I use my debit card because it’s attached to my checking account at the bank. Possibly I COULD get a credit card that would earn me some cash back…but my credit union doesn’t offer such cards. Instead, they offer absurdly low interest on loans and credit card purchases. I’d have to get a card from another institution. And my points for flights and hotels would expire before I used them. As a general rule, I don’t need to travel. And I hate traveling, it’s not a pleasure for me. So my mileage varies from yours.
I think that using my debit card is my best option in most cases. In some cases, yes, I write checks. There’s a restaurant/deli that I go to which doesn’t accept cards, but will accept checks. Very odd, but they seem to be doing well.
I took all my money out of Bank of America twenty five years ago. They wanted to charge me money to get my money out of their bank. (12 cents, for my 50 dollar withdrawal) I changed my withdrawal to a closure of my account, and was offered a free withdrawal if I remained a customer, which offer I declined.
My current bank gives me free checking, free atm card, they pay back up to 15 dollars of other banks ATM fees, and I can deposit checks from home on my scanner, also for free. Free Bill Pay, transfers on line between accounts (including into other family members accounts in the bank) 24 hours a day. I can arrange payments to individuals directly from the bank as well, although that requires a business day to go through. I have automatic overdraft protection from my savings, and my credit card up to a limit I choose, also free. At the end of the fiscal year, my bank gives me bonus interest proportionate to my banking ballance average over the year based on the profit my bank makes from providing all this service. They have paid it every year I have been a member.
I think anyone who banks with any institution that acts like BOA deserves to be ripped off as often as they are willing to be.
Yes, what Nocturne and Scylla said. Why are you people arguing about overdraft fees? that’s absolutely not the issue at all. Maybe they are slimy, maybe not, it does not matter since that’s got nothing to do with this new increase at all, it’s just a pointless sidetrack.
The issue is the Durbin amendment, which drastically lowers (~80% less) how much the bank can charge for processing a debit card. They are going to make that up by charging the consumer fees for using the card (and probably scrapping rewards programs etc).
I don’t even know what the point of the amendment was supposed to be. Did people expect banks to just happily make less money, while stores happily lowered prices to compensate (hint: they won’t)? It seems the obvious outcome was this, the consumer getting screwed over, while walmart makes that much more profit.
So banks’ profit margins were SO tight that they were FORCED to raise fees somewhere else to compensate: their hands were TIED! Funny how it doesn’t work the other way around. Gotta keep those billion dollar bonuses flowing.
If you’re not interested in points, but just want low interest, you can almost find a card with a 0% introductory rate for a year, and just flip to a new one when one expires.
But I still think getting points is better, because a lot of them can be redeemed for cash. Although, the big ‘bonus points’ are almost always on airline or hotel points - but those can be sold for cash (or traded for other points) on the informal market.
For example, Citi AA did its 75,000 mile bonus at the same time that Cap One did its match my miles. So, you just signed up for AA, waited for the miles to post and then got the Cap One card, getting another 75,000 miles (or up to 100,000 if you already had some AA miles).
That was enough for 2 round trip tickets to South America and a domestic flight, plus another $750 in gift cards with the Cap One miles (Best Buy, Target, whatever). If you didn’t want the AA miles, you could have sold them for almost $1,000.
If you charge more than 10k a year you are probably better off with a rewards based credit card. Besides travel, a lot of card offer you merchandise or gift cards. Some accrue towards the purchase of a car. Most good ones don’t have points that expire. Some just give you 1% cash back.
I spend everything i can including paying some bills on my rewards card. I end up getting about a thousand dollars worth of gift cards every year for my trouble, and that pays for Christmas.
You are paying for this in terms of higher prices at the store. You might as well get something for it.
Forgot to add, points don’t really expire any more. In some cases, like Delta I think, they literally never expire, and in others, as long as your miles account is ‘active’ that is you’ve earned miles within the year, the points don’t expire. To do that is easy - just use one of their malls on mother’s day or similar to order flowers, which always give ridiculous points - usually 40 to 1. And, you still order directly from 1-800 flowers or whatever, so it’s not like there’s any additional cost.
eta: Just to be clear, I’m not trying to rip on people for what they’re doing, I’m just trying to get people to join in on the ‘free shit’ bandwagon. I think it’s fun. And if it wasn’t for a buddy of mine convincing me how easy it was to get stuff, I may be still leaving money on the table. Right now, I’ve got 110,000 BA miles and 174,000 Hilton Points waiting for me, as well around 25-40 K on a few other programs. Free vacations
The bank wants money on deposit so it can lend it out. That’s true. Checking accounts suck in this regard, as a lot of them are mostly just people’s working capital type accounts. They have lots of activity which costs money to administer, but not a big balance.
