Question about beliefs CC vs. Debit Cards

**Momma Crystal** · 07-10-2007, 08:40 AM

I get this all the time! People believe that they cannot survive in life without a credit card. I read the same excuses in various places online and I get confronted with these beliefs in person.

You have to have a credit card in order to do the following:
Rent a car
Buy a plane ticket
Rent a hotel room
Purchase things online

We have NO credit cards and we do all of the above regularly with our debit card. So why on earth would anyone say you CAN'T get along without a credit card?

And for those who fear someone getting a hold of their debit card and emptying their account.
1. A debit car with a master card or visa logo provides the SAME EXACT protections against this that master card and visa credit cards have. They are secure and the debt WILL BE paid back!
2. If you are still nervous open a seperate account and keep ONLY enough cash in it to cover whatever expense you are about have on the debit card. SO if you are buying $500 in plane tickets then a couple of days before you buy those tickets put the money in that account! This SERIOUSLY limits what any person can steal from you!

**FreesiaE** · 07-10-2007, 08:44 AM

We actually prefer credit cards to debit cards here, as credit cards provide extra incentives for us (hotel points) with no hitch. We pay it off every month and we use the hotel points are various times. It really works for us.

**Momma Crystal** · 07-10-2007, 09:17 AM

I'm glad it works for you, but I find CC's provide too many downfalls and too many risks for me. Research suggests you spend more when you use plastic (either debit or CC). 12-18% more than if you used cash. I have found I spend WAY less since I gave them up.

Plus I had a few instances where I did pay my bill on time but something happened allow the way that made my payment late... which lead to interest charges, late fees, and a higher interest rate - which didn't matter but was just WRONG! (Snow storms when I paid with a check and snail mail, a computer glich when I paid via online - and LOT's of headaches arguing with customer service people to get the charges dropped)

So for me, if I am going to spend more in general and RISK extra charges then the benefits become a wash. Plus there is the peace of mind of not having another bill coming at me every month. When I buy something, it is DONE, I NEVER have to see that charge again! THAT feels good!

I ONLY use cash when humanely possible. The debit card and checkbook are ALWAYS left at home. The debit card ONLY comes out for those things that REQUIRE the cc like number (ie. renting a car).

**Jaded** · 07-10-2007, 09:23 AM

I met a man once who told me that Enterprise would not take his debit card to rent a car. They had told him on the phone they would, but then when he got there, they wouldn't. He was stuck in a strange town without a car, so maybe all car rental places do not take credit cards. I don't know, because I've never had to. I have rented a motel room with my debit card.

The main problem is that with a debit card, someone can wipe out your bank balance once they have your info. It takes forever to get it straightened out, and get the money back sometimes, and in the meantime, what do you do if you don't have a savings account?

Credit cards are safer in that regard. I have one credit card, for emergency only, and I'm paying it off from my last emergency.

**Jeanna** · 07-10-2007, 09:39 AM

Your debt card has to linked to a cc such as Visa or MC to be used at some places. However it still is just money out of your account. I use my debt card for all online purchases, hotel reservations, and the like. Mine is through my Credit Union but is a Visa. I still pay nothing for the privilage of using the card though. Since I have had a real problem with CC I vowed never to have one again. I have survived about 7 years without one and still a doing fine. It has taught me to not have instant gradification and that is a good thing.

**Momma Crystal** · 07-10-2007, 01:06 PM

Originally Posted by Jaded

I met a man once who told me that Enterprise would not take his debit card to rent a car. They had told him on the phone they would, but then when he got there, they wouldn't. He was stuck in a strange town without a car, so maybe all car rental places do not take credit cards. I don't know, because I've never had to. I have rented a motel room with my debit card.

I've rented from enterprise with my debit card 4 times. It has a Master Card logo. They are the only company I've ever rented from.

The main problem is that with a debit card, someone can wipe out your bank balance once they have your info. It takes forever to get it straightened out, and get the money back sometimes, and in the meantime, what do you do if you don't have a savings account?

I addressed this. If you are so afraid of this then keep an extra account that you only put cash in when you plan to use your debit card. So if you plan to rent a car then a day or two before put the cash into that account. That way, if you do have someone try to drain it they will be sorely dissapointed and you won't have to worry about loosing your mortgage payment.

Credit cards are safer in that regard. I have one credit card, for emergency only, and I'm paying it off from my last emergency.

So now that emergency just cost you even more than if you had savings. And you can't tell me you can't save for emergencies. You're finding the money after the fact to pay off the card why couldn't you find it before? Sorry to be harsh, but I appreciate it when someone is direct with me.

I've discovered that I am more creative when I do have an emergency now that I don't have a CC. I think out of the box to get it paid for so it has as lttle impact on my savings as possible. The CC was an easy out so I just charged it and worried about it later.

