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Location: 23.7 million to 162 million miles North of Venus
23,837 posts, read 12,670,098 times
Reputation: 10558
Quote:
Originally Posted by revelated
Deeper than that.
Suppose you pay utility bills today on a credit card. Something happens - you become disabled, lose your job, etc. You now have a debt to pay.
Oh please.
Going by what you posted in that quote .. in what way do you think that an unpaid utility bill differs from an unpaid credit card that has the utility bill payment charged to it?
A utility bill is for a service that was provided, not for a service that will be provided. An unpaid utility bill is a debt the same as an unpaid credit card that the utility bill was charged to.
If a person becomes disabled, loses their job, etc., and cannot pay the utility bill charge that was made to the credit card, as you posted, then it stands to reason that they wouldn't be able to pay the utility bill by using a check/debit card from their bank account either. If they could pay off the utility bill by check/debit card then they certainly could pay off the credit card that has the utility bill charged to it.
I like to pay whatever bills I can by using my rewards credit cards. The money for the bills is already there, earmarked to pay off the cards the same as it would be to pay off the bills if I didn't charge them to my cards.
And this is the reason people have trouble with finances. Let me step you through this.
Quote:
Originally Posted by berdee
A utility bill is for a service that was provided, not for a service that will be provided. An unpaid utility bill is a debt the same as an unpaid credit card that the utility bill was charged to.
Do you know what the difference is?
A credit card charge is a debt the moment you charge it. Interest accrues immediately. This is because you're using the bank's money. As we now know, the bank can do whatever they want to your card so long as they tell you about it - and they don't even have to make it prominent. If they want to bury a one-sentence statement that says, "Oh by the way, we're going to shut your card down in 2 weeks", they can. If they want to change your rate they can. If they want to drop your limit they can. It's in flux - and you still owe the money no matter what they do. A bank can require immediate repayment. Your credit will be impacted if you don't make a payment for at least 30 days.
A utility bill becomes a debt once it goes unpaid a certain amount of time past its due date. While they can raise their monthly rate, that's about all they can do. Beyond that you are in total control of the expense and how it's applied to you by way of the services you have and use. They don't send you to collections until you've gone a fair way out without paying - usually a few months
I'm not saying you can't pay with a credit card - simply that it's foolish compared to a debit card that has the same types of benefits and rewards. 10 years ago it would have been quite wise - credit limits were abnormally large, the banks were minimal on fees, rewards were plenty, and they weren't arbitrarily closing cards. In this economy, the banks have people by the gonads, and they're not letting go. It's foolish to use them for hardly anything these days. Use your own money to pay what you owe on things instead of "floating" cash on your credit cards. That theory worked years ago. It's dangerous now, regardless of whether you're studious about paying off monthly.
it's foolish compared to a debit card that has the same types of benefits and rewards.
Are debit cards as secure as credit cards?
"The features that make debit cards convenient - instant access to your money, lack of a required PIN number and not having to drag out your photo ID when you use it - make fraud that much easier. Unless reported quickly, theft of your debit card can quickly devastate your bank account."
"Credit card companies are held to strict liability laws; the law limits consumer liability for credit card fraud to $50. For example, if you notice suspicious charges on your credit card statement such as double billing or an incorrect charge, the credit card company is obligated to investigate if you send in a written request within 60 days.
For debit card fraud, your liability is $50 if you notify the bank within two days of noticing the fraudulent charges. After two days, your liability increases to $500, and up to your entire account balance after 60 days."
How are debit cards on purchase insurance?
"credit cards offer more consumer protection on purchases made. Use credit cards for very large or fragile purchases and for objects that will be delivered to your home after the purchase. This gives you added insurance in case the purchase is damaged in route."
"Say you bought a laptop that was damaged in shipping. Call your credit-card company to complain (if you can't solve the problem over the phone, you may have to resort to filing a formal dispute with your card issuer, in writing, within 60 days). You won't owe anything while the issuer resolves the complaint. If, however, you used your debit card to pay for the laptop and you want to return it, the law doesn't protect you "
Is book keeping any easier with debit cards?
"One pitfall for many debit card consumers is not keeping up with their debit transactions. This is like writing checks and not recording your purchases - you may end up trying to spend money that you don't have! Discipline yourself to keep up with your transaction receipts."
How are the rewards of debit cards compared to credit cards?
"Debit-card issuers are starting to offer their own perks, but credit-card companies generally have the best deals. "
Quote:
Originally Posted by revelated
A credit card charge is a debt the moment you charge it. Interest accrues immediately. This is because you're using the bank's money.
Am I paying interest the second I make a credit card purchase?
"If you pay your bill in full every month, you can purchase now and pay later with no interest charge."
Part of debit’s rise can be attributed to the overall tightening of credit. Part of it could also be consumers trying to use debit to manage their budgets more efficiently.
One of the advantages of using a debit card is that it’s virtually impossible to rack up debt–although you have to be careful: Banks are notorious for socking consumers with overdraft fees. Conversely, as once-juicy credit-card rewards programs ramp down, the incentives to use credit cards have as well.
What about protection in cases of fraud? Although federal law mandates stronger protections for credit cards, in practice, most issuers treat both the same in cases of fraud, says James Van Dyke, president and founder of Javelin Strategy and Research. If lost or stolen debit cards are reported within 48 hours, cardholders are not responsible for more than $50 of fraudulent use. If reported two to 60 days afterward, cardholders could be held accountable for up to $500 of fraudulent charges. After 60 days, though, consumers face unlimited loss.