They do it because they hope you will think of them as your bank and do other more profitable things with them. They might also hope you end up with one of those checking accounts with a 50,000 exces balance above the monthly spend. Those are profitable.
I have an Amazon card through Chase which doesn’t have an annual fee* and offers 1-3% Amazon dollars (or real dollars at the same rate, which I don’t quite understand) that don’t expire.
Honestly, though, I don’t really understand how people are always jetting off to Thailand or wherever with their card points.
Let’s say you make $30,000 a year after taxes. At 1%, even if you spend every single dollar you earn in a calendar year via your card, you’ve still only got $300.
*which most people don’t think about- but at $175 a year the average consumer is at least cutting their rewards in half and more likely losing money.
My guess is that those people (if they’re like me), don’t want the hassle of regularly accounting for and paying down regular credit card bills every month. And, if you’re using the card that frequently, you have to face the temptation to just pay the minimum every month, while you’re actively accruing debt. For many it’s easier and smarter to avoid the possibility of falling into that trap.
Yeah, well some people make and spend more. Other people may travel a lot for business and get reimbursed or they may run a small business or some such and basically use the credit card for all that businesses purchases. So, the guy may only make 30k but in order to do that he may have to charge 200k worth of merchandise and overhead.
Other people take the effort to search out deals that give you double points or bonus points for signing up or switching.
Sorry. I think about how stupid the average person is, and that by definition a large percentage of the population is dumber than that. Experience on this board has taught me not to automatically assume that someone will be intelligent enough to realize that people might make more than 30k.
In fact, one of the most disappointing things I’ve learned from this board is that most people seem to think they occupy a privileged viewpoint and that their circumstances and experience are some sort of prime meridean.
So, assuming that you would know that other people might spend more than 30k a year is not necessarily a good bet.
I don’t charge more than 10K, I believe. I doubt that I charge as much as 5K, I’d have to sit down with my records.
And my husband and I went through quite a few years of paying off his credit cards. We didn’t QUITE go bankrupt, but it was a near thing. He tends to not think of credit card debt as something that he will have pay off soon. He can handle using things like gas cards, and he can carry a general T&E card, if he only uses it for emergencies. So, in this household, we have only a couple of T&E cards, and I watch them both.
And I am CERTAINLY not going to switch cards every year!
I don’t do vacations. That is, I don’t travel to other places to have fun. I hate traveling, and in fact with my IBS I’m pretty much guaranteed to be staying in the bathroom of wherever, I’m not going to be able to go to the beach or to the meetings. This is part of living with IBS. There are plenty of things for me to do and see within a 30 mile radius, if I want to do and see them.
What amazes me, is that everything is automated, all of these transactions amount to one computer talking to another computer and agreeing to credit/debit the monies.
Back in the day, there was no automation, you want cash, you cash a check or make a withdrawal with a live teller at your bank. You are buying something, you use that cash, or write a check, which will be deposited manually by their bank, moved physically to your bank, then processed again at your bank, by a person. You want to deposit your paycheck, bring the check to your bank, talk to a teller, get it deposited, it gets moved to the other bank, etc. They did all this, and gave you interest, or at least didn’t pile charges on other charges***.
Now it’s all direct deposit, ATMs, instant debit transactions, technology is getting cheaper and cheaper, and the banks act like they can’t survive anymore without charging a monthly fee, or playing shenanigans with other fees.
*** Am I wrong about this? Did banks always charge significant fees for Average Joe checking and savings?
Sorry – I meant “Who uses checks for point of sale purchases when debit cards are an option.” Keeping a checkbook at home to mail out is one thing; carrying it around and whipping it out daily to buy stuff is another.
Megabee aside, I think most people would rather pay $5 a month than go through the hassle of writing out checks several times a week – plus having to carry more cash all the time since most places don’t take checks. I live in the suburbs and do the household grocery shopping, and I can’t remember the last time I saw someone pay by check.
