That was hurtful. It’s like they were blaming YOU for getting robbed.
I haven’t used a credit card in 40 years. I only use a debit card. All my bills are automatically paid. This way works for me because it forces me to stay on budget and make sure I have the funds before I make a large purchase. I’ve only had a couple of issues of replacing cards, and sometimes I have to update my info when I buy online, but that’s it.
I never had a debit card in 30 years of banking. I just never needed one - I have an ATM card (with the MAC logo and everything!) for cash and otherwise use credit cards.
However, using some of the new payment apps require a debit card. You can’t just put your bank account info right into it. I think it was CashApp I needed to get a debit card for, because I had to help my cousin out with some money stuff and it was the only app he could use. So I had to go ahead and get a debit card.
Venmo might also require a debit card, if I’m not mistaken.
Of course, if you’re gunshy about having a debit card in the first place, like the OP (and myself, tbh) then you’re probably not going to be using these payment apps. But like I said, I was in a bind needing to help someone.
I do keep my debit card at home, though. Still don’t use it.
You can give Venmo your bank information and avoid additional fees, and you can use credit cards, but then you’ll pay the extra charges.
Another thing is to be careful using a debit card on an account you make large automatic payments from, like rent to mortgage. If enough money is held up, it’s possible to get overdraft or late fees while you are waiting for the missing money to be refunded. I’ve seen many stories where the money is returned, but the extra fees are not refunded.
And I don’t like credit cards, but debit cards earn interest for me like a bank deposit!
Would that money not be earning interest if it sat in the same bank account until you pay the credit card bill? A debit card doesn’t earn interest, but the money sitting in the associate checking account does. The amount of interest your money earns doesn’t depend on if it’s ultimately used to pay off a credit card bill or a purchase with a debit card.
In fact, I’d think I think there’s more earning potential with a credit card that you pay off once a month rather than a debit card which deducts the money from your checking account as you use it.
Unless you have some weird USA banking stuff going on - no.
Money in accounts earns interest.
OTOH, most credit cards, unless your bank is like unto a loan shark, charge no interest if you pay off your monthly bill completely and on time. (But if you don’t, they your bank does become your loan shark.)
The most efficient thing to do - what I do - is to use a credit card for everything you can, but pay the bill in full each month from my account. This gives me almost 2 months of free credit and interest income. (statement cutoff for my cards is about the 10th. Buy on the 11th, the statement is not generated until next month on the 10th, and I then have until the 30th to pay.)
The bank doesn’t care. They make money on the other end too, charging the merchant 1% to 4% depending on how loan-sharkey they feel toward them.
This is correct. My statement is on the 6th and payment is not due until the end of the month, so I can get as much as 54 days of free credit.
Although it is generally true that a debit card does not earn interest itself, some banks, like Discover, gives you a % back on purchases using that debit card (up to a certain amount per month). In general that percentage is lower than if you used a credit card that gives cash back, but it is nice because payments that require a bank account or debit card can be paid in that way and you get something back.
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I was staying away from points since that’s a whole other thing that’s not really related to interest earned on money in a checking account.
But, yeah, I don’t think a debit card is going to get anywhere near my Amazon card giving me 3% back or my Chase card giving me (up to) 5% back.
I feel like DerrickOlley either has a fundamental misunderstanding about how debit cards work or they didn’t explain it properly. The statement “debit cards earn interest for me like a bank deposit” just doesn’t make sense. It’s either incorrect if taken at face value or, in the most favorable way I can interpret it, contradicts itself.
I agree that it is not interest, but it is, in the case of Discover, dollars that you earn from using your debit card, and it gets deposited right back into your account. It is not points in the sense that you can redeem them for other things (gift cards, merchandise, travel, etc.), you get it back as a deposit. You are correct in pointing out that it is not interest, even if it seems like it since it is a percentage of you what you spend. It still is a cash back debit card and can be more than what you would get in interest, depending on the current rates.
I am also the type to use credit cards and pay off the balance to get the benefits of free credit and points/cashback benefits, so that is my preferred route.
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What do you pay that requires a bank acct/debit card that you can’t pay with a credit card?
Utilities, e.g. water, gas, etc. There are sometimes options to pay using credit cards for those, or some taxes, but at a higher price than using a direct debit from your bank account.
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I bill pay my utilities; I don’t let any variable payments auto-deduct from my account.
About the only check I mail is for taxes…on the 15th (17th this year), about 4:30 in the afternoon. I won’t give those bastoids my money one hour early then I need to, just for spite.
I am not sure what that means. Does it mean, you pay your utilities by check or that you directly pay them when the bill comes due? If the later, then that is what I do as well; however, I can’t do that using a credit card, which is my point. Not all payments can be made using a credit card but can sometimes be done using a debit card instead.
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I utilize my bank’s bill pay system. For fixed payments (loans), I can set it up for a recurring payment. For variable payments (utilities), I setup the payee once & then only need to log in, select the payee & type in the amount I want to pay them. By me pushing it out, it prevents the (rare) case of them sucking way too much from my account, like when your cell phone provider charges you thousands in roaming fees from when you were away somewhere.
A lot of people seem to have a deep mistrust of direct debits. Those who live payday to payday may have a point, although it would seriously save them money if they could budget better.
Way back in ye olden days, I did once have much trouble canceling a DD. Although I told the bank to stop paying, the company kept taking the cash. That does not happen these days, at least not in the UK. I do all my banking online and every month or so I check the list of DDs. Some, like phone/internet, are variable in that they take what they need each month after sending me a detailed invoice (online of course). Others, like gas and electric, are fixed, because I build a credit in the summer to cover the bigger winter bills.
The detail is irrelevant really. What matters is that with the magic of the internet, I can and do micro-manage my finances to ensure that I always get the best value for money. Thirty years ago, when money was really tight, I wish I had the same control as I do now.
That’s what I do too for bills that cannot be paid by credit card. Most are due end of month, so about the 27th I login and pay credit cards, utilities, etc online. The only direct debit is my mortgage (same bank as my accounts) and property taxes. Thatnks to eTransfers also, I probably haven’t written a cheque since Covid started and almost none in the previous few years. In fact, with Apple watch (tap) tied to my credit card, I rarely take out my cards themselves.
My car and house insurance can be paid by credit card. Similarly for cellphones, most services like Netflix. I don’t know if Canadian banks offer “points for debit” or such, but I don’t care if they do, I wouldn’t use them.
I have my utilities set up for automatic payment out of my bank account, but with a maximum. So in the rare case where I have exceptional high usage, only that maximum is automatically withdrawn, the rest I pay manually.