Whats the point in credit cards

[crt1530]

No, USAA is not a credit union, but it's not really a bank, either. It doesn't make sense to reference it as a counterexample because membership is restricted. Everyone has access to credit cards and for the vast majority of people, prudent use of credit cards is the best way to make a purchase.

 

[MattCo]

Originally posted by: dullard
Bsmithy, a credit card has every benefit of a debit card, and then some. So there is absolutely no reason to use a debit card if you can use a credit card responsibly. Most people have covered the basics already. 1) CC have better money protections than debit cards. You found a bank that currently has protections similar to a CC. Chances are the bank will change its policies as all banks do. You might not have this protection in the future. 2) CCs have better benefits than debit cards do. Cash back is one thing (I get 2% back on my Discover Card if I'm willing to accept gift certificates instead of cash). Credit cards often give you insurance policies or free extended warranties. Many CCs give you a 3 year warranty on everything you buy - makes a great deal when stores might charge $100 to upgrade to a 3 year warranty. I could go on and on about various beneifts that a CC has and a debit card most likely doesn't have. 3) Building credit is always a plus. There is no such thing as "good enough". Yes you might be able to buy the things you want, but using a CC will probably decrease the price of your loans, and even things like car insurance will be cheaper if you start using a CC. 4) CCs have over history charged the store LESS than debit cards do. A couple years back Walmart sued to be given the right to stop using Visa debit cards but still use Visa credit cards since the debit card charge for the store was so much higher. Saving money for the stores you shop at will allow them to lower prices (slightly) and thus you save money here. 5) If I have $100 in the bank and a $30,000 check coming to me in the mail, I can still buy $30,000 worth of goods today on a CC. Try that with a debit card. You'll just be sitting around waiting to get paid, waiting 1 week for that check to clear, and then you can enjoy the goods that I've enjoyed for the last 2 weeks. 6) Need we go on? The real question is this: can you give us one reason to use a debit card instead of a CC?

Good post! Pretty much sums it up nicely.

The only reason I can think of where a debit card is better is if you cannot control your spending responsibly. You could get in trouble with credit cards if you have little or no self restraint.

-MC

 

[rufruf44]

Originally posted by: dullard

The real question is this: can you give us one reason to use a debit card instead of a CC?

I think you nailed it. The only advantage I can think of is when a person is financially irresponsible, they can't spend what they don't have. For a responsible person like you stated, I don't think there're any benefit whatsoever.

 

[dullard]

Originally posted by: MattCo
The only reason I can think of where a debit card is better is if you cannot control your spending responsibly. You could get in trouble with credit cards if you have little or no self restraint.

Originally posted by: rufruf44
I think you nailed it. The only advantage I can think of is when a person is financially irresponsible, they can't spend what they don't have. For a responsible person like you stated, I don't think there're any benefit whatsoever.

Yes I did bury the being responsible part in my post. If you are responsible, then a debit card has no advantage at all - while a CC will likely have many advantages. If you are not responsible, then avoid a CC like the plague.

 

[Pex]

i use my credit card for lots of things. i dont like to run my savings account down which my debit card is attached to. so i use credit and pay by check later. plus having perfect credit can get your foot in the door for a lot of things.

 

[dafatha00]

1) 1% is better than nothing. I've spent about $80,000 on my Amex Blue card and I have enough points to buy two round trip tickets to anywhere in the U.S. What do you get with your debit card? Nothing.
2) Fraud and liability protection. Sure your debit card offers it as well but many do not. Most credit cards do.
3) Difference between future and present value. I received one card at the beginning of 2001 with 0% APR until the beginning of 2003. I purchased several Dell LCD monitors totalling about $5000 using the card. Taking into account a discount rate of about ohh, 14%, the rate that I've earned from the stock market for those two years, I only paid about $3900 for my LCD monitors.

There are other reasons discussed in the thread but you're probably too stubborn to read them.

 

[EvilPaper]

I saw some talk about the liability/fraud with a debit card --

As long as your debit card has a Visa or MasterCard logo, and the transaction is done through their network (card number & exp entered or swipe & sign) it follows their dispute processes. I don't know MasterCard very well, but Visa has very strict rules. If you dispute a Visa Check Card (Debit card) transaction, the bank has 10 days to issue provisional credit while they complete the dispute. Both Visa and MasterCard now have a Zero Liability policy.

The problem is, if you need to dispute a transaction that is an ATM Point-of-Sale transaction, (PIN # entered at a store) it follows a different dispute process. But, all transactions at a Bank have a dispute process, most covered by federal regulations -- the hardest one is fraud with checks. There is even a dispute process for ACH transactions.

But, anyway, back to my main point -- using your debit card online for transactions through the Visa/MasterCard network is safer than it has ever been.