Why do people use debit cards?

[bananaFish]

Originally posted by: AnyMal

Originally posted by: kami333
Cause I get 1.5% cash back

I use my PayPal debit card for that 1.5% automatic cashback on all purchases.

Plus 1.09% interest if you take advantage of their money market account.

 

[mrlayance]

I was thinking of using my dept card less.

I might try it for a month and see what happens.

 

[SarcasticDwarf]

I have a CC, but all charges take like a week to show online, and I can't stand that.

 

[CFster]

After digging myself out of a hole from using credit cards, it's nothing but debit cards for me.

I have $1500 overdraft protection on my debit card, so I can't get into too much trouble. If I need to purchase something more expensive than that and I don't have the cash to do it, then I CAN'T AFFORD IT. Gotta love the American way - buy now pay later. Well, I learned my lesson.

I still have a credit card or two, but I keep them in a safe place for emergencies. They have zero balances. And I keep a low credit limit on them - mortgage companies and other lenders look at "potential debt".

 

[Siddhartha]

Originally posted by: Chumpman
With credit cards if you play the margin correctly you don't have to pay for something for 60 days, the whole while incurring interest on the money. Do you people really not have that much self control?

I use the debit card the same as out of pocket cash. I only use credit cards for emergencies.

 

[TDSLB]

Originally posted by: UglyCassanova
...Haven't read up on them though to see what the advantages/disadvantages are.

I'm a collections agent for citicards. Trust me, there's not many.

I carry cash on me but I make sure it's no more then 20 bucks. other then that I use my debit card. I just find it easier then having to carry checks or watch your credit limit.

 

[mugs]

Originally posted by: PipBoy

Originally posted by: mugsywwiii

Originally posted by: PipBoy

Originally posted by: mugsywwiii

Originally posted by: Aboroth
With credit cards, you can build a credit history which can be important for many things. Debit cards can't do that.

Someone recently suggested that there ought to be a credit FAQ out there somewhere... I second that idea. I've heard all sorts of different information about credit, and I really don't know what is right and what is wrong. I read one place that it's bad to use your credit card for everyday purchases then pay it off at the end of the month, because it still looks like you're carrying a balance (because you almost always have a balance on the card). Then I've also heard that it's good to use it and pay it off. I've also heard that it's good to use it and NOT pay it off completely, because that makes you look profitable to credit card companies. I'd just love it if someone who could speak with some authority (not hearsay) would put it all in black and white.

I use my Discover for everyday purchases, have a Visa for places that don't take the big D, and pay them both off every month. My credit score is almost 800. I charge about $25k per year. It isn't that complicated.

Yeah, it's that simple... there aren't any other factors involved at all...

Lesson in logic:
If A then B
B is true
A is not necessarily true.

I didn't want people to post their personal experience, I want someone who can post with some authority about how credit scores are computed.

Do your own fvcking research then.

Wow, take the stick out of your ass why don't you? Did you miss the part where I said I've heard conflicting information from different sources? Did you miss the part where I said I was merely agreeing with something someone else said about how there should be a credit FAQ somewhere out there?

 

[Chaotic42]

I use it because I sleep when the banks are open. I can't just go get cash whenever I want, so I use my debit card.

 

[FrustratedUser]

Originally posted by: Chumpman
With credit cards if you play the margin correctly you don't have to pay for something for 60 days, the whole while incurring interest on the money. Do you people really not have that much self control?

Not everyone have a CC, so a debit cards is a good option.
I used mine to pay for everything but now I got a CC so I am using that instead.

 

[Rudee]

Originally posted by: FFMCobalt
You don't have to have a credit approval for a debit card.

Chumpman, try asking the question the other way around

What's with people who use Credit Cards? Do they not have the self control to wait until they have the money to buy something because they just GOTTA HAVE IT?

Agreed.

 

[dullard]

Originally posted by: FallenHero
visa and mastercard get a cut of the purchase itself. American Express charges more of a % than the others, which is why its not so widly accepted, but they have some of the best benifits. Now Visa and Mastercard have charged the same for both credit and debit cards. However, a debit card is basically like a check, so the businesses are losing TONS of money because Visa and Mastercard may take 3% off the top. That can add up very quickly. From what I can recall of the letter, if the business has an option of entering your pin (such as best buy), they dont get such a big cut. What Visa and Mastercard did was not distinguish between debit cards and credit cards, so the business had no idea that they were a debit card, even though they might have rejected the use of it. They were being charged the same % off the top for both, when the debit card should have been MUCH lower (cut in half or more). Ill have to read more into it, but thats a brief summery.

You almost got it right but you are 100% backwards in the conclusion. The debit cards cost the business about double what credit cards cost them. Walmart sued to stop the debit card fees - they like the lower credit card fees.

 

[dullard]

If you use it properly a credit card is almost always far better than a debit card. For that reason I don't have a debit card and use my credit cards exclusively for transations. However if you cannot use it properly I see the reason for debit cards.