**wanderlusting** · 07-10-2007, 01:07 PM

Another thing is a lot of debit cards have a cap at what you can spend per day. So if you make a big purchase (say a new kitchen from a home improvement store) you may not be able to use your debit card because the kitchen is $5k and the cap on your debit card is $2k.

**annymoll** · 07-10-2007, 01:41 PM

We prefer our credit card. It has no credit limit, and we pay it monthly.We pay no interest fees.I pay one bill, and that's it.I prefer this, as we aquire rewards. I don't think you must have a credit card in this world.I know people that do not.I think it is a personal choice.

**Jskell911** · 07-10-2007, 02:15 PM

I work in car rental for a major worldwide company. I can tell you most places will only take a debit card by running your credit check with a credit place like Experian. Everytime this is done 5 points come off your score. So, if you rent often, I would get a CC. Debits are not credit based, this is their reasoning. And they cannot "force" a charge for damage etc on a debit.

If you do not rent often, then check with the company to make sure they accept debits and what their policy is.

**Emerald_Mommy** · 07-10-2007, 02:34 PM

My husband and I have never had a credit card and we get along just fine. And yes, we've rented cars, gotten hotel rooms, etc.

- Ours is a Visa which means it is protected. It is linked to our checking account, not our savings, so if someone did "wipe us out" it would only be our limited amount of money and would be paid back. Plus we have an emergency fund in a completely different bank.

- Our card is also a reward card (offered by Visa through our bank). We get points just like credit cards except we don't spend any extra. We've got enough for several nice dinners out although we haven't redeemed them yet.

- We mainly use cash (a modified envelope system). This keeps me on track with my budget and it is also helpful in teaching our children about money. The "card" is just too abstract of a concept for children.

- We're not really concerned about our credit score. Our goal is for that number to be zero. (Can you tell we're big Dave Ramsey fans?!

) We got a mortgage just fine with manual underwriting. We pay cash for cars. We pay our own health insurance. We don't have second mortgage, a home equity line of credit, etc. And if you think we're making the big bucks - we absolutely are not! I stay home with our girls (we're also homeschooling) and my husband makes $2,000 a month.

If we can do it, anyone can.

**dcompton** · 07-10-2007, 03:56 PM

Well, people are different. I have found that I spend more freely with cash than with a credit card. To me, the numbers on the computer screen are serious business, but cash can feel too much like "free money." I budget a blanket amount monthly for ordinary expenses, which are put on the card, and those expenses are paid off monthly, so I never pay interest. I get great rewards that are valuable to me, and just find that using it is what is simplest and works best for me.

I don't think you can say that everyone overspends just because they use one card rather than another. These are individual decisions, and everyone, I think, just has to find, sometimes through trial and error, what works best to help them manage their money most responsibly and effectively.

**acidcookie** · 07-10-2007, 04:27 PM

I still stand by the idea that the credit cards are safer against theft in that if someone racks up purchases on your debit card you ARE out of money while the situation is fixed. On a credit card you will be carrying a balance until the situation is fixed but you aren't immediately out of money.

Other than that people can do well and do poorly with either, and you are not limited by not having a CC.

**McD** · 07-10-2007, 05:21 PM

Not all hotels or rental car companies take debit cards.

The reason is that when they swipe your card, they preauthorize a chunk of money, to make sure the entirety of your purchase will be covered. Debit cards have set spending limits that are generally lower than most people's credit card limits.

Not all people can't handle credit cards but I've seen plenty of people abuse debit cards as well.

**frugalnana** · 07-11-2007, 03:06 PM

Most people like cc for the incentives that they offer now. But for me I prefer my dc. We have a cc with a small balance left on it and hopefully by summers end it will be paid off and then cut up. We have not had a problem using the DC as a CC in holding reservations, hotels, car rentals, buying products so for us its allot better. I wanted to tell a story about my niece which I think is just wonderful how she handles her money.
When she was 16 she got a job and stayed with it all through high school and she is 20 now and goes to college and still works at this place.
She puts money in her savings and when she borrow money from her savings for either college, clothes to have repairs done on her car etc. She makes herself pay interest on the money she borrows from her own savings account.
If its under 500 she charges herself 8%, if the amount is over that she charges herself 13%. She thinks very carefully before purchasing anything.
I about fell to the floor when she told me that. My dh and I pay her to help us with things that need to be done. Since she is doing this now she will be much better off in the future.

**frugalnana** · 07-11-2007, 03:10 PM

I just read the above comment and wanted to say yes most DC do have a set limit on purchases per day. I don't know if its because we have been with the bank so long or if its what they over to all customers. But our daily cash ATM limit is $500 and our Visa DC is a limit of $3,000 per day. I know that the small checking account I kept for myself only had a $200 atm limit and a $1,000 Visa DC per day. But the limit we have now is plenty enough for what we need.