you that I haven't really missed it.
Dawn &n bsp;
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Milehimama
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We haven't had a credit card for over 10 years. We do have debit cards, which carry the same fraud protection as credit cards because they have a Visa logo.
You can get prepaid debit cards. Banks and Walmart (I think) waive the fee if it's loaded up for a certain amount or by direct deposit.
I actually usually use PayPal online, not my debit card.
Our card # was stolen once, at a gas station (someone copied the number - they didn't have the actual card). We had to file a police report but got all of our money back. The bank put a hold on the card and immediately credited our account as soon as the police report was filed.
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Red Cardigan
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Here's the one problem we had with a debit card: purchase rung at big box store (big purchase--flooring); we realized purchase hadn't included substantial discount, so we had clerk do a return and then charge it again at the sale price--at which point the bank froze our checking account. (Suspicious activity, from their POV.)
On a Saturday morning. With a week's worth of groceries yet to buy. Couldn't straighten it out until Monday.
Ever since, we've used a credit card for major/online purchases. We only have one, and we try to keep the balance as low as possible (zero is the goal, but we often don't quite get there).
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teachingmom
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Why in the world would credit cards be bad if you pay them off in full every month as we have always done? They are a huge convenience, have no fees attached, and ours give fairly generous rewards.
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LucyP
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We don't have credit cards. There were problems in the past concerning them, and I won't have them in the house. They come in, I go out. We don't book flights or holidays or buy stuff where we need the cover, so it all works out fine for us.
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missionfamily
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We have debit cards but not credit around here. We haven't used a credit card in years. We had one while living out of the country in case of a major emergency, but never used it. Now, we use our debit cards and have a home equity line of credit with checks in case there is ever a major repair or issue we can't pay cash for immediately. The credit line has an extremely low interest rate and no other associated charges.
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CrunchyMom
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teachingmom wrote:
| Why in the world would credit cards be bad if you pay them off in full every month as we have always done? They are a huge convenience, have no fees attached, and ours give fairly generous rewards. |
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There are studies that have shown that statistically people spend a lot more (I want to say 10-20%, can't remember) using a credit card than they do using cash.
We switched to cash only and found it to be true for us. we've since slacked and started using the card for more, but apparently credit cards can create a different mentality even when used in the responsible way you describe.
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4Real Forums : Tea and Conversation
Topic: Does anyone live without a credit card?