Credit card companies are notorious for making you go through hoops to get back money lost via fraud or theft. With a bank it's a matter of walking into the branch and letting them know what happened - no letters, nothing. Additionally, most banks have auto-detection of fraud patterns to avert fraudulent charges before they get out of hand, complete with a call to you to ask you about certain charges before even you are aware they applied against you.
As for the whole 50/500 dollar deal, that's a customer responsibility issue, IMO. If you know you got defrauded and wait 90 days to report it you deserve to be liable.
Look, the fact remains: If you're budget conscious, you will not be floating money on credit cards. You will use them only when absolutely necessary. When the economy gets better and they stop ripping customers off, then I can maybe see supporting it, but as long as they practice cutthroat practices, no. Use a debit card, manage your spending. Tell your bank you don't want overdraft protection, you get the same net effect without floating money you may or may not have in the future.
I use my Amex for everything possible to get cash back. Pay in full every month and have never had any issues. I'm up a few thousand dollars because of this. How is this bad again? If I used my debit card all these years I wouldn't have that few extra thousand over the years.
I use my Amex for everything possible to get cash back. Pay in full every month and have never had any issues. I'm up a few thousand dollars because of this. How is this bad again? If I used my debit card all these years I wouldn't have that few extra thousand over the years.
I know this is a dmb question but from the money you get back from Amex that can't be transferred to my bank account right? Kind of like when I receive a payment on paypal and transfer it to my account?
I know this is a dmb question but from the money you get back from Amex that can't be transferred to my bank account right? Kind of like when I receive a payment on paypal and transfer it to my account?
Depends on the account. For Discover you can use it to pay future balances, they used to send you a check (maybe they still do it that way if you ask). For Costco Amex they send you a coupon to use at Costco (for your next purchase). Others vary, but I believe you can get a check for the amount on a straight rewards card.
Location: 23.7 million to 162 million miles North of Venus
23,837 posts, read 12,670,098 times
Reputation: 10558
Off Topic
Quote:
Originally Posted by revelated
And this is the reason people have trouble with finances. Let me step you through this.
Too funny.
I've read through your steps below
Quote:
Do you know what the difference is?
From your steps, it's obvious that you do not.
Quote:
Interest accrues immediately.
Uh, no not on my cards. when I make a $50 charge on a credit card and pay it after the statement cuts ... I pay $50 and not $50 + interest.
Quote:
This is because you're using the bank's money. As we now know, the bank can do whatever they want to your card so long as they tell you about it - and they don't even have to make it prominent. If they want to bury a one-sentence statement that says, "Oh by the way, we're going to shut your card down in 2 weeks", they can. If they want to change your rate they can. If they want to drop your limit they can. It's in flux - and you still owe the money no matter what they do.
On what planet, for a credit card that is in good standing and not in default and charged off?
Quote:
Your credit will be impacted if you don't make a payment for at least 30 days.
Well, duh. It's ironic that you can make that statement but fail to mention if a person overdraws their bank account and fails to pay it then their credit will be impacted as well.
Quote:
A utility bill becomes a debt once it goes unpaid a certain amount of time past its due date. While they can raise theirmonthly rate, that's about all they can do.
A utility company, such as gas and electric, etc., cannot arbitrarily raise their rates, they would have to go to the Corp Commission to ask for the ability to raise rates .. across the board, not just for a single person who is having problems paying. They can however require a deposit which in some cases could be extremely high.
Quote:
Beyond that you are in total control of the expense and how it's applied to you by way of the services you have and use. They don't send you to collections until you've gone a fair way out without paying - usually a few months
Which is similar to what a bank would do on a defaulted credit card account, and, on an overdrawn defaulted debit card account.
Quote:
I'm not saying you can't pay with a credit card - simply that it's foolish compared to a debit card that has the same types of benefits and rewards. 10 years ago it would have been quite wise - credit limits were abnormally large, the banks were minimal on fees, rewards were plenty, and they weren't arbitrarily closing cards. In this economy, the banks have people by the gonads, and they're not letting go. It's foolish to use them for hardly anything these days. Use your own money to pay what you owe on things instead of "floating" cash on your credit cards. That theory worked years ago. It's dangerous now, regardless of whether you're studious about paying off monthly.
It all boils down to whether a person knows how to handle their finances or not. In general there is far more danger attached to using a debit card than a credit card and I agree with what Charles posted. I've gone in depth on that subject a few months back on here but I'm not going to search for what I'd posted. If you feel the need to do it then be my guest. But keep in mind, the topic of this post is about using rewards credit cards to pay their bills and not the pitfalls of using debit cards.
If you can pick and choose to point out what you want in the article, that you'd later posted, well then so can I ...
Quote:
...using a debit card.... you have to be careful: Banks are notorious for socking consumers with overdraft fees.
Yeah, to the tune of almost $37 billion in 2008. Debit card fees have been a cash cow to banks.
Now, back to the topic of this thread ...
As I'd stated previously, I do use my rewards cards to pay the bills and enjoy receiving the rewards checks. As long as the money that is earmarked to pay the bills isn't looked at as found money, money to go play with, used for things other then what it was earmarked for, etc., then a person should have no problems paying off the bills that were charged to the credit card, in full, each and every month.
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