Benefits of a credit card:
1) Generally you can charge a lot more even if you don't have it in the bank yet. One just one CC I can charge what I make in 18 months. With a debit card you can only buy up to what you have in the bank - plus maybe a little more if you pay for overdraft protection. Thus I can buy anything anytime and never have to wonder if I'm overdrawing an account since I simply cannot charge that much. Note: this is a drawback if you don't use it properly though.
2) Generally a CC gives you cash back where debit cards almost never do.
3) A CC gives you up to 60 days to come up with the payment - a good buffer for when there are unexpected needs.
4) A CC builds your credit history meaning car loans, house loans, and insurance all are far cheaper for good CC users.
5) A CC is more widely accepted.
6) A CC is protected - with loss or theft I'll never have to pay a penny. Most debit cards are allowed to charge you $50 for a stolen card (note they don't always do it).
7) A CC costs the buisness you use less than a debit card - thus in the long run prices are lower.
8) You earn interest on the money since you don't have to pay it off right away. Sure it is small at the moment since interest rates are small. Example: I spend ~$20,000 a year on my credit cards. I get to keep this an average of 1 month longer in the bank. 1 month * $20,000 * my 2.5% interest in the bank account = $42 a year free. I used to make $120 a year from this effect alone when interest rates were higher. $40-$120 is a great boon to a poor student.

Benefits of a debit card:
1) Harder to get into trouble if you cannot control yourself.
2) Nothing else.

 

[isaacmacdonald]

ehh. you get cash back with some debit cards as well (1.5% with paypal), and you don't have to write a check to pay the bill. If there were an easier way to deal with the bills (ie: clicking) I would use a cc instead. For now I'll stick with paypal moneymarket/debit card (which, like all banks is offering a measily 1.25% interest for moneymarket).

 

[dullard]

Originally posted by: isaacmacdonald
ehh. you get cash back with some debit cards as well (1.5% with paypal), and you don't have to write a check to pay the bill. If there were an easier way to deal with the bills (ie: clicking) I would use a cc instead. For now I'll stick with paypal moneymarket/debit card (which, like all banks is offering a measily 1.25% interest for moneymarket).

Like I said, this is rare. Plus you get 2% back from many places like Discover and others. There is never a need to write a check to pay a CC bill. It is called online billing. Many places will even set it up to withdraw automatically from your bank just before it is due.

And some local banks got stuck in 2.5% interest checking and now are regretting it (like mine). So don't think all banks only offer 1.25% interest.

 

[mugs]

Originally posted by: dullard
If you use it properly a credit card is almost always far better than a debit card. For that reason I don't have a debit card and use my credit cards exclusively for transations. However if you cannot use it properly I see the reason for debit cards.

Benefits of a credit card:
1) Generally you can charge a lot more even if you don't have it in the bank yet. One just one CC I can charge what I make in 18 months. With a debit card you can only buy up to what you have in the bank - plus maybe a little more if you pay for overdraft protection. Thus I can buy anything anytime and never have to wonder if I'm overdrawing an account since I simply cannot charge that much. Note: this is a drawback if you don't use it properly though.

eh... I don't think it's good to spend more money than I have... except in an emergency I guess, but the debit card people aren't saying they don't HAVE a credit card, just that they don't use it for everyday purchases.

3) A CC gives you up to 60 days to come up with the payment - a good buffer for when there are unexpected needs.

See above

5) A CC is more widely accepted.

Not if your debit card has a Visa/Mastercard logo. Most do I think...

6) A CC is protected - with loss or theft I'll never have to pay a penny. Most debit cards are allowed to charge you $50 for a stolen card (note they don't always do it).

I thought it was $50 for credit cards too... I saw one advertised a while back where you didn't have to pay anything, but it had an annual fee. Regardless, this is only a valid point if you don't have a debit card at all - because if you lose one, you'll probably lose the other with it. Even if I didn't use my debit card for purchases, I'd still want to be able to use an ATM to make deposits and withdrawals.

7) A CC costs the buisness you use less than a debit card - thus in the long run prices are lower.

Isn't it the other way around?

8) You earn interest on the money since you don't have to pay it off right away. Sure it is small at the moment since interest rates are small. Example: I spend ~$20,000 a year on my credit cards. I get to keep this an average of 1 month longer in the bank. 1 month * $20,000 * my 2.5% interest in the bank account = $42 a year free. I used to make $120 a year from this effect alone when interest rates were higher. $40-$120 is a great boon to a poor student.

How many poor students do you know that spend $20,000 a year on their card? If they did, they probably aren't very poor... Based on your interest rate (which sounds a little high for a regular checking/bank account), you're still only making .2% on your total purchases, which amounts to a whopping 20 cents for every hundred dollars spent. $300 will get you a brand new Krispy Kreme donut. But if you put that donut on your credit card...

Benefits of a debit card:
1) Harder to get into trouble if you cannot control yourself.
2) Nothing else.

Cash back. Personally I prefer to use cash if possible... it tends to piss off the people behind me less. You're right though, a credit card is slightly better than a debit card. I just prefer to always know exactly how much money I have.